• “You hear talk about the tri-state area becoming the nation’s new energy capital,” says Kathryn Z. Klaber, president of the Marcellus Shale Coalition and a Beaver County native. “Ours is the region that developed the first oil well, the first commercial gas well. Maybe it’s high time we reclaimed our title.”

Why Pittsburgh is poised to become the nation’s energy capital
by Evan Pattak // Summer 2012

When the reserves of Marcellus Shale gas in the tri-state area proved vast—84 trillion cubic feet by one estimate—it was no surprise when the region became the epicenter of a thriving new industry. What may have been unexpected was the extent to which the Marcellus boom would invigorate the economy generally.

The availability of cheap, local natural gas will be a particular boon for the region’s chemical manufacturers, which use the “wet gas” of the Marcellus formation as a feedstock, a benefit that could make that sector competitive and growing once more.

At the same time, Marcellus discoveries persuaded Shell Chemical LP to announce plans for a roughly $3 billion ethane cracker facility near Monaca, Beaver County, a complex that will make waves throughout the region. How significant is the location of an ethane cracker here? When you consider that the petrochemical industry hasn’t built such a plant in more than a decade, and that nearly all of America’s existing ethane crackers are in Texas or Louisiana, it’s a vital development, indeed.

The cracker is not a done deal. Though Shell has optioned the land, it has not yet committed to construction. At full development, though, the regional economic impact of the cracker could be staggering. The American Chemistry Council projects that a plant that size could create more than 17,000 direct and spinoff jobs and new annual payroll exceeding $1.2 billion.

What follows is a look at three aspects of this emerging energy story: profiles of four executives who were among the leading evangelists of the natural gas movement, the impact of the Shell cracker on the local natural gas industry, and the impact of Marcellus gas on the region’s chemical manufacturing sector.

The interrelatedness of these developments and their promise of business start-ups and relocations here, as well as expanding supply chains, employment and tax revenue, suggest that we are on the verge of a (dare we say it?) renaissance, this time with energy as the catalyst.

“You hear talk about the tri-state area becoming the nation’s new energy capital,” says Kathryn Z. Klaber, president of the Marcellus Shale Coalition and a Beaver County native. “Ours is the region that developed the first oil well, the first commercial gas well. Maybe it’s high time we reclaimed our title.”

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