American Oil and Gas Reporter - February 2015 - 115

ConventionSection: Pennsylvania Independent Oil & Gas Association
will take four years.
"I am not sure if Shell has made a
final decision, but everything we are
seeing tells us the odds are pretty good
the company will go ahead and build the
plant," D'Amico says. "It is feasible because of low natural gas prices and
because of all the liquids in Ohio, where
it is just a short trip across the border."
Shell signed the first purchase agreement on the 300-acre site in March 2012
and exercised an option in November to
buy a former zinc smelter for the cracker.
According to news reports, the company
extended its option to purchase the property on the Ohio River three times before
moving ahead with the buy.
Former Pennsylvania Governor Tom
Corbett has thrown the commonwealth's
support behind the project, offering as
much as $1.7 billion in tax credits, news
reports indicate.
Slagel says low natural gas prices are
improving the project's economics even
more by increasing the spread between
the input gas and finished output. "If
Shell actually made a commitment to

begin construction of the ethane cracker,
or at least got the necessary permits to
do that, then Pennsylvania would see a
glimmer of hope that it actually would
happen," he says.
Other Gas Options
The natural gas industry continues its
efforts to increase natural gas demand in
Pennsylvania, D'Amico says, adding PIOGA is the only state oil and gas association with a full-time employee whose
sole job is to develop new gas markets.
Since June 2013, he says Joyce Turkaley
has worked with the association's Transportation and Marketing Committee and
End Use Subcommittee to expand the
use of Pennsylvania-produced gas in sectors ranging from motor vehicles to electric
power generation.
"Joyce is working very diligently on
every aspect of the gas market, talking to
the electric industry and trying to help
solve the problems in getting supplies
for power plants. She also has worked
with parties interested in liquefied natural
gas and compressed natural gas vehicles,"

D'Amico praises. "That effort will continue."
D'Amico says one of PIOGA's biggest
demand-side successes is developing good
communications and business relationships
with PJM, a regional transmission organization that coordinates wholesale
electricity distribution across all or parts
of 13 Mid-Atlantic states. He says in addition to what has been accomplished so
far in the power generation sector, working
with PJM is likely to open electric markets
for producers, while increasing the reliability of gas supplies to generating facilities.
The motor vehicle sector also represents
a growth opportunity for Pennsylvania's
natural gas, D'Amico says, and the state
now contains 26 compressed natural gas
fueling stations. PIOGA and local officials
are working to expand that number, but
he cautions there still is long way to go
before market numbers register significant
demand.
Fueling stations are not the reason
natural gas use in the transportation sector
is developing so slowly, Slagel assesses.

FEBRUARY 2015 115

American Oil and Gas Reporter - February 2015

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