The Shell investment could also attract other consumers of ethylene making dozens of different ethylene based derivatives such as vinyl acetate, which Shell does not produce. From their other petrochemical complexes Shell supplies many derivative producers. It is logical that the same pattern be repeated in the Appalachian Basin. This will result a greater market for new ethylene cracker complexes to serve, creating a virtuous circle.

We shouldn’t forget the numerous existing chemical complexes in the Appalachian basin which would enjoy access to ethylene and ethylene derivatives. The basin’s chemical history is long and featured the first ethylene cracker in North America. While that plant is long since mothballed, ironically due to lack of low cost raw material, many downstream complexes remain an import ethylene and derivatives from the Gulf Coast. Local production would reduce costs tremendously. To get ethylene and other products to them a local storage and transportation hub will need to be created just like along the Gulf Coast. This infrastructure is in itself a multi-billion dollar investment.

Ethylene is the number one building block but there are other building blocks such as propylene which could logically follow for the exact same reasons. Low cost raw material, ample supply, local customers and growing global market make it ideal to export.

Shell is just the beginning of the Appalachian basin chemical renaissance, which will eventually eclipse the economic size and impact of the shale gas drilling business. These downstream investments will in turn feed new businesses. The golden era for the region is just ahead.

Tom Gellrich is the founder of Topline Analytics, focused on helping organizations leverage the profound downstream changes of the shale gas revolution. He can be reached at    267.205.1263

 Joseph Barone
www.ShaleDirectories.com