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New IHS Markit Study Proves the Shale Crescent USA Region Is The Place To Be

Posted By Mike Chadsey, Director of Public Relations, Monday, April 2, 2018
Updated: Wednesday, April 11, 2018

It’s one thing to not have home field advantage and it’s another to be the underdog, but to be in the position to be both at the same time, is a real true challenge. I imagine that is how the three volunteers from Shale Crescent USA felt as they entered the capacity ballroom during the World Petrochemical conference in Houston recently.

The challenge that faced Jerry James, Greg Kozera, and Nathan Lord is that history and conventional wisdom and the event location were all working against their messages and effort in general.

This is the second year a team from Shale Crescent USA has made the trip to the conference. The first year, the theme was “we don’t know, what we don’t know.” So they sponsored the opening night reception, to try and make a big splash, they worked the room and made the case, to anyone that would listen, that if you were going to build or expand a petrochemical facility, you should look at the mid-Ohio valley. They came back home with one lead.

For the conference this year, they stepped up their game big time and partnered with IHS Markit and put together a study answering a few key questions for the audience at the conference. The idea was simple, how to best convey the message, with good data, that there is a greater return on investment, lower costs, shorter transportation times and closer markets in the Shale Crescent USA that along the Gulf Coast.

So armed with an over 100 page study, and the knowledge that the Shale Crescent USA is the most profitable place to build a new petrochemical facility, the crew stormed the ballroom this year primed and ready to answer those questions and from diverse group of international attendees. Their research proved to be a difference maker and they had everyone’s attention. This year, they came home with several leads and left the Gulf Coast knowing momentum has a new address. Shale Crescent USA.

Here are a few key points comparing economic opportunities for an ethylene project placed in either the U.S. Gulf Coast or the Shale Crescent:

o   A petrochemical plant located in the Shale Crescent USA would generate a four-times-higher net present value cash flow than a comparable investment in the Gulf Coast.

o   Over a 20 year period, a petrochemical plant located in the Shale Crescent USA has a pre-tax cash flow of $11.5 billion. This is $3.6 billion greater than the Gulf Coast. 

o   Ethane price: 32 percent less in the shale crescent; ethane is extracted from the natural gas stream.

o   Polyethylene delivered cost: 23 percent less in the shale crescent; polyethylene is shipped to customers for use in a variety of products including food packaging and household containers.

For more information and the executive summary of the report please visit ShaleCrescentUSA.com.  

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