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IHS Markit: Ohio Valley region will supply 45% of US natural gas by 2040

The Marcellus and Utica shale formations are among the largest sources of natural gas and natural gas liquids in the world, and their production will increase exponentially in the next two decades, according to an IHS Markit study.

Natural gas from the tri-state region of Ohio, Pennsylvania and West Virginia will supply 45% of the nation’s production by 2040, up from 31% this year, according to the IHS study.

The production of the highly lucrative natural gas liquids ethane, propane and butane (LPG) is expected to nearly double in the same period, accounting for 19% of the nation’s total by 2040, up from 14% in 2018, the study shows.

The study, “Estimated Logistics Benefits of the Shale Crescent USA Region Versus the U.S. Gulf Coast for Natural Gas and LPG” examines both production trends and the economics of petrochemical production in the region.

Research continues to drive home the myriad economic advantages for manufacturers in the Shale Crescent region when compared to other, more traditionally accepted energy and chemical hubs. Investors are catching on that the Marcellus and Utica Shale formations offer unprecedented benefits. There are few other places in the world, if any, where the supply, manufacturing facilities and end users are all in close proximity.

— Wally Kandel, spokesperson for Shale Crescent USA

The IHS Markit study, commissioned by Shale Crescent USA and JobsOhio, quantifies for the first time the anticipated development and production growth emerging from one of the world’s most prolific sources of natural gas and natural gas liquids. In 2018, an IHS Markit study evaluated the prospects for a world-scale ethylene and polyethylene plant based on ethane feedstock in the Shale Crescent USA region.

The 2019 study says the region “will play a key role in satisfying America’s increasing reliance on natural gas, as well as keeping energy costs moderate. Favorable production economics place the Marcellus and Utica shale plays amongst the most cost competitive in the nation.”

The study found that by 2020, cost advantages for the production of various natural gas liquids in the Midwest versus the Gulf Coast are expected to range from 6% to 26%. The savings are impacting petrochemical company expansion plans.

The abundance of natural gas and natural gas liquids has impacted our project pipeline. We are in conversations with companies seeking to expand as well as construct new plants in the region. The IHS Markit study quantifies the economic advantages of investing in the Marcellus and Utica formations.

In addition to the significant cost advantages, the Shale Crescent has the benefit of being located in an area of the country rarely impacted by extreme weather. Investors are taking notice.

—Dana Saucier Jr., JobsOhio Vice President & Head of Economic Development

JobsOhio is a private, nonprofit corporation designed to drive job creation and new capital investment in Ohio through business attraction, retention and expansion efforts.


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