Trump promises policies to support more mega US energy projects

President Donald Trump is committed to expanding U.S. energy production and increasing manufacturing, he said as he toured the multi-billion-dollar Shell cracker project in Pennsylvania.

Construction on the Shell Cracker in Pennsylvania. By Drums600 - Own work, CC BY-SA 4.0,

Speaking to a crowd of union workers and reporters, President Trump said bigger U.S. energy projects were coming as his administration rolls back environmental regulations.

“Investments that could bring more than 100,000 new jobs to this region are now being looked at very seriously. This is an incredible region. You’re sitting on top of something special. It’s all fueled by the greatest treasure on the planet: American energy. And we don’t want people taking that away from us,” President Trump told the crowd.

Since 2010, petrochemical producers have announced significant expansions of capacity in the U.S., reversing a decades-long decline.

To date, 334 chemical and plastics projects cumulatively valued at $204bn have been announced, with 53% of the investment completed or underway and 40% in the planning phase, according to the American Chemistry Council (ACC).

Today the U.S. is the top producer of oil and gas in the world. And the U.S. Department of Energy Information Administration projects that next year the U.S. will be a net energy exporter.

“But this is just the beginning. My administration is clearing the way for other massive, multi-billion-dollar investments,” President Trump said at the Shell cracker event.

The Trump administration is pushing for energy dominance by seeking to maximize oil, gas and coal production by slashing regulations.

Many of these projects Trump claims credit for began in earnest before Trump took office in 2016. However, market players expressed that projects are more likely to move forward during an energy friendly administration.

Energy Policy

The White House issued a statement listing its achievements toward energy dominance since President Trump has been in office.

“Under the Trump Administration, regulations that unfairly punished the energy industry have been replaced, initiating an increase in American energy production,” the statement said.

President Trump withdrew from the Paris Climate Agreement and helped the coal industry by ending regulations such as the Clean Power Plan.

The Administration expanded energy production through the approval of oil pipelines and by unlocking America’s abundant natural resources.

Regulations on American manufacturers have also been removed, allowing manufacturers to focus on production, expand their operations, and hire more employees.

Fewer regulations combined with lower energy costs have led to the current American manufacturing boom.

Trump said the Shell plant and other recent projects “celebrate the revolution in American energy that’s helping make our economy the envy of the world.”

Northeast Resources

Trump specifically spoke of the energy dominance happening in the Northeast Region where the Utica and Marcellus shale plays are producing nearly 40% of total U.S. natural gas supply.

The Appalachia region of Pennsylvania, Ohio and West Virginia produces 33 Bcf/d or 37% of total U.S. gas supply. The Northeast shales now produce nearly 10% of the world’s gas.

“Appalachian shale gas is the principal driver for growth in national production,” Assistant Secretary for Fossil Energy Steven Winberg of the U.S. Department of Energy said.

“Co-produced natural gas liquids (NGLs) including ethane, propane, butane and pentane are projected to grow to 1.9 m bbls by 2050,” Winberg said.

Winberg was speaking at Petrochemical Update’s Northeast Conference in June.

The Shell project in Monaca, Pennsylvania is the first cracker outside the U.S. Gulf Coast region in over two decades. Analysts expect there will be more given the vast resources of feedstock ethane in the northeast region.

A world scale ethane cracker processes 90,000 bbl/day of ethane.

Appalachian ethane production is projected to be 640,000 bbls/day by 2025 and 950,000 bbls/day by 2050, Winberg said. 

Ethane Storage and Distribution Hub

U.S. Energy Secretary Rick Perry, who accompanied Trump to the Shell plant, has embraced an up- to $10bn Appalachian Storage and Trading Hub project to hold liquids from natural gas production.

The project could help support the building of more petrochemical plants in West Virginia, Ohio and Pennsylvania.

The U.S. Department of Energy (DOE) published a Report to Congress in December 2018: Ethane Storage and Distribution Hub in the United States.

The report highlighted the potential in Appalachia for the development of a new ethane hub based on the tremendous low-cost resource from the Marcellus and Utica shales, and the accompanying security and reliability benefits derived from geographic diversity in the nation’s petrochemicals manufacturing base.

“There is an incredible opportunity to establish an ethane storage and distribution hub in the Appalachian region and build a robust petrochemical industry in Appalachia,” said U.S. Secretary of Energy Rick Perry at the annual National Petroleum Council Meeting in Washington D.C.

“As our report shows, there is enough global need, and enough regional resources, to help the U.S. gain a significant share of the global petrochemical market. The Trump Administration would also support an Appalachia hub to strengthen our energy and manufacturing security by increasing our geographic production diversity.”

This Report to Congress examines the potential for a hub by comparing it to existing ones that already service the Gulf Coast and Permian Basin, which account for most of the U.S. growth in NGLs outside of Appalachia.

In addition, market analysis from the report emphasizes that the development of an Appalachian hub may offer a competitive advantage for the U.S. to gain global petrochemical market share while not conflicting with Gulf Coast expansion. The report explains that a new Appalachian hub would enhance the geographic diversity of the vital US petrochemical industrial sector, supporting U.S. economic security.

US Energy Resources

Indeed, the resources in Appalachia along with the Permian basin in West Texas are making the U.S. the largest natural gas producer ever, with output now above Russia.

Appalachia and the Permian together comprise 55% of total U.S. gas supply. U.S. gas reserves have ballooned 85% since 2008 to 420 trillion cubic feet.

“The energy revolution is also creating new jobs in West Virginia, New Mexico, Colorado, Texas, Kansas, Louisiana, Indiana, Michigan, Illinois, Tennessee, North Carolina, South Carolina, all across our beautiful land,” President Trump said.

By Heather McGuire Doyle