Shale Gas Brings Prosperity to Appalachia

Reuters -- "Appalachia has fallen from its prime when steel mills and coal mines anchored middle-class communities and offered hope there always would be enough work to go around. In this historically poor region nestled in the misty mountains of the eastern United States, most steel mills shut down long ago and the coal workforce has shrunk by 90 percent in the past 40 years.

Residents are now counting on cheap natural gas from the massive reserves in the Marcellus and Utica shale rock formations, which lie under a swathe of the north-eastern United States, to reinvigorate the region's economy. In the Northern Appalachia area alone, where West Virginia, Ohio and Pennsylvania converge, billions of dollars of investment is planned by major companies, including most recently Royal Dutch Shell, to recover the gas and build new chemical plants.

With new natural gas supplies, Appalachia, known for decades for getting government hand-outs, is beginning to emerge as an international manufacturing hub.  Caiman Energy LLC, Chesapeake Energy Corp and other natural gas drillers and pipeline operators have already hired hundreds of workers in the region. Dominion Resources Inc is building a plant to separate ethane from natural gas for use in chemical manufacturing.

Shell's chemical complex, which was announced last summer and will take four years to build on 200 acres, will turn ethane from natural gas into ethylene. Shell will then turn the ethylene into the lucrative chemical polyethylene, used to make packaging, cushions and clothing.

Supporters say Shell's chemical plant and others expected to be built in the region will help make permanent a financial bubble brought by drillers, guaranteeing a solid tax base for at least the next half century with hundreds of high-paying jobs.

Appalachia is geographically well placed as a chemical manufacturing site because 45 percent of U.S. demand for polyethylene is concentrated in north and northeastern states from Maine to Minnesota. Appalachia also has an extensive network of pipelines and railway tracks, and sits on the Ohio River, a tributary of the Mississippi River and a major transportation route."