Shale POWER Will Help Businesses Grow by Supplying the Industry

Tom Shepstone
Shepstone Management Company, Inc.

Shale POWER is a new initiative designed to help businesses find a place in the shale gas industry supply chain and to grow.

Appalachia, which includes parts of three states that are experiencing a boom due to shale gas. The challenge is to maximize the gain within the region . Ohio, Pennsylvania and West Virginia institutions are rising to this challenge by creating something appropriately called Shale POWER. It was announced at the Third Annual Marcellus to Manufacturing Conference, which was hosted by the Pennsylvania Independent Oil & Gas Association (PIOGA) in nearby Wheeling, Wheeling, West Virginia, which is sandwiched between the Marcellus and Utica shales.

shale power

The Shale POWER initiative, financed by a grant from the Appalachian Regional Commission, is led by the Southwestern Pennsylvania Commission and managed by Catalyst Connection, the latter providing technical assistance and management consulting services in helping businesses modernize manufacturing and leverage new opportunities. Catalyst is supported by agencies and organizations from all three Appalachian states. The following is a news release describing its new Shale POWER project via the results of a panel discussion from the conference:

Petra Mitchell, President & CEO of Catalyst Connection, facilitated a discussion with project leads Matt Henderson of Henderson Consulting and Katie Klaber of The Klaber Group. The team provided an overview of the project and its partners, resources and action steps for manufacturers and ways energy companies, manufacturers and economic development professionals can participate in the project.

Mitchell provided an overview of the Shale POWER program, the funding and partners leading the effort. The project has been funded by the Appalachian Regional Commission to counter the economic hardships brought about by the decline in the coal industry. The Southwestern Pennsylvania Commission leads the Shale POWER Initiative and Catalyst Connection manages the activities, along with the West Virginia Manufacturing Extension Partnership, Ohio’s Manufacturing Extension Partnership organizations (Ohio State University and MAGNET), and the nonprofit Johnstown Area Regional Industries (JARI).

Katie Klaber explained the shale gas supply chain and its complexity. “The upstream sector of the industry is possible because of drilling and hydraulic fracturing equipment, the associated fluids, proppants, pipe and parts that come together to coax gas and liquids from the earth. The midstream sector also deploys equipment to prepare and install infrastructure and the hardware to build and maintain gas processing and fractionation equipment,” said Klaber. “The downstream sector ranges from multi‐billion dollar plants, such as Shell Polymer’s to natural gas‐fired power generation facilities, all of which require equipment to build and maintain. Even the use of the petrochemical plant products are part of this supply chain.”

“Unfortunately, many in the general public and among our local businesses still do not understand that they are benefitting from the supply chain or have opportunities in it that have not yet been realized. In part, that is because it is not an easy industry to navigate – so many players and a supply chain that has been long‐established in other parts of the country. But this industry will be here for a long time, and the more that our local manufacturers benefit from its presence, the better for us all,” concluded Klaber.

Matt Henderson went on to discuss why now is a good time for manufacturers to enter the supply chain. “The United States is in a position of abundant, affordable and accessible natural gas. This is a reality, no longer speculation or promises of what is to come. This production has made the United States more competitive on the global market. While over the last decade the focus has been on production of the resource, this next decade will be marked by utilization of the resource,” said Henderson. “The pandemic has increased our country’s awareness on ho dependent we are on imports. We have strong tailwinds that indicate a manufacturing renaissance is on the horizon, enabled by accessibility to an abundant supply of natural gas and natural gas liquids and built on a foundation of manufacturing in this region.”

Klaber proceeded to outline the value proposition for the energy industry to partner with Shale POWER. “The project will provide opportunities for the energy industry to identify new suppliers in the region, leading to lower transportation costs and higher reliability and supply chan redundancy. Energy companies and their suppliers continuously innovate, and this region can contribute a disproportionate share of that innovation given our long history of manufacturing excellence. Additional collaboration with local businesses and economic development organizations will lead to unique long‐term partnerships for the industry and a greater understanding of the industry in this part of the country. “

Henderson outlined steps manufactures can utilize to develop their business development strategy. “The key is planning. This is a long‐term proposition measured in decades, not years. The goal is to build long term sustainability,” explained Henderson. “Become a student of the industry and get a solid understanding of how the industry works. Truly learn who your buyer is – where you fit along the supply chain. Once you have identified your entry point, refine your value proposition and communicate this clearly to the industry purchaser.”

Mitchell concluded the discussion with the specific actions our region’s businesses can take to participate in the Shale POWER program. “Energy companies, please reach out to us to get involved for the many benefits. We are looking for manufacturers to join the project to explore whether there are opportunities to expand in this supply chain, and if a mini‐grant may be the place to start. To our economic development community, please work with us on this ambitious and critical project for the region.”

This is an interesting development that will provide businesses having a new idea they wish to sell to the industry, with a place to start. Capturing a piece of the supply chain is key for spreading the benefits of shale. Shale POWER looks to help, so go for it!

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