Why the Polymer Alliance Zone

The Polymer Alliance Zone is home to many global companies who have been calling the region home for many years while benefiting from the opportunities found here. Companies such as Chemours, Braskem, Ashland, Linde, APG Polymers, Star Plastics, and Solvay all operate in PAZ as well as many other recognized companies.

The cost of doing business in the Polymer Alliance Zone is among the lowest in the country, the location provides access to abundant NGLs and proximity to over 70% of the nation’s polyethylene and polypropylene manufacturing within a day’s drive.

West Virginia provides a quality workforce with the lowest manufacturing turnover rate in the country and specialized education and training to support workforce development. With the highest homeownership rate in the nation, and a cost of living 14% below national average, West Virginia offers an incredible quality of life compared to other states.

Abundant Natural Gas Supply

U.S. natural gas production has risen to record levels over the past decade due to new technology such as horizontal drilling. Nearly all of this growth has come from the states of West Virginia, Ohio and Pennsylvania (The Shale Crescent USA) which sit on top of the Marcellus and Utica Shale formations. The area is now the low cost supplier of natural gas and ethane and represents an astounding 85% of new U.S. natural gas supply. U.S. natural gas production is projected to account for 45% of the nation’s total production by the year 2040 producing as much natural gas as the entire U.S. produced prior to the shale revolution.

Shale-natural-gas-2019

Courtesy of Shale Crescent USA

U.S. Energy Information Administration (EIA) projects the region will be producing nearly one-third of all the NGLs in the United States by the year 2040. IHS Markit estimated that the Shale Crescent USA could support up to five Ethane Cracker Plants. Shell Chemical is now constructing the first in the region.

Courtesy of Shale Crescent USA

Courtesy of Shale Crescent USA

WV is Safe From Natural Disasters

And West Virginia’s location mitigates the potential for natural disasters. Natural disasters cause serious damage to tangible assets as well as to human capital resulting in reductions in productivity and profits.

Access to Water

The Polymer Alliance Zone offers over XXX miles of access to the Ohio River for transportation and processing. Over 48 million tons of freight valued at over $2.9 billion moved on West Virginia’s inland waterways in 2018, the equivalent of 1.2 million trucks. One barge tow carries the load of hundreds of rail cars and more than a thousand trucks, according to the National Waterways Foundation.

River access
The Port of Huntington Tri-State, centered on the Ohio River in Huntington, West Virginia, is one of the largest inland ports in the United States. It is the largest river port in the state of West Virginia and the 15th-largest in the United States.

Proximity to Market Demand

The Polymer Alliance Zone is a regional hub for plastic and chemical manufacturers located within a day’s drive of over 70% of U.S. polyethylene and polypropylene demand. Businesses in the Polymer Alliance Zone have a significant geographic advantage resulting from market proximity.

  • 77 percent of North American Polypropylene demand is within a day’s drive.
  • 70 percent of North American Polyethylene demand is within a day’s drive.
  • 50 percent of the U.S. population is within an 8 hour shift for trucking.
  • 30 percent of the Canadian population is located within a day’s drive.

West Virginia has 1,900 miles of railways, six major Interstates and is home to one of the largest inland ports in the U.S.

Days Drive

Skilled Labor Force

West Virginia provides a critical advantage to many manufacturing companies by providing workers who have tremendous work ethics and strong skills sets. The state has the lowest manufacturing turnover rate in the country and is below the national average in all other workforce categories according to the U.S. Census Bureau.

West Virginia’s trade schools, work-force training programs, community colleges and four-year universities are providing educated, motivated, loyal, trained and productive workers. The acclaimed West Virginia Invests Grant Program is producing highly trained workers for high-demand industries by providing the full cost of basic tuition and fees for select certificate and associate degree programs.

Learn more about West Virginia’s workforce resources:
https://westvirginia.gov/incentives-and-programs/workforce-programs/

Learn more about West Virginia’s fee training and support programs
through Apprenticeship in Motion:
https://westvirginia.gov/incentives-and-programs/apprenticeship-in-motion/

Cost Advantage

According to IHS Markit, a global leader in incisive and thought-provoking analysis, the Shale Crescent USA region of West Virginia, Ohio and Pennsylvania is the most profitable location to build a petrochemical plant. IHS Markit, reported in a study conducted for the Shale Crescent USA that the region has an abundance of natural gas resources at costs below equivalents in the U.S. Gulf Coast.

The IHS Markit study, Benefits, Risks, and Estimated Project Cash Flows: Ethylene Project Located in the Shale Crescent USA vs. the US Gulf Coast revealed savings generated by abundant NGLs, coupled with proximity to the market and thus lower delivered costs, are substantial benefits for investors. IHS Markit estimates that between 2020 and 2040, a $3 billion petrochemical project in the Shale Crescent region would generate an $11.5 billion pre-tax cash flow, as well as a NPV15 of $713 million—that’s four time higher than the Gulf Coast.

NPV15 is 4x higher in the Shale Crescent USA

Courtesy of Shale Crescent USA

The 2019 U.S. Department of Energy Natural Gas Liquids Primer Report projects that by 2050, increased natural gas production in Appalachia will quadruple 2013 levels. As a major wet gas producer, DOE projects the region’s NGLs will increase by 700 percent by 2023.

The abundance of low cost natural gas and NGLs combined with proximity to over 70% of the polyethylene and polypropylene demand in the USA within a day’s truck drive, provide a clear cost advantage to high-energy manufacturers operating in the Polymer Alliance Zone of West Virginia.

Incentives and Assistance

The West Virginia Development Office offers aggressive incentives, including development assistance if the form of tax credits and financing programs, to assist companies that are starting, relocating or expanding in the state.

Business Assistancehttps://westvirginia.gov/wv-incentives/

Financial Assistancehttps://westvirginia.gov/wv-incentives/

Expedited Permitting – Learn more about certificates of critical economic concern for high priority projects. https://westvirginia.gov/incentives-and-programs/expedited-permitting/

Opportunity Zones
Learn more about West Virginia’s Opportunity Zones to support recovery and growth in distressed communities. https://westvirginia.gov/opportunity-zones/

Polymer Affiliates