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Remarks of ASFE Steven Winberg as prepared at the Youngstown Warren Regional Chamber of Commerce Salute to Business Breakfast on September 3, 2020

 

Thank you, and good morning.

 

It’s an honor to take part in this year’s Salute to Business Breakfast. I want to thank Guy (Coviello) for inviting me to speak to you this morning, and I want to congratulate all of those who received awards this morning.

 

Let me just say that it’s a pleasure to be here in person.  After months of virtual conferences and meetings, it’s great to actually be in the same room with the folks I’m speaking to.   It’s a good sign that we’re moving back to normal. 

 

Another sign that we’re getting back to normal is that I will be attending my daughter’s wedding in Pittsburgh – and in person – this weekend.

 

So, I appreciate the opportunity to speak to those of you here today who make up the Youngstown Warren Regional Chamber of Commerce – the men and women who are helping to drive economic development and growth in the Mahoning Valley and beyond. 

 

I understand that you employ 150,000 people in this region – but that means more than simply jobs.  It means livelihoods and hopeful futures for thousands of families in Eastern Ohio.  And you continue to support your employees and your communities even as the country – and Ohio – have weathered the most severe pandemic we’ve faced in a century.

 

So, on behalf of the Department of Energy and the Administration, thank you for everything you do for Youngstown, Warren, and this part of Eastern Ohio – and especially for the people who live here.

 

As you know, President Trump and his Administration – including the Department of Energy – are committed to expanding economic growth and development – and prosperity – in Ohio and here in Mahoning Valley.    

 

And one area that’s especially important to us – and I’m sure to everyone here today – is bringing manufacturing jobs back to this region.  We’ve worked with state and local leaders to help advance this effort and we look forward to continuing that collaboration.

 

And we’re seeing good things on that front.  For instance, we’re seeing the beginnings of a turnaround in the automotive industry here, with the Lordstown Motors plant gearing up to be a center for electric vehicle manufacturing.  And we were all excited about the unveiling of their Endurance electric truck.

 

As you may know, the Department of Energy’s Vehicle Technologies Office is investing in the research and development of next generation vehicle batteries.  And we at DOE – from the Secretary on down – are excited and proud that this R&D will play a role in helping Lordstown move toward becoming the country’s “Voltage Valley.”

 

But there are other tremendous opportunities for growth – opportunities that have their backstory in the American shale gas revolution that has dramatically changed the energy landscape here and around the world.

 

Now, let me say a few words regarding the natural gas sector.  That sector, like most economic sectors, has taken a temporary hit from the COVID-19 pandemic and the response to contain its spread and impact.  But, given that long-term projections for natural gas global demand remain strong, we expect our production and exports to return to previous and even higher levels in the future.

 

The United States is in a stronger place than we were 10 years ago, and our vast natural gas resources remain ready to be produced when demand recovers – COVID-19 doesn’t change that.  In fact, the long-term growth projections for global natural gas demand remain strong – increasing more than 40 percent over the next thirty years.  So, there will certainly be demand, and the U.S. will certainly have the supply. 

 

Today, we’re seeing hopeful signs of market recovery.  Even though prices are still soft, they’re moving in the right direction. 

 

So, it may take a little more time before the natural gas market fully recovers, but we’re righting the ship and getting back on course.  And the Administration – including the Department of Energy – will continue to do whatever we can to make sure that happens sooner rather than later.

 

In the meantime, the transformation – and the opportunities – unleashed by the shale revolution continue. 

 

Sitting atop the Utica and Marcellus shale formations, Eastern Ohio and the broader Appalachian region have seen that transformation and those opportunities firsthand and up close. 

 

But more than that – with the massive volume of natural gas in these formations, this region has been leading that transformation.  In fact, if was an independent country, Appalachia would be the third largest natural gas producer on earth.  An amazing fact. 

 

And another amazing fact is that Ohio is the country’s fifth largest natural gas producer, and you’ve seen the benefits of that production and development in jobs – high paying jobs – and in the billions in income and revenue that have flowed from the vast natural resource under our feet.

 

Another thing that’s come from the natural gas resource here and across Appalachia is the potential for a new petrochemical industry and downstream manufacturing – bringing with it expanded job growth and economic prosperity to cities like Youngstown, Warren, Niles, Struthers, and other communities in this area.

 

And that’s because the gas is rich in natural gas liquids – or NGLs.  Now, I’m not going to get too deep into natural gas chemistry, but it is important to understand the value of NGLs to this region.  NGLs serve as the feedstock for a number of petrochemicals.

 

And those petrochemicals will help drive a revitalized manufacturing industry in Ohio. 

 

But you have something else that can bolster manufacturing here in Eastern Ohio – a rich history and tradition in manufacturing, especially here in Youngstown.   You’ve been there, and you’ve seen the opportunities that come from manufacturing.

 

And even more importantly, this region has a smart and talented workforce, a lot of important infrastructure, and the proximity to downstream markets – the very things that are critical to a successful manufacturing base. Not to mention that you are home to Youngstown State University who is well poised to ensure their students will be ready to fill these new opportunities. 

 

So, the exciting fact is that Eastern Ohio – along with vast swaths of Appalachia – are on the verge of a new manufacturing renaissance that can transform Youngstown and this region in a way that we haven’t seen in decades.

 

And we’re seeing concrete examples – literally – of that potential with the Shell cracker plant going up near Pittsburgh, which President Trump visited last year.

 

At peak construction, the Shell plant was employing more than 7,500 union construction workers—many of those from Ohio unions, by the way.  And it will create 600 direct jobs and 4,200 indirect jobs.

 

But that’s just one plant.  PTT is committed to moving forward with its Ohio Petrochemical Complex Project down in Belmont County.

 

It’s estimated this this project could create as many as 6,000 jobs during the construction phase and another 600 operational jobs once the facility comes on-line.  And the scale of this project will create employment opportunities across eastern Ohio.

 

Now, these numbers for the Shell and PTT plants are encouraging.  But the economic impacts of a broader petrochemical renaissance are amazing.   

 

According to a recent American Chemical Council report, a petrochemical renaissance here could spur more than $35 billion in capital investment in Appalachia; 100,000 jobs could be created and supported; nearly $30 billion in additional annual revenue could be generated; and over $1 billion per year in state and local tax revenue. 

 

Now, as we’re seeing with Shell and PTT, private capital will create this renaissance and spur economic development.  But there is an important opportunity for government – including the federal government – to create an environment conducive to investment in this kind of endeavor.

 

And – let’s be frank – that can happen only if Washington is supportive of – and not antagonistic toward – using our vast energy resources to expand resource development and our manufacturing capabilities. 

 

Thankfully, we have an Administration led by a President who explicitly supports doing those very things.  And doing them here.  In fact, last year he issued an Executive Order on Promoting Energy Infrastructure and Economic Growth that included a request to promote business in the Appalachian region, including petrochemical manufacturing and other industries.

 

As I mentioned, one of the most valuable things government can do is align economic development efforts at the state and federal levels to encourage private investment.  The federal government, wherever possible and appropriate, must complement state efforts.

 

And that’s what we’ve been doing at the Department of Energy—and we’ve been at this for a while. 

 

One of the first things we did was develop an outline for economic development, centered on a petrochemical storage hub in Appalachia that would capture natural gas liquids like ethane, to be used by manufacturers to produce plastic products – thus creating a new manufacturing center in the region.

 

But we’ve also been coordinating with other federal agencies on areas investing in public infrastructure; supporting workforce development; facilitating the investment of private capital; and communicating the market opportunity.

 

Personally, I’ve been banging the drum and getting the word out for at least two years.  But it’s not just me – from the Secretary on down, this has been a priority for DOE leadership. 

 

But more importantly, it’s been a priority for President Trump. 

 

So, today, thanks to the shale revolution that unlocked the vast natural gas resources of the Utica and Marcellus shales, we’re looking at an amazing economic and energy future for Eastern Ohio. 

 

What is most important, is for all of us to work together.  That means the Federal government, the region, the states, local government and organizations like the Youngstown Warren Regional Chamber of Commerce.  And if we work together, I am confident that every person in this room will be a witness to a petrochemical and manufacturing renaissance in this part of the country on a scale that we could scarcely have imagined just a decade ago.

 

However, there are some challenges which we need to address.  I think that we are all familiar with the policy and midstream challenges but you may not be as familiar with some of the technical challenges so I want to brief you on these.  Let me start with challenges in the field — both upstream in the development of the unconventional resources, and midstream in terms of infrastructure efficiency. 

 

Our job at DOE — and in the Office of Fossil Energy in particular — is to lead and support the research and development that will help ensure that we can realize the full potential of our vast oil and gas resources. 

 

So, let me tell you what we are doing with your taxpayer dollars.

 

First – upstream.  We’re applying data science and machine learning tools to help make it possible to process and interpret complex data streams in real time and increase production of unconventional oil and gas. 

 

We believe the development and integration of these tools — coupled with high-performance computing — have the potential to usher in a paradigm shift — from energy production and development to systems operations.

 

We also have a number of projects to address produced water challenges, which I know a lot of you are concerned about.

 

Produced water has always been a by-product of oil and gas production.  But, with the dramatic increase in production, the volume of water produced has increased.  And more water is being produced than can be used in the process of drilling, completing, and stimulating oil and gas wells.

 

Now I want to take a minute and commend the shale operators here in Ohio for their water recycling efforts.  After a deep dive through ESG reports and conversations with companies, we have found that an average of 88 percent of the water used in shale development is recycled by the top five producing companies in Ohio.  That is a number that shows that these companies are listening to the publics concerns and implementing strategies to address them.

 

But that doesn’t mean we have completely solved the produced water issue.  There’s still a lot more to be accomplished.

 

So, we’ve got a number of projects to address produced water challenges.  They run the gamut – from basic science and risk assessment, to water-treatment technology development, to enhanced water disposal options, produced water management, and other focus areas.  And we’re excited about moving further into this important research area.

 

Now, when it comes to resource delivery, we’re pursuing data science and management tools to improve operational reliability and reduce the loss from natural gas gathering, transmission, distribution, and storage facilities. 

 

We’re also beginning to look at cybersecurity, as well as continuing our focus on reducing methane losses.  And we have several R&D pathways to help us meet these goals and to pave the way for the “pipeline of the future.”

 

At the end of the day, we’re looking at an entirely new tool set for the marketplace with huge potential to provide more reliable information about the performance of critical systems and components.  It creates a number of benefits for industry, and it’s the future of “smart pipelines.” 

 

So, that’s what we’re doing at DOE. 

 

From working to advance the manufacturing and petrochemical renaissance in this region, to ensuring the continued smart production, development and delivery of our vast natural gas resources – our goal is to expand the benefits of these resources to as many Americans as possible.

 

And that includes Americans here in Eastern Ohio – in Youngstown and Warren, and all the other communities that make up this vital part of the Buckeye State.

 

Like you, we believe there’s great potential for an amazing future here.  We’re doing what we can to help realize that future, and we welcome the opportunity to work with you to make it happen. 

 

Thank you.