Shale Development Boosts Economic Outlook for West Virginia
Two cities along the Ohio River in West Virginia are realizing the true positive economic impacts of shale development. Both Wheeling and Parkersburg are experiencing an economic renaissance, attributable in part to construction activity and midstream build out associated with oil and gas production. Billions of dollars are being invested into these two communities, spurring job creation and increasing tax revenue in the process.
In the Wheeling area, according to McGraw Hill Construction, investments have grown from $60.3 million in 2012 to $1.72 billion in 2013, representing an astonishing 2,752 percent investment increase over just a one-year timeframe. These investments are tied to hotel construction, as well as expansive natural gas processing facilities and pipeline projects by MarkWest Energy Partners, Williams Energy and Blue Racer.
Here’s how Keith Hughes, business manager at Ironworkers Local No. 549 in Wheeling, described the situation:
“I see another 5-10 years of construction like this. It has been tremendous for our area and we appreciate all of the work we are getting.” (emphasis added)
Williams spent $1.64 billion in new construction during 2013 and plans to invest $1.3 billion in new construction in 2014, all while expanding its Fort Beeler cryogenic processing plant near Moundsville.
MarkWest Energy Partners, meanwhile, has spent around $2.2 billion on pipelines and natural gas processing facilities in the region over the past several years. Currently, MarkWest is in the process of expanding its natural gas processing facility in Majorsville, WV, by adding a second de-ethanizer.
Down the river in Parkersburg, Mayor Bob Newell is ecstatic with all of the good news surrounding his community. Fresh off the announcement of a possible multibillion dollar cracker plant being located nearby, things are on the up and up for the community.
“We had already had a lot of interest, with the drilling and Marcellus Shale activity, but that has escalated everything,” Newell said.
The proposed petrochemical complex by Brazilian-based company Odebrecht could potentially house an ethane cracker plant, three polyethylene plants and associated infrastructure for water treatment and energy co-generation. This plant would unquestionably be a game changer for not only Parkersburg but for the entire Ohio Valley, spurring the creation of thousands of jobs in a variety of fields.
Following the announcement by Odebrecht, the calls started coming in from companies wanting to locate in the area. As Mayor Newell said:
“We’ve had several calls for property since then, and buildings. I think in this coming year, you will see a lot of empty buildings filling up. I wouldn’t call it a big rush, but there is extraordinary interest in property right now.”
Besides the Odebrecht announcement, Mayor Newell was particularly excited when it was announced that the abandoned Uptowner Inn was purchased and is now being renovated into a 70-room extended stay hotel by MPH hotels. The Uptowner Inn had been vacant for nearly 25 years.
Shale development is having a significant economic impact along the Ohio River. These two cities alone are encountering investment and interest in their regions that they have not seen in a long time. In addition to the jobs within the oil and gas industry, the construction and spinoff jobs created from the building of processing facilities and, ultimately, new petrochemical complexes will continue to strengthen the economy in the area. When West Virginia, as well as the rest of the country, is coming off an economic downturn, this news couldn’t come at a better time.