Ohio Valley Lures Manufacturers With Rock-Bottom Natural Gas Prices

June 9, 2016

A group of business leaders in a small corner of Ohio and West Virginia are laying down a big claim: They have the cheapest natural gas in the industrialized world.

This part of Appalachia has become the country’s driver of gas production as improved drilling techniques have cracked gas-rich shale formations. The Ohio Valley from Pittsburgh to Cairo, Ill., has a long industrial heritage, with chemical companies, and oil and gas producers, that have been operating there for decades. A group of them in Marietta, Ohio, and Parkersburg, W.Va. – with a combined population of about 50,000 — aim to tout their low gas prices and industrial heft to energy-hungry businesses from Brazil to Thailand.

Many businesses in those towns and nearby in Pennsylvania buy gas from a hub called Dominion South Point that has become among the cheapest in the country along with a few others above Pennsylvania’s Marcellus Shale. Tuesday’s price there averaged $1.6398 a million British thermal units, a 28% discount to the national benchmark.

That discount has been even larger at some points in recent years as Dominion South has sometimes traded below $1/mmBtu, and not above $2 since March 2015, according to IntercontinentalExchange Inc. Marietta is about only 100 miles from Pennsylvania, so close to the hub it costs just another 40 cents/mmBtu to pipe in the gas, said Wally Kandel, who manages a Solvay polymers plant there.

“We’re back at the center of energy production in the United States, and even the world,” said Jerry James, chief executive at Artex Oil Co., an independent producer based in Marietta. “We’ve got everything that a manufacturer needs.”

Read entire article at The Wall Street Journal.


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