The Marcellus and Utica shales represent an opportunity and not a guarantee for Pennsylvania, Ohio and West Virginia to remake their economies by rebuilding their manufacturing and petrochemical industries, according to West Virginia Department of Commerce Secretary Keith Burdette.

Without the necessary infrastructure investments, the states may not fully realize the potential that these large shale plays represent. Midstream operators and producers contend that it makes sense to build and reverse large pipeline systems to transport Marcellus and Utica gas and liquids production to the Gulf Coast. However, Pennsylvania and West Virginia policymakers said not only is this not the case, but the oil and gas industry has an obligation to do more than simply move resources from the region.

“If billions can be spent to pipe and ship it elsewhere, some of those resources can be used to build and develop infrastructure that will create jobs and investment [in the tri-state area of Pennsylvania, West Virginia and Ohio],” Burdette said at the 2014 Penn State Natural Gas Utilization Conference in Canonsburg, Pa., on Oct. 15. Further, Burdette said that these states had a right to expect this support from the oil and gas industry.

This was a sentiment reiterated by David Peebles, vice president, ASCENT and senior director of the Odebrecht Group. “Business is about creating wealth, not about creating only profits. It’s about investing in infrastructure, investing in people. We have a social obligation to develop economic benefits for the people that work for us,” he said.

According to both Peebles and Patrick Henderson, energy executive for Pennsylvania Gov. Tom Corbett, there is a misunderstanding by some folks in the energy industry regarding the level of petrochemical infrastructure in place in the Northeast.

“The chemical industry in Pennsylvania is too often under the radar and we’ve got a very good story to tell. We’re the 10th-largest chemical producer in the United States with more than 125,000 jobs directly or indirectly supported in the Commonwealth by the chemical industry. … [These jobs] represent the base to build upon for the construction and implementation of a world-scale ethane cracker,” Henderson said.

Peebles added that, “There a lot of people in the Gulf Coast that don’t know anything about this region. So you’ll read analyst reports that say there’s no infrastructure in this region, but when you look at the level of investment taking place in the midstream that is connecting processing plants in Ohio, West Virginia and Pennsylvania. Most important for us, these facilities are putting in de-ethanizers and bi-directional ethane pipelines. There is a high degree of confidence on Odebrecht’s part that we’re going to have the infrastructure.”

This confidence is especially important given that Odebrecht has proposed building a cracker in Parkersburg, W.Va., that will include three polyethylene plants as well as a water treatment plant and a co-generation plant for about $4 billion.

While Peebles declined to comment on when, or if, this project would be built, both Burnette and Henderson said that it was important for the region to have a cracker break ground no matter the location.

“The effort to bring an ethane cracker, or hopefully multiple crackers, to this part of the country is not the development of a facility, but the development of an industry,” Burdette said. By ensuring that some of the production out of the Marcellus and Utica stays in the Northeast, it will benefit each of the three major states in the play by changing the face of industry in the region.

“This is not a competition between West Virginia and Pennsylvania and Ohio. If there is a competition, it’s a competition between this region of the country and the Gulf Coast as well as other locations around the world. … The competition [among the three states], as natural as it may be, to attract ethane crackers to our respective states will subside. We have to figure out how we can work together to create an industry and maximize the resources we are so fortunate to have in our states,” Burdette said.

He added that any crackers built in the region will benefit neighboring states as the locations discussed are close to state borders and will help employ workers from multiple states with about 60% coming from the home state and 40% from the neighboring state. In addition, these projects will help support regional industry growth.

“This investment can’t be the end of the process. It needs to be one step in a larger effort to reinvigorate manufacturing in our region,” Burdette said.

Just as important is creating a process to help these investments be made on a timely basis, Henderson said. “We can’t afford to say, ‘Let’s take a time out’ the way our friends have in New York and other places. We need the jobs now and capital investment is unemotional: It will go where it will get the greatest return. We need to keep some of these basic economic principles in mind when we make [regulatory and legislative] decisions.”

One of the ways in which Pennsylvania is trying to attract new investments is through the Pennsylvania Resource Manufacturing Tax Credit, which provides a tax credit of up to 5 cents per gallon for companies that use the ethane produced in the state in facilities in the state.

While this may seem to run counter to Burdette’s claim that the states must work together, it does not, as Henderson said the aim is to create a hub in the region that can sustain multiple projects in multiple states.

“The mindset we have, not only in Pennsylvania, but in our sister states of West Virginia and Ohio, is that additional projects complement each other and not compete with each other,” Henderson said.