Tuesday, August 25, 2009

Energy Economics And Youngstown

Update: Read "An Emerging Giant: Prospects and Economic Impacts of Developing the Marcellus Shale Natural Gas Play". Quote of note - The Marcellus shale is the largest unconventional natural gas reserve in the world.


I've prodded my Pittsburgh readers of the Burgh Diaspora blog to pay close attention to the nuclear and natural gas energy markets. I've even offered a geopolitical primer to help those interested make sense of all the news. Via Knowledge Problem ( a must-read blog), an interesting tidbit about America's emerging energy portfolio:

While an early R&D effort died following the first Gulf War, Yergin said the interest today in energy technology is huge and will "only be further stoked by the substantial increases that are ahead in government support for energy R&D. Much of that spending and effort is aimed at finding alternatives to oil. Yet the challenge is not merely to find alternatives; it is to find alternatives that can be competitive at the massive scale required."

One point Yergin mentioned in our interview but not the article: the huge potential of so-called unconventional natural gas in the U.S. thanks to the coming together of a number of technology break-throughs.

"Only in the last two months or so has Washington awakened to the reality of unconventional gas," Yergin said. "There was no master plan here, no 10-year technology road map. It was just a question of finding a combination to pick that lock."

How is this relevant to Youngstown? The V&M Star deal between Youngstown and Girard is one of the lynchpins:

V&M Star produces steel pipe and tube for primarily the natural gas market and is contemplating spending nearly $1 billion to expand its rolling mill. For months, Mahoning Valley officials have said that acreage in Youngstown and Girard is considered the strongest contender for the project.

This technology makes the extraction of gas from the Marcellus Shale much more economical. V&M Star's substantial investment is indicative of the expected upside for this method of extraction, most of it happening in relative proximity to the Steel Valley. Furthermore, as regular readers of this blog should know, Tim Ryan is a conduit for federal R&D dollars in the alternative energy sector.

There's a boom coming. Greater Youngstown needs to position itself to take full advantage of the opportunity. We at GY 2.0 are already busy in anticipation of looming workforce needs.

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