The Ohio Shale Play: Downstream Opportunities.

1. The Ohio Shale Play: Downstream Opportunities.

2. 18 Months Ago

3. What is the BIG PICTURE today? With a significant contribution from horizontal drilling and hydraulic fracturing in North Dakota to Texas to Ohio and Pennsylvania: The United States in 2013 met 87% of its energy needs according to the Energy Information Agency of the DOE In fact, 90% of the need was met in December of 2013

4. What about Ohio specifically? Natural gas production has doubled since 2012 Natural gas production at the ned of 2013 was 203 billion cu. ft. Oil production has also doubled to 9.7 million barrels Ohio issued 1000 permits in 2013 and drilled 553 new wells Chesapeake Energy is the top driller with 159 new wells

5. But what’s beyond drilling and hydraulic fracturing? Upstream means everything that happens at the well site Midstream is the industry term to describe pipelines and facilities that take the well products to market Downstream is the term to describe the actual sale of the products to an endorser.

6. Shale Gas Yields Many “Products” ion

7. Natural gas as a source of power Natural gas, CNG and LNG represent a growing source of low cost power Not that long ago these products were viewed from an environmental benefit perspective The cost of natural gas has decoupled from the cost of oil (related to the expanding shale plays)

8. Natural gas as a source of power Vehicles running on CNG or LNG have lower carbon dioxide emissions and lower total greenhouse gas emissions than gasoline or diesel fuel Today CNG and LNG have significantly lower fuel cost compared to gasoline or diesel fuel ($1.08 to $2.40 per equivalent gallon for gasolineor diesel) CNG and LNG can result in a 73% cost reduction. Natural gas-fired power plants emit almost half the amount of greenhouse gasses coal-fired power plants do, according to a new study released by National Oceanic and Atmospheric Administration.

9. Fuels from Shale Gas

10. Ethane to Ethylene: the Downstream Value Chain Ethylene is the most significant single chemical in terms of volume and value Literally 1000s of products are in the ethane to ethylene value chain Abundant ethane form natural gas to produce ethylene provides US Ethylene a 3 to 1 dollar advantage against Europe and Asia Polyethylene is the number 1 plastic by volume and value

11. Ethane to Ethylene: the Downstream Value Chain According to the ACC and a survey or 100 announced projects, the incremental investment in chemicals from the shale plays is over $72 billion Most projects are focused on expanding capacity for ethylene and ethylene derivatives The result will be a $67 billion out put for the industry

12. New Chemical Industry Capital Investment from Shale, 2010-2020, By Region*

13. Natureal Gas Liquids (NGLs)

14. Examples of Other Derivative & Plastics Value Chain

15. So What about Ohio? The region is well positioned to capture value from this chemical industry revolution The Ohio Polymer & Chemicals industry has a gross state product of $13.7 billion 1200 firms support 90,000 Ohio jobs Ohio is a global leader and ranks 1st in polymer industry output , 1st in rubber products output and 2nd in plastics output

16. So What about Ohio? Minimum risk and lower cost Easy access to supply chain and customes Skilled Ohio workforce Industry leaders and partners in Polymewrs and chemicals

17. Our Region is well-positioned to leverage resources from Shale Gas

18. Energy & Fuel to Plastics & Derivatives

19. Our Region’s opportunity in Downstream

20. Thanks!Special Thanks to Team NEOQuestions?