The DVMA’s second quarterly meeting, a panel discussion titled “Doing Business in the Marcellus”, brought experts from the oil and gas industry, state government, service industries, and consulting firms together to discuss how Marcellus Shale has impacted and – even more so in the future – will effect businesses in the Delaware Valley.

However, it quickly became clear that the effects of Marcellus Shale development – and the direction it will take in the coming years – is far greater than what some would consider to be the parochial interests of those located in Southeastern Pennsylvania, even though the region is home for millions of people.

Some of the first words from the panelists’ lips concerned the national and, more surprisingly, international ramifications of the huge and growing supply of cheap, natural gas and related products of the Marcellus. For example, reference was made to the Carlyle Group’s recently announced plans to invest at least $200 million to upgrade Sunoco’s Philadelphia refinery to refine North Dakota shale oil that is cheaper than the West African crude it now refines. It plans to switch to newly abundant natural gas to power part of the refinery.

There was also a discussion by IHS Consulting Managing Director Brendan O’Neil of his firm’s study recommending that Sunoco’s Marcus Hook refinery could, among other options, be repurposed to process natural gas liquids. It will do this by constructing a shale-based ethane cracker to produce polyethylene and other downstream plastics derivatives, which are important raw materials for a wide range of products used in packaging, personal care, consumer products, automotive, adhesives and cable/pipe. Others on the panel recognized Southeastern Pennsylvania as a logical site for a liquid natural gas (LNG) production and storage facility to export gas, particularly to Western Europe.

Several days after the DVMA’s quarterly meeting panel discussion, Helge Hove Haldorsen, Ph.D, VP Strategy and Portfolio Development & Production – North America for Norwegian oil and gas exploration and production giant Statoil, spoke at another event literally across the street from the location of DVMA meeting. He outlined Statoil’s strategies for expanding its U.S. and North American presence – all of which involve production of oil and gas from unconventional sources. In fact, Mr. Hove Haldorsen remarked “We’re not running out of oil, we’re running out of ‘easy oil.’” In the future, unconventional sources – such as Marcellus Shale, which is Statoil’s largest gas play in North America – is where the world’s energy needs will be met.

National and international media are reporting with growing frequency on the effects of rising rates of shale oil and gas production, and particularly Marcellus gas, on the world economy and geopolitics. For example, The Wall Street Journal published an article on September 21 titled “Shale: A New Kingdom in Energy Geopolitics”, which states that several companies have requested government permission to export LNG from the United States. Once such LNG exports occur, Europe, where natural gas prices are almost five times higher than current U.S. prices, is the likely destination. Such LNG exports will do much to reduce European’s energy dependence on Gazprom – Russia’s government gas monopoly – and help reduce the U.S. trade deficit as well.

Interest in the impact of shale gas on the world economy is also increasing in Europe. Two weeks ago, the French business publication Capital, with a readership of over 200,000 influential business leaders, sent a reporter to Pennsylvania to write a story on how Marcellus Shale gas drilling and production has impacted the state economy.

Marcellus Shale oil and gas production, with its proximity to the American industrial heartland, Pennsylvania’s pipelines, and Philadelphia’s ports, promises to shrink an increasingly small world even further to the benefit of businesses located in the Delaware Valley.