1 1

JobsOhio Energy/Chemicals Sector Strategy Update

November 2019

2

JobsOhio’s History A privatized economic development organization

Ohio Government Leaders Authorized Private Structure for JobsOhio.

2011

Ohio Liquor Enterprise Acquired (for 25 Years) to Fund JobsOhio.

2013

3

JobsOhio’s History A privatized economic development organization

Ohio Government Leaders Authorized Private Structure for JobsOhio.

2011

Ohio Liquor Enterprise Acquired (for 25 Years) to Fund JobsOhio.

2013

4

JobsOhio Today

VISION

•  Drive job creation and new capital investment in Ohio through business attraction, retention and expansion efforts.

•  Retain and attract in demand talent.

•  Lead the nation in private sector job growth. •  Be the top economic development organization in the U.S. •  Premier destination for in demand talent •  Leverage State assets including Wright Patterson Air Force Base

•  90+ Full Time Associates •  6 Regional Partners •  Hundreds of local economic development partners across the state •  International Business Development partners in select markets

MISSION

PEOPLE

5

JobsOhio Today

VISION

•  Drive job creation and new capital investment in Ohio through business attraction, retention and expansion efforts.

•  Retain and attract in demand talent.

•  Lead the nation in private sector job growth. •  Be the top economic development organization in the U.S. •  Premier destination for in demand talent •  Leverage State assets including Wright Patterson Air Force Base

•  90+ Full Time Associates •  6 Regional Partners •  Hundreds of local economic development partners across the state •  International Business Development partners in select markets

MISSION

PEOPLE

6

JobsOhio Today

VISION

•  Drive job creation and new capital investment in Ohio through business attraction, retention and expansion efforts.

•  Retain and attract in demand talent.

•  Lead the nation in private sector job growth. •  Be the top economic development organization in the U.S. •  Premier destination for in demand talent •  Leverage State assets including Wright Patterson Air Force Base

•  90+ Full Time Associates •  6 Regional Partners •  Hundreds of local economic development partners across the state •  International Business Development partners in select markets

MISSION

PEOPLE

7

JobsOhio’s Partnership Model

•  6 regional economic development partners •  Local economic development partners and communities •  Local, state and federal officials and government entities •  Infrastructure partners including electric, natural gas, fiber, sewer and water

Key Stakeholders

8 8

Energy and Chemicals

Industry in Ohio

9

Energy & Chemicals Industry Snapshot

Major Employers Marathon - 9,200 American Electric Power - 6,000 Sherwin-Williams - 5,045 Goodyear Tire and Rubber - 3,300

$42.8 B Energy & Chemicals GSP

88,000 People working in Energy & Chemicals

2,398 Establishments in Ohio

17,000 Petrochemical and Downstream Converters in Ohio

10

Robust Energy/Chemical Environment Every part of the energy value chain is represented in Ohio. This means companies that choose Ohio gain the advantages that come with having an accessible, affordable and sustainable source of natural gas and NGLs.

11

Low Natural Disaster Risk

The map above overlays Earthquake (both moderate and high risk), Flood, Tornado and Hurricane risks in the continental United States. Data for this map was provided by Redcross.org and Noaa.gov.

“At the request of Congress, we’ve spent a significant amount of time studying the matter … and there is an incredible opportunity, the potential for establishing an ethane storage and distribution hub in the Appalachian region and for building a robust petrochemical industry in Appalachia,” US Energy Secretary Rick Perry (December 4, 2018)

Earthquakes - Moderate

Earthquakes - High

Floods

Hurricanes

Tornados

12

Monthly Dry Shale Production

•  Region represents 85% of shale gas growth in U.S. since 2011

•  Over 3,100 wells permitted

•  Over 2,600 wells drilled

•  Over 2,300 wells in production

•  Significant liquids markets developed

•  Over $19 billion of midstream investment committed and $74 billion across entire value chain

Shale Development: Foundation in Place, Long-Term Future

Updated as of 10/7/19 Source: Ohio Dept. Of Natural Resources

13

Ohio’s Regulatory Environment and Access to Market

What you find here, you won’t find anywhere else.

14

Key Achievements

Key Sector Achievements 1.  Tracked $74 billion of private capital investment since 2011 directly related to

Shale Development in Ohio 2.  Attracting More Downstream Projects connected to Shale Development 3.  Utilized JobsOhio’s flexible funding to bring natural gas to constrained areas

(Sofidel/Circleville and Ashtabula) 4.  Landed major interstate gas pipelines, opening up the availability of cheap gas

to more parts of Ohio 5.  Secured 4 new gas-fired power plants, now in operation & 2 under construction 6.  10-year low electric prices, world’s cheapest natural gas prices, while reducing

Ohio’s Co2 emissions by 38% 7.  Nearing the final decision on PTTGCA/Daelim’s ethane cracker, would result in

largest private investment in Ohio

Interfacing with State Agency Partners 1.  OEPA - coordination on nearly every project 2.  ODOT - critical due to complex nature of

projects/sites 3.  ORDC - critical as most chemical projects

have a rail component 4.  ODNR - critical for upstream & downstream

permitting 5.  Tax - very helpful due to complex nature of

plants 6.  PUCO - critical due to utilities being such an

important component of projects

15

Pre-2011 Energy and Chemical Presence in Ohio

Raw Fossil Fuels

Complex Chemicals

16

Focused on Remaining Gaps in Value Chain

Raw Fossil Fuels

Complex Chemicals

~$74 Billion (USD)

Invested

17

Regional Plastics and Polymer Industry

Ohio and Region Contain: •  Over 17,000

Petrochemical & Downstream Converters

•  45% of North American

Plastics Demand within 500 miles

•  #1 Supplier State to

Boeing & Airbus •  Largest concentration of

automotive manufacturing

PTTGCA/Daelim Project Site

Source: D&B Hoover’s 2019 NAICS 325, 3261, 3262 >10 Employees

Chemical Manufacturing

Plastics Products Manufacturing

Rubber Products Manufacturing

18

Close to Market

PTTGCA/Daelim Project Site

Resin Manufacturers and Suppliers

Custom Compounders

Machinery Manufacturers

Tool, Die and Mold Manufacturers

Plastic Processors

Source: D&B Hoover’s 2019 NAICS 325211, 325991, 333, 333514, 3261 >10 Employees

19 19

Skilled and Experienced Workforce

20

Ohio Workforce and Wages

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

$50.00

Electricians Welders Carpenters Construction Mgrs

Sups of Construction

Trades

Chem Engineers

Chem Equipt Ops &

Tenders

Chem Plant & System Ops

Chemists Petro Pump System Ops

Ohio National

Sources: QCEW and EMSI Analyst

Ohio Wages ~ 7% Lower than National Average

21

Ohio Workforce – Construction and Operations

50% increase in degrees and certificates granted for Chemistry, Petroleum Engineering, Chemical Process Technology, and similar programs since 2010

Chem. Op 1 Chem. Op 2 Chem. Tech

Select Educational Programs

International Union of Operating Engineers Local 18 – Large Projects

•  Ohio Edison Sammis Power Plant 2,200 total tradesmen

•  Honda Auto Plant 4,000 total tradesmen

•  AEP Cardinal Plant Muskingum River Plant 3,000 total tradesmen

•  Sun Coke Heavy Industrial Plant 1,000 total tradesmen

•  Rockies Express Pipeline 2,500 total tradesmen

•  ATEX Express Pipeline 4,000 total tradesmen

•  Mark West – Cadiz, Seneca & Hopedale Plants 5,000 total tradesmen

Sources: U.S. Bureau of Labor Statistics, Location Matters 2015 Report, Tax Foundation, KPMG, Cushman & Wakefield, National Center for Education Statistics.

Petroleum Engineering

ShaleNET Assoc. & Cert. Programs

22 22

PTT/Daelim Petrochemical

Complex Partnership

23

Project Timeline

JobsOhio engages with PTT on Emery

Oleochemical expansion

2012

JobsOhio and PTTGCA began

incentive negotiations and site

selection effort on Petrochemical

Complex

Throughout 2014, JobsOhio and

PTTGCA outline permitting

approach, discuss workforce strategy, visit the project site

and other critical items

PTTGC Executives

meet with Ohio Governor Kasich

multiple times

April: PTTGC announcing that the site in Ohio is their preferred location

September: PTTGC CEO and Governor Kasich hold press

conference announcing that

PTTGC will being engineering work on

Ohio site

May: PTTGC Board of Directors visits

the project site and meets key federal,

state and local officials

December:

Potential investment banks visit key state

officials and visit project site

Permits issued for

project and site remediation

complete

PTTGCA purchases 167

acres of the 500 total acre

project site

2013

2014

2015

2016

2017

2018

January: PTTGC and Daelim

announce that they are proceeding with

a “Heads of Agreement” to

become partners on the Belmont County,

OH project

April: announced Bechtel as EPC firm

May: purchased the remaining 320 acres

November: Air Permit public

hearing

December: Air Permit issuance

2019

June: Bechtel chosen as EPC firm

June: JobsOhio &

PTTGCA extend property option agreement

June: JobsOhio executes

$30 million grant with PTTGCA to assist with

initial site work

July: Initial site work begins

24

PTTGCA/Daelim Project Overview

•  PTTGCA/Daelim own a nearly 500-acre site on the Ohio River in Belmont County, Ohio

•  Marcellus and Utica Shale development in western Pennsylvania, West Virginia, and Ohio has resulted in significant natural gas and natural gas liquids (NGL) production over the past 10 years

•  One of the primary NGL’s that is being produced in mass quantities is ethane, the major building block for polyethylene, which is the foundation for making plastics that go in to nearly every product used today

Production is prolific, resulting in some of the lowest cost gas and NGL’s in the world

25

Project Site Location in Relation to Shale

26

PTTGCA/Daelim Site

Stack Demolition - July 29, 2016 Former Power Plant Site - 2009

Remediated Site

27

JobsOhio’s Project Assistance

Much work has been done to help the project move forward including:

•  Power plant demolition and environmental remediation complete

•  Developed relationships with local citizens and elected officials to support the project

•  Partnered with skilled trades to ensure that the construction workforce is available for the project

•  Working to create a workforce development/talent acquisition training program

•  JobsOhio and PTT have finalized a grant agreement so that PTT can access the $30 million revitalization grant as they began initial site preparation work in July 2019

JobsOhio worked with Norfolk Southern Railroad and the Ohio Rail Development Commission within ODOT to secure $16 million grant funds for rail upgrades needed for the project.

All permits have been issued, including the air permit, which was issued on December 21, 2018.

If the project moves forward, final site work and construction can begin immediately. To date, JobsOhio has spent over $30 million on site preparation, demolition, and land acquisition costs.

28

Permitting Approach

•  Given the size and scope of the project, JobsOhio convened all necessary regulatory agencies early in the project

•  Ohio EPA played a critical role in understanding the scope of the project, outlining a clear path for permitting and coordination with U.S. Army Corps of Engineers

•  Ohio History Connection/State Historic Preservation Office worked closely with Ohio EPA and JobsOhio as an historic cemetery is located near the project site

•  Overall, JobsOhio facilitated the processes that ultimately led to the approvals of the following permits: •  Ohio EPA Air Permit •  Ohio EPA 401 Water Quality Permit •  US Army Corps of Engineers 404 Water Discharge Permit •  Ohio DNR Water Consumptive Use Permit •  Storm Water Construction Permit •  Brown Fields/VAP/Covenant Not To Sue Determinations

•  OEPA worked with PTTGCA/Daelim technical teams extensively prior to air permit application submittal.

29

Project Support and Partnership

Tremendous Local, Regional, State, and Federal support for this critically important project. This project is truly a partnership.

Photo from May 21, 2019 – Lt. Governor Husted, Mr. Punmeechow, PTT CEO, Governor DeWine, Mr. Kim, Daelim Vice Chairman and CED, and JobsOhio Board Chairman Bob

Smith

Photo from May 23, 2019 – Mr Boonyapipat, President & CEO, PTTGC America, Mr. Kim, Sr. VP, Daelim, Mr. Punmeechow, PTT

CEO, Sec. Perry, DOE, Sec. Ross, DOC, Dr. Intarajang, COO, PTTGC , Congressman Johnson, Mr. Owens, LNE Group