07.14.17

Capito seeks federal buy-in into regional ethane storage hub

U.S. Sen. Shelley Moore Capito, R-W.Va., hopes the federal government will get behind a proposal to create a regional ethane storage hub somewhere in West Virginia, Ohio, Kentucky and Virginia now that U.S. Energy Secretary Rick Perry is aware of the idea.

Capito held a roundtable discussion July 7 with Perry, U.S. Sen. Joe Manchin, D-W.Va., U.S. Rep. David McKinley, R-W.Va. and state Commerce Secretary Woody Thrasher to talk about the economic possibilities for West Virginia if an ethane storage hub comes to the region.

"In the past 10 years, the fracking revolution has unlocked access to trillions upon trillions of cubic feet of natural gas and their associated liquids in Appalachia from the Utica and Marcellus shales," Capito said prior to the meeting. "The next chapter of that story of prosperity can be written by our success in developing an ethane storage hub in Appalachia.

"Our region is ideally situated to take advantage of the resources beneath our feet. We have a skilled workforce eager for new opportunities, and a long legacy of expertise in the chemical and manufacturing industries, supported by our research universities like WVU."

In May, Capito and Manchin joined forces with U.S. Sen. Rob Portman to introduce a bill allowing for the study of creating a regional storage hub. McKinley is working on a similar plan in the House of Representatives.

Thrasher has already been in negotiations with officials from neighboring states about creating a secondary ethane industry in the region, on the supposition that an ethane cracker facility or storage facility in one state can help neighboring states.

Part of the thinking behind the proposed project is to create localized ethane storage and ancillary industries in the area instead of just exporting natural gas to other states to exploit, as happened when West Virginia's coal reserves were first tapped.

Capito agrees.

"We have a lot of untapped potential (with the natural gas industry)," Capito said. "Before we ship everything down to Louisiana and Texas, why don't we keep the resource where it is and grow the economy too?"

Prior to the May 7 meeting, Capito said, "(Perry) had not heard of it. Being a Texan, he has an idea of what the potential could be.

"He realizes we have a very large supply of gas," Capito said. "It would be a private project, but what kind of government support, including the president, would there be?"

Capito said Perry showed interest in the idea, and suggested the Trump administration might be able to help the proposal through loan guarantees or permitting. "(Perry) seems very interested in it," Capito said. "We're going to follow up with him on it."

Development of an ethane storage hub could still be several years away. "I think it's moving," Capito said, "but you're talking $8 billion to $10 billion here. That's a LOT of money."


By:  Rusty Marks
Source: The State Journal