05.19.17

W.Va. lawmakers revive 'game changer' ethane storage bill

West Virginia lawmakers renewed their push to revitalize their state's chemical manufacturing industry with a new ethane storage hub in Appalachia.

Sens. Shelley Moore Capito (R) and Joe Manchin (D) rolled out S. 1075 yesterday. And, Rep. David McKinley (R-W.Va.) said at the same news conference that he will introduce a companion House bill today.

The "Appalachian Ethane Storage Hub Study Act" would task the Energy and Commerce departments to determine the feasibility of building a facility in states home to the Marcellus, Utica and Rogersville shale booms.

Ethane, propane and butane are examples of natural gas liquids separated from natural gas that is used to produce electricity. "Wet gas" is a key feedstock for chemical manufacturing.

"Natural gas and ethane is to the chemical industry as flour is to bakery," American Chemistry Council President and CEO Cal Dooley said at the news conference.

The natural gas renaissance over the last decade has transformed the United States from one of the most expensive countries to manufacture chemicals to one of the most affordable. According to ACC, 301 projects — nearly half completed or under construction — have been announced since 2010, but almost half that investment went to the Gulf Coast.

With major shale formations nearby, Capito and Manchin, as well as co-sponsor Sen. Rob Portman (R-Ohio), want to see a local resource stay close to home, like with the proposed multibillion-dollar ethane cracker plant near Pittsburgh, which will produce polyethylene to make plastics (Greenwire, Aug. 30).

"We want to help the manufacturing and power and energy sectors in our states," Capito said, "And we want to start revitalizing our chemical industry, our plastics industry."

Manchin said it could be a "game-changer" for the Chemical Valley, the region surrounding Charleston, W.Va., where a once-thriving chemical manufacturing industry has faded.

Pollution concerns and economic impact

With that, though, come major pollution and safety concerns in a region still grappling with fallout from the 2014 Elk River chemical spill that left nearly 300,000 people without water for weeks.

"We would acknowledge that there have been some tragic accidents in the past, but we are an industry that is fully committed to continuous improvement," Dooley said.

To backstop the push for renewed manufacturing, ACC yesterday released a new report gauging the impact of building a natural gas liquid storage hub as well as a 500-mile pipeline distribution network and associated petrochemical and plastics infrastructure.

All told, the price tag would be about $10 billion, but ACC projected that spending would spur $35.8 billion in petrochemical, plastics and other investment.

That would translate, according to the report, into five ethane crackers and two propane dehydrogenation facilities.

Researchers also used the IMPLAN economic model employed by federal agencies and many private-sector companies to estimate the job and tax revenue impacts in West Virginia, Pennsylvania, Ohio and Kentucky.

According to the report, federal, state and local tax revenue would be nearly $3 billion a year and 100,000 permanent new jobs would be created by 2025. Most jobs would be in supplier industries or jobs tied to a local wage bounce, but 25,700 jobs would be in chemical and plastic manufacturing, where pay averages around $90,000 a year, according to ACC.

"There's not a better investment that the [states] could make," Manchin said, pushing for states to invest their own money.

Bill sponsors also want to see untapped Department of Energy Office of Fossil Energy loans used.

Chiming in at the news conference, Walter Howes, who ran DOE's loan program under former President George W. Bush, said the storage hub is a "bull's-eye" if the Trump administration doesn't do away with the loan guarantee program.

McKinley, whose district is the heart of West Virginia's booming natural gas industry, ribbed his Senate colleagues that the House has passed the bill twice already on its own. Capito said that the only reason the bill failed to pass last year was that it was attached to the Senate's ill-fated energy bill.

"In all likelihood it's going to be attached to some other vehicle," Capito said about this year's version.

"It really is irrelevant to us what vehicle."

McKinley, however, pointed to the infrastructure package being pushed by the Trump administration.

"When we talked to the president, he wants this trillion-dollar program, what a better fit," McKinley said.


By:  Dylan Brown
Source: E&E News