This article originally provided by The Charleston Gazette

May 5, 2011

Task force eyes ethane 'cracker' plant

By Paul J. Nyden

CHARLESTON, W.Va. -- The Governor's Marcellus-to-Manufacturing Task Force held its first meeting on Wednesday, and participants turned their sights to the potential for locating an ethane "cracker" plant in the state, which could lead to thousands of jobs.

State Secretary of Commerce Keith Burdette, a former state Senate president, said an ethane cracking plant would cost $1.5 billion, but would create more than 6,300 jobs once it began operating.

"It would also regenerate the chemical and plastics industries. It would be a great long-term value," Burdette said.

The Marcellus Shale is one of the largest deposits of natural gas in the world.

After the meeting, Burdette expressed concerns that gas produced in West Virginia should also be processed here.

"A pipeline [transporting gas] to Louisiana scares me. Our energy resources have typically been shipped elsewhere to create wealth," he said.

When natural gas is extracted from the ground, it has several components, including ethane, butane and propane.

"When you send ethane into a cracking unit," explained Affiliated Construction Trades Foundation director Steve White, "it comes out as ethylene, a feedstock for the chemical and plastics industries.

"Chemical companies buy a lot of that product. A company like M&G Polymers, in Apple Grove on the Ohio River, could be one major customer," said White, a member of the task force.

"There is an opportunity to use ethylene for building industry here. That is what the task force is about. If West Virginia is going to put up with the extraction of natural gas, we should enjoy its economic benefits," he said.

Senate President Earl Ray Tomblin, acting as governor, created the task force. He has not yet created a task force to examine the regulatory aspects and environmental impacts of drilling for Marcellus Shale.

Critics warn that hydrofracking -- using water to fracture rocks deep underground to free gas deposits -- will damage underground water supplies and contaminate streams and rivers.

Don Garvin, who represents the environmental community on the new task force, said, "I strongly feel we need to address the regulatory framework for Marcellus Shale drilling. The Legislature did not succeed in passing any legislation. Is that outside the purview of this group?"

Kurt Dettinger, Tomblin's general counsel, said the task force that met Wednesday will focus on job creation and reinvigorating industries.

He said the task force wants to identify companies seeking to invest in the expanding industry, creating pipelines to transport gas to consumers and attracting a company to build an ethane cracker in the state.

"West Virginia is not the only state seeking an ethane cracker," Dettinger said. "The abundance of shale gas we have is an attraction.

"We will have significant production for decades. We already have an extensive pipeline system in West Virginia and significant chemical and industrial plants in the Kanawha Valley and Northern Panhandle."

Marcellus Shale reserves lie under the entire state, but are especially concentrated in the northern counties.

During the meeting at the West Virginia Technology Park in South Charleston, the task force created four subcommittees focusing on: production, processing and storage; transportation; chemical manufacturing; and economic development.

Members of the new task force include top executives from energy and chemical companies, including: Michael John from Northeast Natural Energy based in Charleston; Steve Perdue from EQT Corp. based in Pittsburgh; Scott Rotruck from Chesapeake Energy based in Oklahoma City; Jim Crews from NiSource based in Merrillville, Ind.; Jack Lafield from Caiman Energy based in Dallas; Bob Orndorff from Dominion based in Richmond, Va.; and Greg Babe from Bayer, which has offices in South Charleston.

Reach Paul J. Nyden at pjny...@wvagzette.com or 304-348-5164.