Secretary Thrasher removed from Commerce

From an Article by Brad McElhinny, WV MetroNews, June 19, 2018

CHARLESTON, W.Va. — Executives from China Energy who had been set to attend a petrochemical conference canceled their visit because of ongoing strain over trade, said Brian Anderson, director of the WVU Energy Institute.

Weeks ago, those involved with the potential $83 billion Chinese investment in West Virginia natural gas projects had hoped the executives would be able to make a specific project announcement during their visit, Anderson said.

“Backing up a couple months we really were hoping we could have a project to be announced on this visit. It wasn’t a cancellation of an announcement, but it’s not at the point a project can be announced with the leadership canceling their visit,” Anderson said today on MetroNews’ “Talkline.”

Anderson first described the cancellation of the visit by China Energy executives during his own presentation at the Northeast U.S. Petrochemical Construction Conference in Pittsburgh. His comments were picked up by trade journalists who were covering the conference.

The comments also set off a buzz among those in attendance, said Curtis Wilkerson, president of Orion Strategies, which performs communications and marketing services for West Virginia’s natural gas industry. Wilkerson is attending the conference.

“That’s probably the buzz that’s going on the most here,” Wilkerson said this morning. “People then questioning the total investment and how that’s going and what are the possibilities. They’re not exactly saying it’s not happening. They’re just raising questions.”

State officials made a splash last November by announcing the possibility of an $83 million investment in West Virginia over 20 years.

Then-Commerce Secretary Woody Thrasher traveled to China to sign a memorandum of understanding with China Energy while President Donald Trump looked on.

Gov. Jim Justice spoke with excitement about the sheer amount of the potential investment. “For crying out loud, it absolutely takes your breath,” Justice said.

But the investment has also been shrouded in mystery. State officials have been unwilling to release the memorandum of understanding, and they also said they could not elaborate on specifics of the projects, saying they would evolve over the 20-year span of the agreement.

The current tit-for-tat over tariffs lays more uncertainty onto the agreement. President Trump on Monday threatened to impose additional tariffs on $200 billion worth of Chinese goods. That followed last week’s announcement of a 25 percent tariff on $50 billion in Chinese imports.

Chinese officials accused the United States of “extreme pressure and blackmailing” and vowed to retaliate.

West Virginia’s deal with China Energy was hatched during President Trump’s trade mission to China, when the president was advocating for greater investment.

Last week, while being questioned about state Commerce Secretary Thrasher’s forced resignation, Justice said the deal would be safe because of the governor’s own good relationship with Trump.

“I can tell you just as simple as mud how it happened,” Justice said. “It happened through a friendship with myself and Donald Trump. Donald Trump realizes wholeheartedly that we have a terrible trade imbalance with China and he is on those people and on those people like stink on you-know what.

“And absolutely he is pushing them to invest and do things to bring that trade imbalance in line. So how does West Virginia come into being. I mean, do we really think it came into being with our Commerce department? Of course it didn’t. It came into being because of the relationship between the two of us and the president really trying to help his friend and help what he loves and he loves West Virginia. That’s how it came in line. Well, we haven’t lost one thread of that. We’ve still got a president, we’ve still got your trade imbalance and you’ve still got your governor.”

But the current situation has made moving forward with decisions a challenge, Anderson said. “It’s certainly not a road block. Right now it’s a bit of a speed bump. If it lasts too long it could certainly be a hurdle,” Andersons said on “Talkline.”

He said China Energy is continuing on due diligence such as project identification and site selection. But, because the company is partially state-run, its executives would find it difficult right now to give a project official approval or to appear at an American petrochemical conference.

“These issues surrounding the pending trade war are causing some concern among the leaders of China Energy,” he said.

“It has not slowed the development. The development teams are still pursuing the project. However, the timing of the leadership of China Energy and that coinciding with the trade war was going on was just not something the leadership of China Energy was going to do.”

Anderson believes the project still has great potential in the long-term. “I’m still optimistic. In the end, I think economics win out,” Anderson said. “West Virginia is still the right place on the globe for them to invest.”

Anne Blankenship, executive director of the West Virginia Oil and Natural Gas Association, hopes that’s true. “We’re obviously disappointed to hear that it’s been put on hold, I think is the most positive light to put on it,” Blankenship said this morning in a telephone interview.

She hopes that once international relations straighten out, the deal with China Energy will continue moving forward. “Clearly that’s what we would want,” she said. “Things will continue to progress but that large amount of investment money is the best case scenario to move forward. That is encouragement to private investors to come to the table as well, which all needs to happen as well.”

Time now to phase out fossil fuels and dangerous chemicals

From a Study of the Ohio Valley Environmental Council (OVEC), August 30, 2017

The nation’s largest petrochemical hub is located in southern Louisiana along the Mississippi River. This area is known as Cancer Alley, because its neighbors suffer very high illness rates.

This Gulf Coast region is increasingly beset with hurricanes, floods and other storms which endanger the reliability of chemical production there. Meanwhile, there’s been a recent increase in Gulf Coast export markets for natural gas liquids and the chemicals derived from them. So, industry and government are now planning to create a second major petrochemical region here in our Appalachian Ohio River Valley.

New petrochemical growth is also still planned for Louisiana. It seems that the biggest expected growth in U.S. oil fracking is in the Permian Shale, in Texas and Oklahoma; the oil and gas coming from there will go to Gulf Coast petrochemical areas.

But the biggest increase in fracking for natural gas (methane) and natural gas liquids is projected to come from Appalachia. According to a March 3, 2017 Shale Daily article, “The Appalachian Basin’s shale formations helped to birth the natural gas renaissance in North America, and the region now is poised to join the Gulf Coast as a major petrochemical hub.”

Central to these plans is the establishment of an Appalachian Storage Hub which would consist of underground storage facilities for natural gas liquids extracted from the Marcellus, Utica and Rogersville shales across West Virginia, Kentucky, Ohio, and Pennsylvania, as well as a vast network of new pipelines.

Petrochemicals have been stored underground for a long time, but not without some serious problems. For example, a salt deposit dug out for multiple underground storage caves for natural gas liquids and other chemicals became the site of a catastrophe that destroyed most of a small town in Louisiana in 2012. A drill bit pierced the side of one chemical storage cavern. Toxic chemicals oozed up and most of an entire community was forced to move out.

We also remember a more recent huge and long-lasting problem with leaking underground petrochemical storage in southern California.

As part of the Appalachian Storage Hub, one hundred million barrels of natural gas liquids would be stored in a to-be-built system of “underground caverns, salt caves and areas where natural gas has been extracted,” according to a January 23 Kallanish Energy article.

The Hub would transport natural gas liquids and their constituent chemicals by means of six big pipelines running 386 miles along the Ohio River from Monaca, PA to Catlettsburg, KY, right though the Huntington, WV area. Unless the plan is to blow up steep hills, there is nowhere these six mammoth pipelines could run other than virtually adjacent to the banks of the Ohio River, the source of drinking water for millions of people.

Monaca PA is where Royal Dutch Shell wants to build a multi-billion-dollar ethane cracker plant; Catlettsburg KY is where Marathon Petroleum has a refinery. A major expansion of Marathon Petroleum’s refinery is now underway. A 68-mile Hub pipeline spur would also go from Point Pleasant, WV to Charleston, WV. Also planned is an additional three thousand miles of smaller pipelines to transport chemicals to current and future industrial plants along a 454-mile corridor in the four states.

Read Part 2 here.