Should DOE’s Vision of an Ohio Valley CO2 Hub be DOA?

From the Blog of Sean O’Leary, Ohio River Valley Institute, 1/27/22

The Ohio River Valley Institute (ORVI) responds to a DOE request for information about carbon capture deployment.

Last year, a report titled, “Building to Net-Zero: A U.S. Policy Blueprint for Gigaton-Scale CO² Transport and Storage Infrastructure,” captured the imagination of the Biden administration and the US Department of Energy (DOE). The report envisions an energy system and manufacturing sector that can continue to rely heavily on fossil fuels because power plants and factories would be retrofitted with new technologies to capture their carbon emissions, which would then be transported through thousands of miles of pipelines to massive underground storage caverns.

The report is the product of a collaboration between the Energy Futures Initiative and the AFL-CIO, and it recommends the creation of three “CO2 Infrastructure Hubs” in Wyoming, along the Gulf Coast, and in the Ohio River Valley. The figure (image) above from “Building to Net-Zero: A U.S. Policy Blueprint for Gigaton-Scale CO² Transport and Storage Infrastructure”, Labor Energy Partnership, 2021.

The question is whether these hubs are effective and necessary solutions for the climate crisis or, as in the movie, a detour into financial and political opportunism that fails to solve the problem while inflicting immense financial and environmental costs. The Ohio Valley CO2 hub at least appears to be the latter. The Ohio River Valley Institute explained why that is the case in its response to a recent DOE request for information about the demonstration and deployment of carbon capture and sequestration (CCS) and direct air capture (DAC) technologies.

In its response, ORVI made three points, which it supported with research findings, to explain why the Ohio River Valley CO2 Hub is a fatally flawed vision.

1. Expanding or perpetuating Appalachian coal and natural gas activity, even if successful, will contribute little or nothing to job growth and prosperity in the region and may even be counterproductive.

2. Because fossil fuel resources do not contribute to increased prosperity and improved quality of life in host communities, any carbon management project DOE considers for funding must be justified purely on the basis of its market competitiveness and greenhouse gas reduction, which, given the technologies’ cost, precludes broad-based adoption in the electricity generating sector and narrows the viability window to niche applications and industries.

3. Because carbon management technology is viable in only niche applications and industries, massive infrastructure projects, such as region-wide pipeline networks and storage hubs for captured carbon and natural gas liquids, are not economically viable and cannot be cost-justified.

In support of these points ORVI cited the failure of recent fossil fuel expansion in Appalachia to deliver job growth despite investments in the hundreds of billions of dollars. We also pointed out that the incremental cost to retrofit coal and gas-fired power plants with CCS capabilities would be greater than the market value of the electricity they generate. That would make them either completely uncompetitive with clean, renewable resources or the wholesale price of electricity would more than double and potentially increase Americans’ utility bills by more than $100 billion per year.

Finally, pointing to the “Building to Net Zero” report’s observation that coal-fired power plants are responsible for over 90% of the region’s carbon emissions, ORVI’s response explained that, if implementing CCS isn’t financially viable in the electric generating sector, then any economic rationale for a massive pipeline and storage network that would cost tens if not hundreds of billions of dollars to construct collapses.

These findings make the viability window for proposed carbon capture and sequestration and related carbon management projects quite narrow. For that reason, ORVI encouraged the DOE’s Office of Fossil Energy and Carbon Management (FECM) to include in the range of carbon management technologies and projects it considers ones that are devoted to remediating the impacts of past and ongoing fossil fuel activities, which have long saddled the region. These burdens include hundreds of thousands of orphaned and abandoned mines, wells, and toxic waste sites the remediation of which would reduce greenhouse gas emissions, provide large numbers of jobs in areas that struggle most, encourage economic development, and enhance quality of life, making the region more attractive to both businesses and families.

Whether DOE will apply the kind of stern criteria for economic competitiveness and viability that ORVI recommends when considering proposed carbon management projects is at least doubtful. In December the federal Government Accountability Office (GAO), released a report that is highly critical of DOE’s past conduct in selecting and administering funding for carbon capture projects.

The GAO report found that, of eight coal carbon capture projects for which DOE provided $684 million in funding between 2010 and 2017, “Three projects were withdrawn—two prior to receiving funding—and one was built and entered operations, but halted operations in 2020 due to changing economic conditions.” Also, “DOE terminated funding agreements with the other four projects prior to construction.” In short, none of the power system carbon capture projects that DOE supported is alive today.

That’s in part because of a persistent failure to adequately take into account issues of market competitiveness and viability. But it’s also because of political pressure within the agency to waive standard project selection practices and bypass cost controls. The report makes multiple references to DOE “at the direction of senior leadership” failing to adhere to and enforce cost guidelines.

DOE will take a few months to process responses to its RFI and probably later this year will issue a request for proposals for projects that will be considered for funding.

View the full letter of Sean O’Leary here. >>>

https://ohiorivervalleyinstitute.org/wp-content/uploads/2022/01/DOE-RFI-Response.pdf

>>> Sean O’Leary, senior researcher, energy and petrochemicals, is a native of Wheeling, WV. He has written about coal, natural gas, and their role in the economies of Appalachia in a book, a newspaper column, and blog titled, “The State of My State”.

Mayors describe necessary plan for Middle America

Opinion of Mayors by William Peduto, Jamael Tito Brown, Nan Whaley, Andrew Ginther, John Cranley, Steve Williams, Ron Dulaney Jr. and Greg Fischer, Washington Post, November 22, 2020

The writers are the mayors of Pittsburgh; Youngstown, Ohio; Dayton, Ohio; Columbus, Ohio; Cincinnati; Huntington, W.Va.; Morgantown, W.Va.; and Louisville.

Every four years, voters in Pennsylvania, Ohio, West Virginia and Kentucky are told how important they are to American industry, but once the election is over, nothing happens. The United States now has a president-elect who comes from our region originally and is more likely to understand what we need to revive it. We, the mayors of eight cities, are banding together to demand real investment in our shared region, which has fueled the U.S. economy for generations yet never gets the attention it deserves.

It’s why we’re asking for an ambitious federal response to save our industries and communities from destruction: a Marshall Plan for Middle America.

In the post-World War II recovery period, the Marshall Plan was a $13 billion ($143 billion today) investment strategy to rebuild Europe and foster economic and democratic institutions. Like postwar Europe, Middle America faces similar issues of decline — a shared crisis of aging infrastructure, obsolescence of business and government institutions, and the need for upskilling and reskilling the workforce.

We have consulted economic experts about the challenges we face: growing and systemic inequities, a public health crisis and the burdens of climate change. Our shared ideas stem from what we’ve learned.

Virtually no major federal attention has been given to the greater Ohio River Valley since the adoption of the Appalachian Regional Commission in 1965. A new regional and federal collaboration can rebuild and reposition these regions to be economically competitive domestically and globally. Absent such a partnership, it is certain that difficult times will continue and the opportunity will be lost.

We’ve seen the consequences of inaction before. Pittsburgh, for example, never prepared for deindustrialization of heavy manufacturing and steel in the 1980s, and it took 30 years to build its new economy. It was a painful demonstration of how people and communities can be destroyed by believing the world will not change. Pittsburgh and other cities should not repeat this mistake.

Nonpartisan research led by the University of Pittsburgh’s Center for Sustainable Business finds that “the Ohio River Valley stands to lose 100,000 jobs as the fossil-fuel economy continues to decline in the face of superior, cost-competitive renewable energy development.” Without action, these jobs will be lost forever, and it will lead to even deeper despair for another generation.

According to our research, taking advantage of our community assets, geographic positioning and the strengths of our regional markets can help create over 400,000 jobs across the region by investing in renewable energy and energy efficiency upgrades to buildings, energy infrastructure and transportation assets.

Renewable sources of power are proving less expensive, and fossil fuel companies are increasingly dependent on federal subsidies to survive. Couldn’t these subsidies be strategically shifted to invest in a green economy that keeps these largely suburban and rural jobs but transitions them, with federal support, into new industries that will grow in the 21st century?

Like our friends at Reimagine Appalachia — a grass-roots community and environmental organization — we believe a Marshall Plan-scale reinvestment is necessary. Rather than a “Green New Deal,” our plan would seed long-term regional investments in Appalachia’s rural and suburban communities, while leveraging the technological successes of our tentpole cities to assist them. The same goes for our neighbors in the Ohio River Valley throughout the Rust Belt and up to the Great Lakes region.

Such cities are already working independently to meet the goals of the Paris climate agreement, adopting climate action plans like Pittsburgh’s, which aims to reduce greenhouse gas emissions by 50 percent by 2030 and 80 percent by 2050. Our cities are preparing for the new economy through additional but related initiatives, such as expanding digital access in Louisville and solar energy in Cincinnati. But we need help to leverage these successes.

To accomplish this, we calculate we’d need $60 billion per year over the next 10 years in the form of federal block grants to local governments, state utilization of tax credits and leveraging of lending programs and strategic equity investments to serve as both catalysts and guarantors of the innovation required to regenerate our communities. Add local delivery systems in construction, local government procurement and an able workforce, and a chemistry for success can be realized.

Gen. George C. Marshall was born in Uniontown, Pa., the county seat of Fayette County. Many people in our parts of Appalachia and the Ohio River Valley still take great pride that our industry helped propel the post-World War II economic boom in our country, which in turn gave us the resources to invest in postwar Europe. By emphasizing these deeply significant ties to our history, we can do for ourselves what we did for the free world.

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Appalachian Regional Commission — Grants and Contracts

ARC uses Congressionally appropriated funds to invest in the Region’s economic and community development through grants. In Fiscal Year 2020, Congress appropriated a record $175 million for the Appalachian Regional Commission. As part of our unique federal-state partnership, ARC’s grant application process begins at the state government level. All ARC grants align with the investment priorities outlined in our current Strategic Plan and reflect state plans and strategies.

ARC also issues specific Requests for Proposals for research and evaluation contracts on topics directly impacting economic development in the Appalachian Region.

Some work is underway at the Shell Cracker in spite of COVID -19

From an Article by Chrissy Suttles, Ellwood City Ledger, April 15, 2020

Some work is underway at Shell Chemicals’ $6 billion ethane cracker plant in Potter Township, Beaver County, Pennsylvania in the Ohio River valley.

Shell has no plans to fully restart production during the COVID-19 crisis, but an additional 200 employees will return gradually over the next week to join the roughly 300 workers already tasked with repairing and maintaining the facility. More could be called back in the coming weeks.

At least 500 Shell Chemicals workers will be back at Beaver County’s ethane cracker plant by next week, company representatives said Wednesday.

Shell has no plans to fully restart production during the COVID-19 crisis, but spokesman Michael Marr said an additional 200 employees will return gradually over the next week to join the roughly 300 workers already tasked with repairing and maintaining the petrochemical complex. More could return in the coming weeks.

“We anticipate reintroducing more workers to the site at a measured pace so we can integrate limited personnel onsite while maintaining social distancing guidelines,” Marr said. “Next week, we anticipate having approximately 500 workers onsite, which, for now, is the number we believe we need to do the critical repair, preserve and maintain work. We will be reviewing our staffing numbers week by week.”

On March 18, Shell temporarily suspended construction activities at Potter Township’s ethane cracker plant to mitigate the spread of COVID-19 amid public pressure. Union officials said on Wednesday that two employees have since tested positive for COVID-19 and were told to self-isolate.

The plant’s closure came two days ahead of Gov. Tom Wolf’s order to stop all non-life-sustaining businesses, including most construction activities. Shell’s construction company later applied for a waiver to resume some work during the shutdown, asking the state to allow up to 800 workers back for limited construction activities.

Staff at Pennsylvania’s Department of Community and Economic Development, which reviews waiver requests, said Shell applied for an exemption to continue as a cogeneration power plant. Utility operations are considered essential under Wolf’s order, and the site’s pending gas-powered electricity plant makes it an eligible utility.

Shell will operate in compliance with social distancing and other mitigation measures established by federal and state officials, Marr said, noting the majority of the company’s 8,500 workers will remain furloughed for the duration of the shutdown.

Employees will park within the site itself to avoid the use of busing, eliminating a key challenge to social distancing guidelines. Other protocols in place include temperature screenings and lunchroom spacing, Marr said.

A number of Shell Chemicals workers, local residents and elected officials demanded the company temporarily cease cracker plant construction in mid-March, with employees reporting a variety of health hazards.

Beaver County Commissioners called for the plant’s closure early on. At last week’s commissioners meeting, Chairman Dan Camp said he and his colleagues received multiple calls from concerned Shell workers who didn’t understand why they were being called back following the shutdown.

“A lot of the employees don’t know what to do,” he said. “They don’t know if they should be going back to work or not, or if the governor gave (Shell) a waiver.”

Marr said Shell management plans to update local and state leaders at “appropriate intervals” moving forward.

Commissioners on Wednesday varied in their response to the news. Camp called it a “loophole,” and said protecting Beaver County’s health care system should be a top priority.

“We are starting to see the COVID-19 peak here in Beaver County, and we have to make sure our health care system can accommodate what will happen,” he said. “Even if they’re able to follow CDC guidelines on site, what they take back to their families and communities may not be what’s best for their health.”

Commissioner Jack Manning disagreed with Camp, arguing a few hundred additional workers are unlikely to overwhelm the region’s hospitals. He feels comfortable with the protocols Shell has put in place to protect Beaver County from further COVID-19 exposure, and said those jobs are precious at a time when Pennsylvania is seeing unprecedented levels of unemployment.

“Five hundred people coming back to the area could be what keeps a few small businesses afloat,” he said. “Most of our small businesses could barely go two weeks, let alone two or three months, with a fraction of what they need as income.”

Doctors say major construction projects like the cracker plant make nearby communities more susceptible to the virus due to a large number of transient workers, but Manning said he’s been assured many of the workers returning are permanent residents.

“They’ve told us in the past that these folks returning are local, and they are not bringing a ton of people across state lines,” Manning said. “There might be some Ohio or West Virginia people, but for the most part it’s regional people from the union halls who have relocated here permanently.”

Commissioner Tony Amadio said he’s concerned about how the move could affect public health and safety, but it’s ultimately up to the state — not commissioners — to make those decisions. “Workers who don’t want to return are not penalized for it,” he said. “It’s voluntary.”

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See also: Car protest rally puts focus on Sunoco pipeline work during pandemic, Daily Local News, Chester County, Penna., April 23, 2020

After Gov. Wolf ordered that all non-life sustaining work across the state was to be halted, the pipeline builder was given permission to continue digging at several locations through waivers granted by the Pennsylvania Department of Community and Economic Development.

Market Headwinds Buffet Appalachia’s Future as a Center for Petrochemicals

From an Article by James Bruggers, Inside Climate News, March 21, 2020

A Wealth of Financial Problems

The headwinds began blowing in Appalachia last year, when the Braskem and Odebrecht companies ended their plans to construct an ethane cracking plant in West Virginia.

Tens of billions of dollars in petrochemical investment from China, announced in 2017, never materialized. (The West Virginia state government seems fixated on “pie in the sky.” DGN)

And a company seeking to secure $1.9 billion in federal loan guarantees to construct massive underground storage for ethane, promoted as essential to support a petrochemical bonanza along the Ohio River, ran into Congressional opposition. The money would come from a fund that has primarily been used to back wind power, solar and other types of clean energy.

Plastics: From the Gas Well to Your Home

The company, Appalachia Development Group, announced more than a year ago that it had been invited by the Trump administration to submit a second phase of an application for the money. Steven Hedrick, the chief executive officer of the Appalachian Development Group, said this week that he’s still working to complete the application.

And while Pennsylvania lawmakers last month passed a bill that could deliver hundreds of millions of dollars of tax breaks to new plastics, petrochemical or fertilizer plants that use Pennsylvania natural gas as a feedstock, Gov. Tom Wolf has said he would veto the bill.

Suddenly, however, local factors such as tax incentives and financing issues have been dwarfed by the coronavirus pandemic, which, along with Saudi Arabia’s oil price war with Russia, have sent the crude market plummeting to levels not seen in nearly two decades.

That makes Appalachia’s ethane, though still cheap, less competitive as a basic building block of plastics, compared to naphtha — a petroleum product found in other regions whose price falls along with oil.

The Economics Have Never Looked Worse

IHS Markit had removed the proposed $5.7 billion ethane plant in Belmont County, Ohio, from its long-range plastics supply forecast even before the coronavirus pandemic seized the global economy. The project is a collaboration between Thailand’s PTT Global Chemical America and South Korea’s Daelim Industrial.

There has been an oversupply of polyethylene, the product the Ohio plant would make. And IHS sees that overage continuing for at least three more years. Plastics demand will continue to rise, but at a slower rate.

Coronovirus will take its own, additional bite out of global plastics demand. The economics that would support approval of a final investment decision of the (Ohio) project are less compelling today than they have been the entire time it has been under consideration.

Twice since June 2018, Moody’s bond credit rating business, which is used by investors to decide where to put their money, raised doubts about the project. Most recently, in mid-February, Moody’s predicted that PTT Global Chemical this year would “not embark on any new capacity expansion plan until margins improve on a sustained basis.”

In Ohio, the state’s private economic development corporation —JobsOhio — remains optimistic. It has invested nearly $70 million in the project, including for site cleanup and preparation, saying thousands of jobs are in the offing. The companies have obtained their environmental permits. A final investment decision is still expected to be announced by summer, Dan Williamson, a project spokesman said, declining further comment.

But market conditions do not bode particularly well for the venture. Plastics prices today are much lower than what they were from 2010 to 2013, when the Ohio project was being planned, said Tom Sanzillo, director of finance for the Institute for Energy Economics and Financial Analysis. He added that future prices are also projected to be weak.

PTT Global Chemical’s profits were down 60 percent last year, and they’ll have a lot of competition in the United States, he said.

The region’s gas exploration and production companies are also teetering on a financial cliff. They were burdened by debt even as they continued to boost production in 2019. “Taken together, there are a lot of red flags,” said Sanzillo.

Financial Uncertainty Hangs Over Shell—and the Region

All the financial and economic factors at play with regard to the proposed Ohio ethane plant also weigh on the region’s one actual facility, a multi-billion plastics manufacturing plant being built by Shell Polymers in Beaver County, Pennsylvania, 25 miles north of Pittsburgh.

Shell this week temporarily halted construction after some workers and public officials raised concerns about unsafe practices related to the coronavirus.

The project’s future may also be uncertain, said Beckman, the University of Pittsburgh chemical engineering professor. If demand for polyethylene stays strong in China, Shell “may come out OK,” he said.

But that may not happen, and to a big oil company like Shell, “five to six billion bucks in not the end of the world if you have to write that off,” Beckman said.

Shale gas exploration and production companies in the Appalachian Basin were teetering on a financial cliff, even before the coronavirus pandemic’s economic fallout.

A Shell spokesman, Ray Fisher, said Shell does not see “the current price environment” affecting plans at its Beaver County plant. “We take a long-term view of the demand for the products that will come from this site,” he said.

Whatever Shell’s future, the region’s shale deposits are not limitless, said Andrew R. Thomas, the executive in residence at Cleveland State University’s Energy Policy Center.

Natural gas production from the Marcellus and Utica shales has a lifespan of 30 years—possibly 50, if gas wells can be fracked a second time, said Thomas, who has worked in the energy industry as a lawyer and geophysicist,

Losing even 10 years could mean “we lose the opportunity to develop our own petrochemical region,” he said, adding that a recession would frustrate “any investment opportunities.”

In Belmont County, Ohio, Larry Merry, an economic development official, agreed that these are “uncertain times,” a considerable understatement, given the coronavirus’s rapid spread across the nation. But he said that petrochemical firms are “thinking long term—not just about the next couple of months, or even just the next couple of years. So I remain very optimistic.”

Three (3) States’ Natural Gas Boom

Even if multiple ethane cracking plants are never constructed, the region will still be grappling with environmental and health concerns from thousands of fracking sites. And the region could continue to produce natural gas and pipe it elsewhere, said Matthew Mehalik, executive director of Pittsburgh’s Breathe Project, a collaboration of some 40 organizations working to improve air quality and fight climate change.

Long before Shell began construction on its ethane plant outside Pittsburgh, nearby residents and doctors had been alarmed by air pollution from fracking and natural gas processing.

They’ve called for answers on why there has been a surge in Ewing sarcoma, a rare childhood cancer, in a four-county area outside Pittsburgh.

“The health risks and environmental costs never made any sense,” said Mehalik. Now, the economics aren’t making any sense, he said.

There is tremendous uncertainty, including how far state or federal governments are willing to go to prop up the shale gas and plastics manufacturing industries, he said.

“The expansion of natural gas 10 to 15 years ago was made with a different mode of thinking and different market conditions,” Mehalik said. “It’s time for a rethinking, and a rethinking on this opens up prospects for a different economic development vision.”

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See also: Health & Economic Impacts of Cracker Plants 3/24/20

Come and learn from Matt Mehalik, PhD, Executive Director of the Pittsburgh-based Breathe Collaborative, as he talks about the health impacts and economics of cracker plants and the oil and gas industry. This is information that has been gathered through researching the impact that the Shell cracker plant (about 20 miles west of Pittsburgh) would have on the community. Matt brings his expertise to the Ohio Valley to educate people on the truth behind what the PTTG cracker could do to our area if it is built. He also looks at what this plant would do to short and long term economics of the region.

We will connect as a community over what CORR is doing in the Valley to protect the public and what others can do as well. We have plenty of volunteer needs in our effort to educate, inform, and empower communities.

Come and fill out our anonymous community health survey. This helps CORR gather important info. on the health and other concerns folks might have about the cracker plant.

DETAILS: Date: March 24th 2020; Time: 6:00 PM – 7:00 PM

Place: 50 East 39th St. Shadyside, Ohio 43947

Organizer: Concerned Ohio River Residents (CORR)

Note potential hub locations encircled in red

Letter submitted by Eric Engle to Parkersburg News & Sentinal, October 20, 2019

An October 2nd editorial, “Storage Hub: Legislation should be a priority,” states West Virginia’s congressional delegation should continue making the Appalachian Storage Hub a top priority and supports recent legislation from West Virginia’s U.S. House of Representatives delegation to direct the Appalachian Regional Commission to provide funding to aid in creation of the Hub. This is dangerous nonsense for several reasons.

First off, the editorial itself mentions a reason why the storage hub shouldn’t be built anywhere: “having about 95 percent of U.S. ethylene production on the Gulf Coast is risky business.” Why does the writer think that is? Well, maybe it has something to do with the increased intensity of hurricane and precipitation events in the Gulf of Mexico caused by anthropogenic global climate change.

Warmer air holds more moisture and warmer ocean surfaces provide energy to increase hurricane intensity. This is well-documented climate and atmospheric science. Why does this matter for the hub? Because the storage hub plays a huge part in the continued extraction and use of fossil fuels, contributing to the climate crisis. Methane, for example, is released at every stage of oil and gas development and use, even use for the petrochemicals industry, and methane is 86 times more efficient a heat-trapping greenhouse gas over a 20-year period than carbon dioxide.

Then there is the storage of natural gas liquids. The proposed hub involves storage of these liquids (i.e. butane, ethane) in underground caverns around and even under the Ohio River. These liquids are highly combustible, for one, and the Ohio River is a drinking water source for 5 million people and already the most contaminated waterway in the country for the last 7 years running. Do we really want these highly combustible liquids stored under or near our already highly contaminated river and transported via pipelines to cracker plants up and down the Ohio River Valley?

And who really benefits from all of this liquid natural gas (LNG) production? The people of West Virginia? That MOU from China we’re not allowed to see for $84 billion might clarify, but I’m highly skeptical that the value-added benefits go to the people of our state. Our state’s history with extraction industries would suggest otherwise.

Finally, in case you haven’t noticed, we’re a world drowning in plastics that we cannot safely dispose of. The storage hub is not about energy production, as the editorialist obviously knows, it’s about the production of more plastics and polymers. No matter how you spin the industry-provided jobs and revenue numbers, that plastic will end up in our oceans and other waterways and landfills and, well, everywhere (microplastics have been found in the deepest depths of the oceans and the most remote corners of the Arctic).

Can we completely do away with plastics tomorrow? No. But 40 percent of the plastics market consists of single-use plastics we can do away with and engineering biodegradable plastics substitutes is the kind of thing Appalachian Regional Commission funds ought to go toward, not a massive increase in plastics production.

We need to say no to the Appalachian Storage Hub! For vital information on the hub and other oil, gas and petrochemicals issues, visit the Ohio Valley Environmental Coalition website at ohvec.org.

>>> Eric Engle, Parkersburg, WV

Ethane would be pumped underground to likely spread and disappear

Virtually no regulations to protect the public !!!

From an Article by Sharon Kelly, DeSmog Blog, April 12, 2019

This week, at an industry conference focused on wooing petrochemical producers to West Virginia, officials from the state and federal government made clear their support for continuing fracked shale gas extraction and petrochemical industry development near the natural gas-rich Marcellus Shale.

Why should petrochemical companies build in West Virginia, Pennsylvania, and Ohio? For one thing, don’t expect regulation of shale gas drilling, Michael Graney, executive director of the West Virginia Development Office, predicted in his presentation.

“Contrasted to other U.S. regions, Tri-State region is industry-supportive and industry-friendly,” read a slide that Graney, who was appointed by West Virginia Governor Jim Justice in September 2018, presented to the conference. “Virtually no risk of drilling restrictions.”

Graney also elicited “hallelujahs” from the crowd after describing West Virginia’s low worker turnover rates. “We have earned an A from the Cato Institute in fiscal policies,” he told representatives from fossil fuel and petrochemical companies, referring to a libertarian think tank that Sourcewatch describes as “founded by Charles G. Koch and funded by the Koch brothers.”

‘Everything within the government’s power’

Shell is already building a massive plastic manufacturing plant reliant on fracked-gas feedstocks known as an “ethane cracker,” in Pennsylvania. Credit: Sharon Kelly, DeSmog

At the ninth annual West Virginia Manufacturers Association’s Marcellus and Manufacturing Development Conference, officials from the U.S. Department of Energy (DOE) offered the petrochemical industry the services of the federal government.

“And what we’re going to do is everything within the government’s power to shine a bright light on this and help get this over the finish line,” Steven Winberg, the Department of Energy’s Assistant Secretary for Fossil Energy, told the conference. “With regard to DOE, there’s a couple of things that we can do. One is, private sector investors can take advantage of the DOE’s loan guarantee program.”

“We can walk you through that process, the loan guarantee process that the DOE has,” he continued.

Second, the Department of Energy hired a full-time staffer to push for petrochemical projects, according to Winberg, a former vice president for the coal and natural gas producer CONSOL Energy. “Secretary Perry gave me instructions to get somebody on board full time to work on behalf of the federal government to make this happen. And that somebody is Ken Humphreys.”

“I want to put a name with a face — so this is your guy here,” Winberg said, asking Humphreys to stand. “It is his job to do whatever the federal government can to help make this a reality.”

Humphreys served from 2010 to 2016 as the CEO of the FutureGen Industrial Alliance, which represented a group of nine coal and power companies, including CONSOL Energy, which were seeking Department of Energy funding for a carbon capture project, according to SourceWatch.

That project left behind a troubled history before its ultimate cancellation. In 2005, the DOE predicted FutureGen would be a “prototype of the fossil-fueled power plant of the future.” In 2008, the DOE announced the project would be re-structured amid cost over-runs.

In 2009, a House of Representatives subcommittee report examined the project’s viability. “DOE was extremely reluctant to produce documents to the Committee so that it could determine exactly how decisions were made concerning FutureGen,” that report found. “In retrospect, FutureGen appears to have been nothing more than a public relations ploy for Bush Administration officials to make it appear to the public and the world that the United States was doing something to address global warming despite its refusal to ratify the Kyoto Protocol.”

However, the project was modified and revived, with $1 billion in federal stimulus funding promised — then canceled entirely in 2015, after remaining behind schedule and over-budget.

National Energy Technology Laboratory Chief — With a Petrochemical Past

Winberg was not the only DOE official offering the services of the federal government to the industry at this conference. Brian Anderson was appointed in November to run the National Energy Technology Laboratory (NETL), part of the Energy Department.

Anderson, as DeSmog previously reported, had been “listed as one of the principals” by Appalachia Development Group, which has sought to develop an underground storage site for natural gas liquids, the raw materials from gas wells that can be used by petrochemical manufacturers.

“Since he became the director at NETL, which falls under the Department of Energy umbrella, Anderson said he’s severed all connections with Appalachia Development Group,” the Pittsburgh Post-Gazette reported on November 27, 2018.

In January, Anderson had been slated to speak at the West Virginia Energy Infrastructure Summit. DeSmog reporter Steve Horn raised questions about potential conflicts of interest, given Anderson’s role at Appalachia Development Group.

“The Department follows all federal laws and ethics requirements regarding onboarding new employees,” a DOE spokesperson told DeSmog. “The employee in question has been counseled regarding recusal from matters relating to past employers.” Anderson never spoke at that conference.

At this week’s conference, Anderson’s presentation focused on the support that his new federal office could provide for the fossil fuel industry — and for the region’s petrochemical industry in particular.

“Effectively the question is, what is the Marcellus going to do for us in manufacturing in this region?” Anderson told the audience of industry representatives. “And so, within that big question is what can NETL do within this region, as a partner in manufacturing?”

“We manage a $6.6 billion research portfolio across the U.S. and globe,” he added, describing various NETL “research projects to ensure that fossil energy can stay competitive as well as meet some of those emissions goals of our country and the globe.”

Anderson emphasized that even though petrochemical projects produce goods, not energy, supporting the industry through research fell within NETL’s Congressional mandate. “And so, the Department of Energy, one of our missions — within our mission — is to use our natural resources, our energy natural resources responsibly,” Anderson told the conference. “And it’s a responsible use of the natural gas liquids resource not to burn it, but to use it for building and manufacturing.”

A slide from Anderson’s presentation for NETL, titled “Energizing Regional Innovation Through Partnerships,” displayed logos from the Appalachia Storage and Trading Hub, a project planned by Appalachia Development Group, and from MATRIC, an owner of the Appalachian Development Group.

Taking the Federal Government’s Help

Appalachia Development Group — Anderson’s former firm — has been making strides toward obtaining loan guarantees from the DOE, Joe Bozada, a company executive, told the conference, including a loan guarantee roughly twice the size of the $1 billion DOE support offered to the FutureGen project.

“So, that’s a $1.9 billion loan guarantee,” Bozada told the conference. “We successfully completed that part one, and we’ve been invited to participate in part two,” of the DOE’s process.

“In the past 18 months, we’ve actually completed a lot of work,” he said. “One was getting the application to the loan permit office, that was very, very tough to do. And many folks in the room were actually part of that, so thank you for that.”

While company representatives spoke of the importance of federal assistance, the state’s political representatives expressed their support — and also decried the notion that the government should play favorites.

“We can’t allow the federal government to pick winners and losers when it comes to our energy policy,” Senator Joe Manchin said in a video recorded for the conference, “and we certainly can’t have them demonizing the resources that have powered this nation for decades. Coal and natural gas is a big part of that.”​

Meanwhile, outside the conference, Ohio Valley Environmental Coalition Project Coordinator Dustin White spoke to a rally organized in opposition to the petrochemical industry’s plans for the region, The Dominion Post reported. “They scream jobs and like a carrot on a stick, and politicians chase them,” White said.

“The [Appalachian Storage Hub] scheme is an unimaginative regression to 1950s era economic development,” White said in a statement. “Why can’t we have real innovation?”

“It is of upmost importance that people see these current and proposed petrochemical projects in Appalachia for what they are: a scheme that the oil and gas companies are using to bail themselves out of debt,” said Bridgeport, Ohio, resident, Bev Reed, who also attended the rally and lives near the site of a proposed plastic factory. “The tide needs to shift to alternatives to plastic, rather than creating more.”

Main image: A slide from a presentation by West Virginia official Michael Graney, who listed “virtually no risk of drilling restrictions” as a reason to bring fracked-gas reliant petrochemical development to the region. Credit: Sharon Kelly, DeSmog

Upcoming Belmont Co. cracker plant/petrochemical hub informational meeting

LOCATION: Moundsville Public Library, Tuesday, February 26th @ 6 PM

From: Bev Reed, FaCTOV OhioValley — (reed.b1@yahoo.com)

Hello to Friends & Concerned Citizens:

Please join local Ohio Valley residents, the Sierra Club, FreshWater Accountability Project, and the Ohio Valley Environmental Coalition for an informational meeting pertaining to the potential Belmont County cracker plant/petrochemical hub on Tuesday, February 26th at 6pm at the Moundsville public library.

A few nonprofits are appealing [1] the PTTG air permit that was approved by the Ohio EPA. The permit was extremely deficient and is not adequately protective of human health and the environment.

There will be an attorney present who is involved with the appeal to answer questions and talk about some of the deficiencies. The purpose is to inform the public about the planned projects and potential hazards, talk about what can be done about it, and also to show solidarity as we continue to resist these projects.

Please share this announcement with others. Above is the flyer for the event, as well as the deficiencies of the permit. There are a plethora of reasons why this plant and the potential build-out from it will negatively impact the entire region, and also the planet as a whole. These will be discussed at the meeting.

Please let me know if you have any questions.

>> Thank you, Bev Reed — Faith Communities Together (FaCT-OV) — A voice in the Ohio Valley promoting responsible stewardship of the land, air and water. ( fact.ov.group@gmail.com )

[1] Environmental Groups Challenge Key Permit for Ohio Petrochemical Plant | Sierra Club, https://www.sierraclub.org/press-releases/2019/01/environmental-groups-challenge-key-permit-for-ohio-petrochemical-plant

Environmental Groups Appeal PTT Global Chemical Permit for Proposed Cracker in Belmont County

From an Article by Jennifer Compston-Strough, Wheeling Intelligencer, January 21, 2019

COLUMBUS, Ohio — A national environmental group and three partner organizations are challenging the state’s decision to issue an air permit-to-install for a proposed petrochemical complex in Belmont County.

The Sierra Club and its partners filed an appeal Friday with the Environmental Review Appeals Commission seeking to have the permit issued on Dec. 21 vacated. If it is not overturned, the permit will allow Thailand-based PTT Global Chemical and its partner, Daelim Industrial Co. LLC of South Korea, to build an ethane cracker plant that is projected to process 1.5 million tons of ethane from the local natural gas stream annually.

Cracker plants use ethane to create ethylene, a component of plastics and chemicals such as antifreeze, solvents and cleaners, as well as many consumer products including textiles, adhesives and paints. Ethane is an abundant part of the natural gas stream found in the Utica and Marcellus shales that underlie much of Eastern Ohio and parts of West Virginia and Pennsylvania.

Proponents of the facility say it would bring thousands of construction jobs and hundreds of permanent positions to the Ohio Valley and would attract additional related industry to the region.

PTT and Daelim have invested millions of dollars in design work and planning, and to buy property at the proposed site at Dilles Bottom. However, they still have not committed to building the project, which could cost as much as $10 billion.

Opponents — such as the Sierra Club and its appeal partners the Center for Biological Diversity, Earthworks and the Freshwater Accountability Project along with some local residents – believe the plant would cause air and water pollution that would endanger the surrounding environment, public health and the overall climate. They say it would emit harmful amounts of particulate matter and dangerous chemicals, including benzene, nitrogen oxides, volatile organic compounds, carbon dioxide and other greenhouse gases.

In the appeal, the groups cite several “assignments of error” as reasons for the commission to vacate the permit. They state that Ohio EPA Director Craig Butler based issuance of the permit on a “fatally flawed” air dispersion model that does not reliably establish whether the facility will violate state and national air quality standards for multiple pollutants. The appeal also states the Ohio EPA failed to utilize certain data properly, ignored short-term peak emissions, failed to properly account for VOCs that would be emitted by flares and thermal oxidizers at the facility, and approved monitoring requirements that are insufficient to assure reasonable compliance with permit limits.

They believe the permit as issued requires inadequate frequency of stack testing and other monitoring procedures. They also say the permit’s limitations and standards lack the specificity necessary to be enforceable.

The Sierra Club and its partners said the Ohio EPA ignored testimony from dozens of concerned citizens at a public hearing on the permit that was conducted at Shadyside High School on Nov. 27. Representatives of the Sierra Club and other similar organizations were on hand for that hearing, along with about 100 other area residents and representatives of local government and organized labor. Some of those present did testify about environmental concerns linked to the project, but others supported the plan to build the plant.

“Communities shouldn’t be forced to breathe toxic, polluted air just to prop up fracked gas and petrochemical companies,” Sierra Club Beyond Dirty Fuels Campaign Director Kelly Martin said in a news release Friday. “This plant, and the broader effort to build out a petrochemical hub in this area, would be a danger to clean air, public health, and our climate. The health and safety of Ohioans and those who live downstream on the Ohio River are worth more than fossil fuel industry profits.”

Lea Harper, managing director of Freshwater Accountability Project, agreed. “The Ohio EPA’s rubber stamp of the cracker plant air permit shows a total disregard for expert input and concerns of the local residents,” she said. “We are dismayed that there is not more regulatory oversight of such a toxic polluter in the Ohio River Valley.”

Lauren Packard, staff attorney at the Center for Biological Diversity, echoed their thoughts. “These plants will contaminate Ohio River Valley communities just to create more plastic pollution,” she said. “We need to keep fossil fuels in the ground instead finding wasteful new uses for them. Industry’s plans to increase plastic production will worsen climate change and the ocean plastic crisis at the expense of Ohioans.”

According to Ohio EPA, the plant would use six ethane cracking furnaces and manufacture ethylene, high-density polyethylene and linear low-density polyethylene, which are used in plastics and chemical manufacturing. As a result of this process, carbon monoxide, nitrogen oxide, volatile organic compounds, particulate matter and greenhouse gases are expected to be emitted from the plant, but Ohio EPA said it determined those pollutants would not exceed acceptable levels as defined by state and federal laws.

Ohio EPA also said its agents considered all comments received before making a final decision on the permit. The final permit and the Response to Comments document are available online at epa.ohio.gov/dapc/newpermits/issued.

Dan Williamson, spokesman for PTTGC America, declined to comment on the appeal, saying it is a legal matter. He previously lauded the issuance of the permit, saying it was an important step in the companies’ decision-making process.

The Environmental Review Appeals Commission has statewide jurisdiction to hear and resolve appeals of decisions by the directors of the Ohio EPA, the Ohio Department of Agriculture, the State Fire Marshal, the State Emergency Response Commission and county and local boards of health. Decisions of the commission can be appealed to the Franklin County Court of Appeals or to the court of appeals for the district in which a violation is alleged to have occurred. The commission meets every Tuesday, Wednesday and Thursday for consideration and review of documents filed. Preliminary prehearing conferences are generally scheduled within 30-40 days after an appeal is filed.

Powhatan Point is in the Ohio Valley opposite Marshall County, WV

From a News Report by D.K. Wright, WTRF News 7, February 15, 2018

UPDATE: XTO Energy will be bringing in a well control team from Texas after a “loss of containment” resulting in a gas well fire Thursday morning in Powhatan, OH.

Officials reportedly went door to door to residents and businesses within a two-mile radius suggesting that they evacuate. Evacuations are voluntary at this time, not mandatory. They are using an abundance of caution during this time.

According to Karen Matusic, XTO Public Relations, said that they hate that this happened to the community, but they are appreciative of the community being so welcoming.

Officials are in the process of setting up a claims line for everyone affected. 7News will keep you updated once that number is released. Officials are also setting up hotel rooms for those that need them.

Matusic said that there was no estimated time for residents to be allowed back at their homes.

XTO Energy is working with local county and state law enforcement to secure the roads. At this time, State Route 148 in Powhatan is closed.

ODNR has released a statement about the incident:

“ODNR was notified at 9:38 a.m. of a potential incident on a XTO Energy well pad outside of Powhatan Point in Belmont County. ODNR, OhioEPA, and local authorities are all on scene working to mitigate the situation. The well is currently on fire and the local authorities have evacuated a one-mile radius.”

“A well control company will be onsite soon and will work to get the well under control. At this time, no injuries have been reported and we’ll continue to monitor the situation from onsite.”

State Representative Jack Cera is on the scene, because he wants to make sure all of the people living in the area are being taken care of properly.

Ethane cracker chemical complex in planning for Ohio Valley

From a Pulse Item by Choi Jae-won and Choi Mira, Maeil Business News (Korea), January 30, 2018

Daelim Industrial Co., a South Korean construction and petrochemical company, will put up about $131 million to establish a petrochemical complex in Ohio, the United States, in partnership with Thailand’s largest petrochemical and refining firm PTT Global Chemical (PTTGC).

The company announced in a disclosure that it plans to sign an investment agreement with PTTGC’s U.S. subsidiary PTTGC America to construct and jointly operate an ethane cracking center (ECC) that discomposes ethane to produce ethylene and a polyethylene plant. It said it would invest up to 140 billion won ($130.7 million) in the joint project. Details of the plan including the size of investment and stake share will be worked out by the end of this year.

Ohio is home to shale gas reserves and rich in ethane. Its geographic proximity to the U.S. eastern region that takes up 70 percent of the country’s polyethylene market also could save logistics cost.

Once operation begins four to five years later, the complex will produce 1.5 million tons of ethylene and polyethylene a year.

Shares of Daelim Industrial are publicly traded in Seoul (South Korea).

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See also the reports on Plastics and Toxic Chemicals at “Living on Earth” (loe.org)