Risks are great for leaks, fires, explosions, and adverse health effects

From an Article by Kathiann M. Kowalski, The Conversation, May 31, 2019

A proposed petrochemical feedstock hub could expand markets for natural gas liquids in Ohio, Pennsylvania, West Virginia and Kentucky. Several environmental groups are considering legal options if the Trump administration approves $1.9 billion taxpayer-backed loan guarantee.

A development corporation is seeking a $1.9 billion federal loan guarantee to help build an Appalachian storage hub for natural gas liquids. The financing guarantee would come from a U.S. Department of Energy program meant to support projects that “avoid, reduce, or sequester” air pollutants or greenhouse gas emissions and feature “new or significantly improved technologies.”

The Title XVII program has never been used to finance a fossil fuel storage project, but environmental groups fear the Trump administration will bend criteria to approve the project.

“It just does not fit the legal criteria” of the federal law, said Alison Grass, research director at Washington, D.C.-based Food & Water Watch, one of several environmental groups that is considering legal options.

The proposal from Appalachia Development Group, LLC, calls for an underground storage facility to hold natural gas liquids from “wet gas,” such as ethane, which are used to make plastics and other products.

The storage facility’s site in Ohio, West Virginia or Pennsylvania hasn’t been finalized. The hub would have a web of pipelines and other infrastructure to collect and distribute feedstocks from all three states, plus possibly Kentucky.

Not on the list

Steve Hedrick, CEO of Appalachia Development Group, said the project would “significantly” reduce emissions by minimizing the distances the liquids are transported before they are turned into plastic products.

“With over half of the North American plastics converter market within 500 miles of Appalachia, the need for redundant transport is minimized while maximizing the value creation from the American resource,” Hedrick said via email. “In other words, we can significantly avoid or reduce anthropogenic emission of greenhouse gases merely through conversion of these raw materials closer to their production locations.”

Hedrick did not offer a source or calculations of the amount of presumed emissions cuts resulting from transporting materials over fewer miles.

The Title XVII statute lists ten categories of projects that can qualify for loan guarantees under the federal program. They include renewable energy systems, hydrogen fuel cell technologies, electric vehicle plants, and energy efficiency projects. Advanced nuclear facilities can also qualify, as well as some refineries for processing crude oil into gasoline. The bill even allows loan guarantees for certain pollution control equipment and advanced fossil fuel technology, such as coal gasification that would achieve specific emission reductions.

Missing from the itemized list are facilities to store and distribute hydrocarbon feedstocks from fossil fuels.

That’s not for lack of trying. Sens. Joe Manchin, D-W.Va., Sherrod Brown, D-Ohio, and Shelley Moore Capito, R-W.Va., introduced a bill in 2017 to add a facility like the Appalachian storage hub to the list. The bill did not pass.

However, the Department of Energy invited Appalachia Development Group to submit the second phase of the loan application last year while the bill was pending. It had already approved the first part of the company’s application. The department did not respond to an email and follow-up phone call seeking comments for this article.

The DOE has not yet made a final decision on the Part II application. Approval can take anywhere from roughly six months to two years, Hedrick said. He noted that the application itself is considered confidential business information.

Bipartisan support: Ohio and WV Senators Apparently Approve

Industry interests have wanted the underground storage facility and associated pipelines for several years now. One apparent aim is to increase the market and revenue for the region’s natural gas and its co-products.

Prices for natural gas from the Marcellus and Utica plays have been relatively low in recent years. A lack of infrastructure has made it hard to get it out of the region into markets where it can command higher prices. A similar lack of infrastructure has also suppressed profits from ethane, propane, butane and other liquid gas products.

Supporters also hope the storage hub would attract more chemical companies to the region to use ethane and various natural gas liquids as feedstocks for plastics and other chemicals, which could then be used by other manufacturers.

A natural gas liquids storage hub in Appalachia “would be an economic driver for the region, would expand energy infrastructure, and would increase our domestic production of the petrochemical resources we rely on,” Manchin said last month when he introduced another bill relating to the hub. It calls for a federal study on the project’s potential benefits “to national and economic security.”

“The Trump Administration would also support an Appalachia hub to strengthen our energy and manufacturing security by increasing our geographic production diversity,” Energy Secretary Rick Perry said in December. His comment came with the release of a Department of Energy report, saying the hub would satisfy market needs and yield billions of dollars in economic and other benefits.

Along the same lines, President Donald Trump’s April 10 executive order on energy infrastructure calls for the DOE to prepare a report on the proposed hub, “describing opportunities, through the Federal Government or otherwise, to promote economic growth of the Appalachian region, including growth of petrochemical and other industries.”

‘Short-sighted’ Economic Development Plan

That’s a “short-sighted economic development plan,” countered Climate & Energy Program Director Mitch Jones at Food & Water Watch’s Baltimore office. “They’re rushing here to replace the coal industry with another fossil fuel industry.”

Scientists say there’s a growing urgency to curb fossil fuels to avoid some of the worst impacts of climate change. Recent reports also call for cutting down on single-use plastics, which are linked to ocean and freshwater pollution, Jones said. Appalachia would be better off focusing on the renewable energy industry, he said.

Critics also say the project could lead to a net increase in greenhouse gas emissions by boosting natural gas production in the region. “If anything, it’s going to result in a dramatic uptick in drilling and likely flaring and other emissions upstream if this thing comes online,” said Ted Auch, Great Lakes program coordinator for FracTracker Alliance.

Critics also question the propriety of having U.S. taxpayers guarantee a loan for a project that will have significant funding from Chinese investors. “I have no idea why our government would issue loan guarantees to facilitate foreign investments for product that is intended to prop up the faltering fracking industry, as well as to be shipped overseas,” said Leatra Harper, managing director for the FreshWater Accountability Project.

What’s next?

So far, the House Appropriations Committee has not added a requested budget bill provision to stop the Department of Energy from spending money to process the loan guarantee application or to grant it.

Food & Water Watch, FreshWater Accountability Project, FracTracker and dozens of other organizations requested that provision on May 7. The request could be renewed once the budget bill gets to the House floor.

Advocates are also considering other legal options if a provision isn’t in the budget bill or if the department nonetheless goes ahead and grants the loan guarantee, Jones said.

It’s conceivable that the project could still move ahead even if the loan guarantee were not granted. But it’s unclear whether that would happen.

“One would think that if the investment were as smart an investment as they’re arguing that it is, they would be able to get the loan without a federal loan guarantee, certainly,” Jones said. “What we’re seeing is the belief that this federal loan guarantee is the key that they need to secure the outside funding that they need to move forward.”

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See Also: Plastics Industry on Track to Burn Through 14% of World’s Remaining Carbon Budget: New Report, Sharon Kelly, DeSmogBlog, May 15, 2019

The plastics industry plays a major — and growing — role in climate change, according to a report published today by the Center for International Environmental Law (CIEL).

By 2050, making and disposing of plastics could be responsible for a cumulative 56 gigatons of carbon, the report found, up to 14 percent of the world’s remaining carbon budget.

In 2019, the plastics industry is on track to release as much greenhouse gas pollution as 189 new coal-fired power plants running year-round, the report found — and the industry plans to expand so rapidly that by 2030, it will create 1.34 gigatons of climate-changing emissions a year, equal to 295 coal plants.

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