Kasich Solidly Behind Gas Industry’s Future

STEUBENVILLE – Gov. John Kasich didn’t flinch when natural gas opponents disrupted his State of the State address Tuesday – he just kept talking about the 740 jobs MarkWest Energy’s $500 million processing plants are expected to bring to the area.

While Kasich did not speak much of the multibillion-dollar Royal Dutch Shell ethane cracker – for which he flew to Texas in November to “make a personal pitch” for the state to gain the plant – officials in his administration said after the speech they remain confident the state is in a prime position to land the planned cracker.

More than 100 anti-fracking protesters greeted the Ohio State legislators and invited guests entering the Steubenville High School/Wells Academy Elementary School complex Tuesday, equipped with an array of signs. The protesters chanted phrases like “No frack – Ohio” and “We are the 99 percent – and so are you.”

A few of the protesters made their way into the balcony section of the auditorium during Kasich’s speech. Though the governor spoke for nearly an hour on a variety of topics with no interruptions, as soon as Kasich began speaking about natural gas topics, the protesters took action. After they shouted phrases like, “John Kasich is selling out Ohio,” and “We are the people,” state troopers escorted the protesters out of the building.

During the commotion, Kasich acknowledged Denver, Colo.-based MarkWest for its plans to build two new processing complexes in Harrison and Monroe counties. The Harrison complex will include 200 million cubic feet of processing capacity per day – and is expected to begin initial operations in mid-2013. The Monroe County facility is also expected to begin operation next year. The work in Ohio is anticipated to create about 700 construction-related jobs and more than 40 full-time, long-term positions with MarkWest, company information notes.

Companies such as Chesapeake Energy, Chevron or XTO Energy are known in the industry as a “producers” because these companies sell the gas they pump out of the ground. Because the “wet” Marcellus and Utica shale gas requires processing before it can go to market, producers send their gas to companies such as Dominion Resources, Caiman Energy or MarkWest for processing and fractionating.

Kasich said that major gas drillers are responsible, noting he would not allow an irresponsible “yayhoo” to ruin the industry’s reputation, though he was not more specific.

Industry officials note Ohio’s share of the Utica Shale may contain as many as 5.5 billion barrels of oil, which may ultimately help the state create 204,000 new jobs.

“I don’t want foreigners from West Virginia, Indiana or Oklahoma working on our well heads. We want Ohioans working on our well heads,” he said.

Jason Wilson, director of Kasich’s Office of Appalachia, and Christiane Schmenk, director of the Ohio Department of Development, remain confident the state is in a solid position to attract the Shell ethane cracker – despite Kasich only mentioning the project in passing as the protesters were interrupting him.

Wilson and Schmenk both believe eastern Ohio is a strong possibility to receive the cracker, which Shell officials plan to announce by the end of March. Some believe areas along the Ohio River in Jefferson or Belmont counties may be a good fit for the plant.

“Ohio has a good chance – we have worked hard to meet Shell’s needs,” said Schmenk. “We should know more by March.”

“The question is now in the hands of Shell,” added Wilson. “Ohio is putting its best foot forward. Having the State of the State speech in eastern Ohio should send a message to Shell that Ohio is committed to this part of the state.”

The ethane is produced when processing plants, such as the MarkWest projects, strip the ethane, butane, propane and pentane away from the methane. This ethane can then be “cracked” to form ethylene, the basis of the plastic industry. State officials recognize the manufacturing opportunities that would accompany such ethylene availability.