Ohio Leaders Shown $2.2 Billion Gas Plant

CADIZ – Ohio lost its first bid for an ethane cracker plant to Pennsylvania. Sen. Rob Portman wants to make sure that doesn’t happen again.

Portman, R-Ohio, toured MarkWest Energy’s $2.2 billion Cadiz natural gas processing operation Wednesday, where company officials told him they have a desperate need for a local ethane cracker. Portman hopes Denver-based MarkWest and other natural gas producers and processors will keep growing their operations so that building a multibillion-dollar ethane cracker becomes feasible in eastern Ohio.

“The alternative of not producing this oil and gas would be a missed opportunity,” Portman said during the tour. “This encourages manufacturing to come back to Ohio.”

Portman was the featured speaker Wednesday during the Ohio Mid-Eastern Governments Association meeting, at which Greg Sullivan, area manager for MarkWest, also spoke. The agenda consisted of speeches by Portman and Sullivan, followed by a tour of the massive MarkWest site, near Cadiz between Ohio 9 and U.S. 22.

The Ohio Mid-Eastern Governments Association consists of local, state and federal government officials working together to achieve common goals.

Others leaders participating Wednesday included Ohio Sen. Lou Gentile, D-Steubenville; Ohio Repa. Jack Cera, D-Bellaire, and Andy Thompson, R-Marietta; Cadiz village and Harrison County officials; as well as representatives for Gov. John Kasich; Lt. Gov. Mary Taylor; Rep. Bill Johnson, R-Ohio; and Sen. Sherrod Brown, D-Ohio.

On summer recess from the Senate, Portman said when he went to Guernsey County to turkey hunt earlier this year, he had a hard time finding a hotel room because so many are booked by oil and natural gas workers. Even though he is glad to see hotels and restaurants doing well because of the influx of out-of-state workers, Portman said he would much rather see more jobs going to Ohio residents.

“We’ve got to have a trained work force. In this state, we are competing with Indiana and we are competing with India,” he said, noting he supports community college programs that teach people how to work in the oil and gas industry.

Regarding the drilling process, Portman emphasized there are no confirmed reports of natural gas fracking leading to groundwater contamination. He also believes the U.S. Environmental Protection Agency should allow state regulators to handle most aspects of the oil and gas industry.

“Our topography, our geology, is very different than in the Bakken” Shale in North Dakota, he said. “If Washington does not get in the way, we can have a tremendous job creator.”

In terms of creating jobs, Sullivan said MarkWest is employing several thousand construction workers on a regular basis as it grows in Ohio, West Virginia and Pennsylvania. During the Wednesday tour, he reminded attendees the Cadiz facility, though operational, is still very much in the expansion process.

At Cadiz, methane and ethane are removed from the gas stream. The propane, butane, isobutane and other, heavier natural gas liquids flow via pipeline from Cadiz to MarkWest’s Hopedale fractionator for further separation.

“What comes out of the ground right now is not a usable product. It needs to be processed,” Sullivan said.

The Cadiz complex will soon include two de-ethanizers, which will remove ethane from the gas stream. Currently, the company has three options for its ethane: send it to Canada for cracking via the Mariner West Sunoco pipeline; send it to the Gulf Coast for cracking via the ATEX Express pipeline; or send it to the Gulf Coast for cracking over the Bluegrass Pipeline.

“Ethane is anywhere from 14 percent to 16 percent of our gas stream. We need to find some place to go with it, preferably locally,” said Sullivan.

For months in 2011 and early 2012, officials in Ohio and West Virginia worked to secure an ethane cracker. Royal Dutch Shell eventually settled on the Monaca, Pa. site along the Ohio River, but the global oil giant has yet to acquire the property for the planned cracker from the Horsehead Corp.

“An outlet for ethane is our big challenge,” Sullivan said.

The $2.2 billion MarkWest investment is part of a growing list of huge infrastructure investments in the Utica and Marcellus shale fields. These include: the $4.5 billion by Williams Partners in Marshall County; the $1.5 billion Blue Racer Midstream joint venture between Dominion Resources and Caiman Energy, which features the Natrium plant along the Ohio River; and the $900 million M3 Midstream complex in Kensington, Ohio.

These investments total more than $9 billion.