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‘Cracker’ Options Are Limited

July 27, 2013
By MIKE MYER , The Intelligencer / Wheeling News-Register

"So, other than that, Mrs. Lincoln, how was the play?" The sarcastic line, sometimes a reaction to a person with a long list of misfortunes, comes to mind when I hear talk about West Virginia landing an ethane "cracker" plant.

Why? Because other than a plentiful supply of natural gas to provide ethane for a cracker, the chips seem to be stacked against us.

Members of the Wheeling Rotary Club had as their guest speaker this week Bob Orndorff, an official of Dominion, the big energy company that just built a natural gas fractionation plant at Natrium, in Marshall County.

It is a massive undertaking, processing about 200 million cubic feet of gas a day. The plant produces about 36,000 barrels of natural gas liquids a day.

And, it turns out enough ethane to supply "a world-class cracker" plant, Orndorff noted.

So that means someone will be eager to construct a cracker near the Dominion plant? Nope. Not enough flat land is available there, Orndorff told the Rotarians.

He also said he receives inquiries frequently from companies interested in building a cracker plant in West Virginia. A site at an old DuPont chemical plant at Washington, W.Va., continues to get attention.

At one time, we in the Northern Panhandle and East Ohio had high hopes Shell could be convinced to build a cracker here. But in early March 2012, the company said it was more interested in a site at Monaca, Pa.

State officials continue to be optimistic at least one cracker will be built in West Virginia, however.

Orndorff mentioned two obstacles, in addition to the difficulty of finding a site large enough for a cracker.

West Virginia's tax structure is one concern, he said. Availability of the necessary workforce (as many as 10,000 for construction and 400 to operate the plant) is another.

What can government do about those challenges?

Obviously, Gov. Earl Ray Tomblin and legislators should take a look at specific areas of the tax code that are of concern to the gas and chemical industries. Still, we probably can't match what some expect: Pennsylvania has offered Shell tax incentives worth about $1 billion over 25 years.

Land is even more tricky, in a way. They don't call us the Mountain State for nothing. Coming up with a big piece of flat ground (the Monaca plan involves 300 acres) is difficult in most regions of the state. Convincing owners of such tracts to part with it at a reasonable price can be even more difficult. Perhaps there, local and state governments - through tax incentives for property owners, perhaps? - can be of help.

Workforce is a different story. It wouldn't be difficult to find and/or train 400 men and women to operate a cracker. But what about the 10,000 construction workers? Where do they come from - and just as important, where do they find housing while they're building the plant?

That's a tough nut to crack. Nowhere in West Virginia or East Ohio has the housing infrastructure to match an urban area such as Pittsburgh, where some of the Monaca construction workers could be hired.

There's another workforce issue - one with which Orndorff is familiar, though he didn't bring it up during the Rotary meeting. During construction at Natrium, Dominion was criticized - sometimes with pickets at the site - for not hiring more local workers. Company officials did what they could, but they were limited in how much they could say to Chicago Bridge and Iron, the subcontractor responsible for construction at Natrium.

No firm's executives relish the thought of an adversarial relationship with unions. Don't look for politicians to risk getting their own fingers burned by intervening in that regard.

The bottom line, then, is that there isn't a heck of a lot state officials can do to increase the chances of bringing a major cracker plant to West Virginia. That makes it all the more important for them to identify what they can do, and make it a priority.

Myer can be reached at mmyer@theintelligencer.net.

 
 

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