Energy Secretary Rick Perry backs building petrochemical hub in Appalachia
Aug 13, 2019, 6:19pm EDT
Secretary of Energy Rick Perry, left, and Environmental Protection Agency Administrator Andrew Wheeler speak Tuesday afternoon at the Shell Chemical plastics manufacturing plant under construction in Potter Township.
Secretary of Energy Rick Perry praised efforts to build a more robust petrochemical industry in the Pittsburgh region and the rest of Appalachia, saying a more robust “all of the above” energy strategy provided a big boost to the economy and national security.
Perry traveled to Potter Township with President Trump to visit Shell’s Pennsylvania Chemicals project, which is well under way in Beaver County and is employing more than 5,000 construction workers.
“I’m a big fan of the concept of developing an all-of-the-above energy strategy in the Appalachian region,” Perry said Tuesday afternoon.
He said that as governor of Texas and now in his new role, he’s worried about the impact of a large hurricane moving up the Houston ship channel where the petrochemical industry has been based since the end of World War II.
“This could have a devastating effect on the petrochemical industry in this nation, because so much of it is based in that region,” Perry said. “If we were to duplicate that here, not only is the economic impact stunning, the jobs that get created, but also this country would have a protection against a major natural disaster.”
Perry added: “Best as I can tell, you don’t have any hurricanes in the Appalachian valley.”
As energy secretary, Perry has a big influence in the types of projects that are built. One big-ticket item that is being contemplated in the tri-state region is the Appalachian Ethane Storage Hub, which would be a mass complex or a series of centers where natural gas liquids like ethane and propane would be deposited for later use. There’s been a move to build such a complex and a proposal for funding — the project would cost around $10 billion, in some estimates — is before the Energy Department.
Petrochemical plants, also known as crackers, similar to the one being built by Shell are being pursued throughout the Appalachian region. A second ethane cracker, this one built along the banks of the Ohio River in Belmont County, Ohio, is being considered by PTT Global Chemicals and Daelim. A third project, in West Virginia, recently lost its corporate backer.
The focus on Tuesday’s visit to Beaver County was entirely on the Shell plant, while up the road about five miles, two energy-related employers facing closure: The Bruce Mansfield coal-fired power plant that will close in about eight months, and the Beaver Valley Nuclear Power Station, which is threatened with closure by the same owners, FirstEnergy Solutions.
Perry said he was concerned about the fate of coal and nuclear power plants that are to be closed prematurely.
“Every other source of energy is interruptible, but not nuclear, not coal,” Perry said. “We need to have a good conversation in this country about coal.”
He didn’t address specific efforts to save Bruce Mansfield or Beaver Valley.
Perry praised the work of the National Energy Technology Laboratory (NETL) in South Park, where he had visited earlier in the day. He said NETL was working on many innovative projects, including small coal plants that have low to no emissions.
Perry and EPA Administrator Andrew Wheeler pushed back against claims that the Trump administration is rolling back clean-air and clean-energy regulations. Wheeler said that the new Affordable Clean Energy rule will reduce carbon dioxide emissions from the power plant sector by about 33 percent and that methane emissions have been cut by 15 percent since 2000 at the same time that natural gas and liquified natural gas production has doubled.
The difference, Wheeler said, was that the environmental reductions have been met at the same time the Trump administration has been focusing on jobs.
“We’ve grown our economy at the same time,” Wheeler said.
Paul J. Gough Reporter Pittsburgh Business Times
Ruling on wells helps boost 2018 impact fee collection
Jan 28, 2019, 1:37pm EST
This article reposted from the Pittsburgh Business Times
Marcellus Shale Gas Drilling Tower
The natural gas drilling impact fee is set to reach a record for 2018.
The Public Utility Commission’s pending collection of impact fees will be boosted this year by about $22.3 million by a state Supreme Court ruling over the status of a certain type of well that had been disputed by some natural gas drillers.
The recent ruling in the Snyder Bros. vs. Pennsylvania Public Utility Commission ruling adds so-called stripper wells to impact-fee collections. Stripper wells are oil and natural gas wells that are nearing the end of their operating life, and some drillers said they shouldn’t be counted for impact fees. That was settled earlier this month.
This contributed to what the Independent Fiscal Office estimates will be a new record for annual collections of $246.9 million for 2018 natural gas activity, up $37.4 million from 2017. Counties, municipalities and a housing fund will receive the most with $137.2 million, followed by $91.5 million for the Marcellus Legacy Fund, $10.5 million to state agencies and $7.7 million for conservation districts.
Beyond the contribution from delayed well payments, another $15.1 million was tied by the IFO from the 779 new wells spud in 2018.
“Pennsylvania’s tax on natural gas, the impact fee, is working as designed and an important revenue source for statewide environmental and conservation programs, as well as communities in all 67 counties,” said David Spigelmyer, president of the Marcellus Shale Coalition.
Revenues for the past five years from the impact fee:
2014: $223.5 million
2015: $187.7 million
2016: $173.2 million
2017: $209.5 million
2018: $246.97 million
Here’s the list of estimated payments by driller, according to the PUC earlier this month.
Paul J. Gough
Pittsburgh Business Times
This is a substantial report on the future of the Petrochemical Industry in the Tri-State area of Ohio, Pennsylvania, and West Virginia. This industry provides fantastic opportunities for economic growth in these three states. We must identify funding to make this happen.
How Shell plans to use rail and road to capitalize on opportunities in Beaver County
Nov 27, 2018, 1:43pm EST
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PAUL J. GOUGH
The quench tower almost completely in place around noon.
Shell Polymers — the division of Royal Dutch Shell (NYSE: RDS.A) that will market and ship the polyethylene from the company’s new plant in Beaver County — counts location and transportation opportunities as major competitive advantages over its competitors.
The bulk of the country’s petrochemical industry is based along the Gulf Coast, far away from the shale fields of Pennsylvania. But it’s also more expensive to ship the polyethylene, the building blocks of plastics products, to the customer base in the Midwest and Northeast.
That’s where the Shell plant offers reliably sourced polyethylene and a more nimble transportation infrastructure, said O. Chris Jackson, production unit manager for logistics at Shell Polymers. Jackson said the Shell plant will be within 700 miles of the customer base and will be connected not only by rail but also by road.
“That puts us closer to our customers,” Jackson said.
It means a shorter supply line but also, in the case of pipeline or railroad disruptions, it positions the polyethylene that comes out of Beaver County to be a quicker alternative than supply lines that depend on rail access. Jackson said customers said it could take between four and five weeks to secure a rail car, which forces petrochemical plants to curtail or shutdown production.
That’s where Shell’s new system works well. While the bulk of product transport will be by rail, Shell built 42 loading bays on the Potter Township site that will allow it to offer customers the ability to get the polyethylene by truck in only a day or two. That will allow Shell’s manufacturing customers to not be constrained by traditional supply delays, thanks to the location of the plant and the ability to ship by either road or rail.
“This kind of operation can flourish in this region,” Jackson said. Jackson spoke at the Tri-State Infrastructure Summit in Cranberry Township.
Shell has made significant investments in both rail and road, even moving a state highway that would have cut through the site of the plant.
Paul J. Gough
Pittsburgh Business Times