By Maribeth Anderson
Most West Virginians are familiar with Marcellus Shale, the underground energy powerhouse that lies beneath the northern part of the state. This rock formation, located between 5,000 and 7,000 feet beneath parts of New York, Pennsylvania, Ohio and West Virginia, contains enough natural gas to run the country for more than 20 years. The bounty of the Marcellus, however, provides much more than just a stream of gas.
Many wells produce more than natural methane gas, which is the primary component in natural gas. Wet gas is a mixture of methane, propane, butane, ethane and a handful of other organic compounds and is often one of the products of drilling in Northern West Virginia. These constituents are far more than simple by-products and are separated from the methane during the fracturing process. Ethane, in particular, is a valuable resource and is a major compound coming from the wet gas in the north. In fact, the tract of Marcellus Shale that runs from Wood County, WV to Butler County, PA is saturated with ethane.
Ethane, in order to be commercially usable, must be cracked into its constituent parts. The organic compound known as ethylene is the common goal of the process, which can be accomplished using either thermal or steam cracking. Once cracked, the ethylene oxide is a commercially viable material that serves as feedstock in the downstream manufacturing of products ranging from clothing to antifreeze. Most ethylene is processed into polyethylene, the most commonly used plastic in the world.
With so much of this valuable compound produced in Northern West Virginia, the state is in a unique position. Typically, ethane is shipped to plants in the Gulf of Mexico region or north to Canada where it can be turned into ethylene. This means that once the ethane is separated, it leaves the state with a price tag worth only the market value of a barrel of ethane. Constructing a local means of cracking ethane into ethylene would drastically change that fact. Building a feedstock watering hole in West Virginia would entice manufacturers to settle here, changing the outgoing ethane shipments into valuable commercial products before they cross state lines, and that’s after new industries and the support companies that service them have staffed their local floors.
The fact is that West Virginia has been involved in this business before. There were once 14 working ethane crackers east of the Mississippi with six being located in the Kanawha Valley. From the early 20th century, West Virginia was a heavy hitter in the chemical industry, supporting the efforts of companies like Belle Alkali, Westvaco, DuPont, Bayer and Union Carbide. After World War II ended, the products manufactured in the state spilled into commercial uses and the industry outgrew us, moving to more favorable locations—locations where petroleum feedstock was more plentiful. Now, with a massively abundant supply of ethane below our own soil, a supply drawn from the Earth by the hands of West Virginians, we can start to reclaim our stake in ethane and invite those industries back into the hills.
Building a new cracker isn’t cheap, and it won’t pop up overnight. West Virginia legislators see this, too, and demonstrated insight in passing the 2011 Marcellus Development Act to incentivize this construction. With an average price tag of $2 billion for a world-class cracker, a new facility is a sizeable investment that can take up to four years from start to finish before it produces its first barrel of ethylene. But, as with most large ventures, the payoffs are incredible.
Cracker construction alone can utilize more than 1,000 employees and opens up between 100 and 300 high-paying, skilled jobs after the facility is complete. This is the tip of the iceberg: once a functioning ethane cracker is in place and producing, the supply begins to work its economic magic, drawing downstream processing and manufacturing companies to the state. As each industry settles near the ethane derivative source, economically beneficial conditions develop and a vast network of support business can bloom, hiring new employees, producing new products and services and paying state tax dollars. In addition, a third layer of industries must grow to meet demands on retail and housing markets as the local work force expands. State revenue would be correlative to this growth spurt, adding multiple billions of dollars to economic worth.
To better measure the effects and logistics of re-introducing ethane crackers to West Virginia, a special group has come together under one banner. Established in February by Governor Earl Ray Tomblin, the Marcellus to Manufacturing Task Force is designed to research the benefits of inviting ethane cracking back into the state and develop a plan to attract new companies and use existing infrastructure, such as pipelines and storage, to accommodate cracking facilities. Made up of government cabinet members, chemical and natural gas industry representatives and officials from trade, transportation and environmental groups, the task force reports semi-annually on its findings.
Despite the addition of the task force and advocacy from industry groups, attracting a cracker is going to have to be a wide effort. The state is already providing incentives, various industries are drafting research and logistics and groups from around the state are pricking up their ears, listening to the sound of what’s to come. Putting a value on a cracker in West Virginia is nearly impossible and not for lack of numbers: the economic benefits of cracking locally are so incredibly numerous, crunching a few digits could not begin to do them justice. Cracking would make the Mountain State, the home of old salt mines, coal shafts and sundry industry, the source of another powerful commodity—an opportunity that can bring billions of dollars in revenue and provide thousands of much-needed, well-paying jobs. The opportunity is not waiting around for us; it’s here and it’s ready to move. The question is: are we going seize it?
