Appalachian Petrochemical Plant Forges Ahead

A “secret” petrochemical hub being planned in the Appalachians could change the region for the better… or the worse.

The Ohio River Valley, the proposed route for the Appalachian Storage and Trading Hub. (Image courtesy of Wikimedia Commons.)

The Ohio River Valley, the proposed route for the Appalachian Storage and Trading Hub. (Image courtesy of Wikimedia Commons.)

The Appalachian Storage and Trading Hub (ASTH) is poised to become one of the biggest infrastructure projects in Appalachia. The planned petrochemical project, which has been estimated to cost around $10 billion, has attracted billions of dollars in investments from both Chinese and American companies.

Enthusiasts, from local government officials to petrochemical executives, say that the project will be the key to prosperity in the region and U.S. energy independence. Its critics, a loose coalition of researchers, environmentalists and concerned locals, say that the project will create few new jobs, and could cause disastrous environmental consequences.

But most outside of the region (and the field) haven’t even heard of the project. “They’ve been working on this for ten years with support from both the West Virginia and Ohio governments,” said Cheryl Johncox, a Sierra Club organizer, in a recent article for Blue Ridge Outdoors. “Despite this, it hasn’t been on the radar for most citizens or even many large environmental organizations.”

So, what is the ASTH? How would it work? And what impacts could it have on the region, and the country, as a whole?

The Background

Appalachia is a region in the Central-Eastern United States that is centered on the Appalachian Mountains. Natural gas companies have recently started looking at the area as an alternative to the Gulf Coast, the current hydrocarbon hub in the continental U.S.

The rock under the Appalachians is rich in natural gas liquids like ethane and propane, hydrocarbons that can be made into fuel or the precursors of plastics. According to the U.S. Energy Information Administration, the area’s Marcellus, Utica and Rogersville shale deposits have supplied two-thirds of the boom in U.S. natural gas production since 2012.

The high-value rock isn’t the only thing the region has going for it: the location is also convenient. Most of the manufacturers using ethane polymers in the continental U.S. are located in the Northeast, and 70 percent of them are within 700 miles of Pittsburgh, Pa. Being located so close to these manufacturers would make delivery faster, and less expensive. Additionally, Appalachia is safe from the hurricanes that batter the Gulf Coast, which have been growing stronger and more damaging in the last few years due to climate change.

All those factors make Appalachia a profitable place to mine: A recent IHS Markit report found that an ethylene project in the Appalachians would net its owners almost four times the earnings of a project located on the Gulf Coast.

The Hub

The expected location for the ASTH is along the border of West Virginia and Ohio, through the Ohio River Valley. The hub is being planned by the Appalachia Development Group (ADG), which calls itself a “collaborative platform” owned by the Mid-Atlantic Technology, Research and Innovation Center (MATRIC) and the West Virginia University Innovation Corporation.

The ASTH would include underground storage locations for natural gas, as well as monitoring equipment and hundreds of miles of pipeline. Natural gas producers would store gas in the hub, and consumers would buy it, while an independent third party would monitor the system for leaks or problems. If built, the ASTH will be one of the largest infrastructure projects ever built in the region.

A map of the proposed route for the ASTH pipeline, with ethylene and propylene facilities marked along the route. (Image courtesy of the Appalachia Development Group.)

A map of the proposed route for the ASTH pipeline, with ethylene and propylene facilities marked along the route. (Image courtesy of the Appalachia Development Group.)

The hub’s design would draw inspiration from a preexisting hub in Mont Belvieu, TX., a city located near the Gulf Coast that has 35 storage caverns capable of holding billions of barrels of natural gas liquids.

The ASTH’s underground storage will be housed in what will reportedly be impermeable salt domes under the Ohio River. A salt dome is a structure made by removing the salt from a large salt deposit. To achieve this, companies drill a well down into the deposit, pump in fresh water to dissolve the salt, and then pump the brine back out. Hollowing the salt deposit out creates a cavern that can be up to 1,200 feet tall and can be filled with natural gas. Pressure in the underground storage structure can keep the gasses liquid. While the location of the ASTH’s storage units haven’t been chosen yet, the Ohio River has plenty of salt deposits that could be hollowed out to create such storage structures.

The pipeline would stretch approximately 386 miles, from Monaca, Pa.,to Catlettsburg, Ky. Along the way, there would be supplementary pipelines running from storage areas and to factories. The pipeline would run above ground and would likely have a “six-pack” of pipe, with one pipe each designated for carrying methane, ethane, ethylene, propane, propylene and chlorine.

The ADG hasn’t started building its hub yet, as it is waiting on a $1.9 billion loan from the U.S. Department of Energy (DOE) to develop infrastructure in the area. In September 2017, ADG submitted its application, which was since approved for beginning the second phase in January 2019.

The Impact

Why would the U.S. federal government be willing to put so much money into the development of this petrochemical hub? Because it is counting on the project bringing further investment to the area.

According to the American Chemistry Council, the development of the ASTH would create as much as $36 billion in “follow-on petrochemical investments.” What that means is that if there’s a facility for storing and transporting natural gasses, then gas-mining and processing companies may be drawn to the area.

If the hub is built, it would be storing natural gas from projects like the Pennsylvania Shell ethane cracker plant. Ethane cracking is a process where ethane gas is broken down into smaller ethylene molecules under tremendous heat. Afterwards, the ethylene molecules are polymerized (linked) to form polyethylene, which is the first step in most of the world’s plastics.

A rendering of  Shell’s proposed petrochemical plant in Pennsylvania. (Image courtesy of the Pennsylvania Department of Community and Economic Development.)

A rendering of Shell’s proposed petrochemical plant in Pennsylvania. (Image courtesy of the Pennsylvania Department of Community and Economic Development.)

Shell’s plant, set to open in late 2021 or early 2022, will be one of the area’s first large-scale ethane crackers. But it likely won’t be the last. Local governments have focused on attracting outside ethane crackers. Indeed, the Pennsylvania, Ohio and West Virginia governments entered into a tax competition for Shell’s cracker, competing to see which state could provide the company with the greatest incentives for building the plant in their state.

But not everybody is as enthused at the possibility of a storage hub, or at the idea of more resource extraction from outside of Appalachia.

The Controversy

To understand the controversy over the ASTH, you need to appreciate the last hundred years of Appalachian history.

Since the early 1900s, the Appalachian coal trade has extracted billions of pounds of fuel from the region’s mountains, especially in Central Appalachia. But the wealth made from that coal hasn’t stayed in the area: poverty and unemployment rates are significantly higher in the region compared to the national average. Instead, the money has gone to powerful landowners who live in different areas. “For well over a century now, Central Appalachia has been ruled by absentee landowners only interested in making the highest profit available from natural resource extraction, primarily coal,” said researcher Theresa L. Burris in a 2014 article on poverty in the Appalachians.

Unfortunately, the environmental consequences of coal mining have remained rooted in the region. Appalachia residents have suffered serious health consequences from mining, especially when mountaintop removal (MTR) became the industry standard. People living near MTR developments have higher poverty and death rates, and have experienced a significant increase in problems like cardiovascular disease, lung cancer and birth defects.

So, when looking at the new petrochemical project, some Appalachians are asking what makes the project’s managers any different from the coal barons who left them with environmental costs and little benefit to show from it.

Government officials and petrochemical representatives certainly appear to believe that the hub could benefit Appalachians. In a press release in January 2018, ADG said that the project could lead to the creation of 100,000 jobs, both from construction and maintenance jobs within the hub itself and jobs with the ethane plants that may be drawn to the area.

“This project will not only transform the region, it will impact the entire country by enhancing America’s energy dominance,” said West Virginia Representative David McKinley of the announcement. “The storage hub has the potential to create thousands of jobs, attract billions in investment, invigorate Appalachia’s economy, and establish our area as a force in the petrochemical industry.”

Unfortunately, there’s also a serious potential for environmental costs, both from the hub and the accompanying petrochemical plants.

The first problem is with the salt domes that would be used to store the LNGs. Salt domes aren’t foolproof. If a dome doesn’t have adequate interior pressure, the empty dome could collapse in on itself. For residents, the worst-case scenario would be something like the Bayou Corne Sinkhole, which opened in Assumption Parish, La., in 2012. The sinkhole was created by the collapse of a salt dome, after the company that owned the dome ignored an unsatisfactory pressure test. Oil and gas began escaping to the surface, creating a 2.5-acre sinkhole that continues to shoot out oil and debris. Years later, hundreds of residents are still on an evacuation warning, as the sinkhole hasn’t settled. 

Another potential problem is the possibility of petrochemical leakage from the hub, and from the factories it serves. Louisiana’s “Cancer Alley,” the petrochemical corridor stretching down the Mississippi from Baton Rouge to New Orleans, earn its grim name because of the above-average incidence of cancer and other diseases in the region. The EPA has said that chemical emissions from nearby petrochemical plants are likely to blame, although plant owners have disagreed with such findings.

Petrochemical leakage can also occur in the form of methane leaks. Methane is a powerful greenhouse gas, trapping heat within our atmosphere and exacerbating global climate change. And methane leaks are relatively common.Indeed, research teams at the University of Colorado found that the U.S. natural gas industry is leaking 60 percent more gas than recent EPA estimates suggested. Methane leaks, which can be difficult to detect, can also have an adverse impact on any nearby population, as in the Aliso Canyon gas leak of 2015.

Any pollution from the ASTH’s pipeline would be a serious problem, given that it’s planned to flow alongside the Ohio River, already one of the most polluted rivers in the country. Indeed, Pennsylvania’s Department of Environmental Protection (DEP) is already concerned about pollution from Shell’s ethane cracker pipeline. In June, the DEP reported that there were “significant technical deficiencies” in the company’s pipeline plan, and the way in which it would impact local water sources.

The Future

For now, the ASTH looks likely to go ahead. Local governments are enthusiastic about its promise of creating jobs, energy executives are excited by the possibility of “unlocking” the region’s natural gasses, and overseas investors see it as a great way to generate cash.

But there are still serious questions about the project: Will it generate jobs and profits for Appalachia, or will the wealth leave the region, like coal wealth before it? Will it adhere to strict environmental standards, or will the petrochemical boom lead to dangerous pollution?

We know approximately how much money it will take to build the petrochemical hub. But what we don’t yet is the project’s real cost.