Chamber summit readies W.Va. for ‘tidal wave’ from future of gas
WHITE SULPHUR SPRINGS, W.Va. — Spouting statistic after statistic, natural gas executives made the case for tying West Virginia’s economic future to their industry at the annual West Virginia Chamber of Commerce Business Summit, at The Greenbrier resort Wednesday.
“Sometimes, if you’re lucky, you find yourself sitting on a treasure,” said Randy Cleveland, president of XTO Energy, an Exxon Mobil subsidiary and the nation’s largest holder of natural gas reserves.
Cleveland compared West Virginia to someone who walks into PBS’s “Antiques Roadshow” not realizing that his trinkets are, in fact, ancient jade figurines worth millions.
“West Virginia is sitting on a treasure with generational implications,” Cleveland, whose company has leased 170,000 acres in the Mountain State.
The Marcellus Shale formation under West Virginia, Pennsylvania and Ohio is the largest shale formation in the country and is responsible for 20 percent of all U.S. natural gas production, Cleveland told the 800 registered attendees. Soon, it will be the third-largest gas-producing region in the world, Cleveland said.
He said global demand in natural gas is expected to rise by 65 percent by 2040 and that Marcellus production will more than double over the next decade.
After a lunch of smoked brisket, fried trout and pecan tartlets, Cleveland urged the crowd to work to loosen West Virginia’s “pooling” laws, which can allow drillers to access gas beneath private property they do not own if they have leases for enough surrounding land.
Cleveland touted the byproducts of natural gas production, products like ethane and ethylene that are used in plastics and other industrial products.
Global demand for ethylene is expected to rise by 150 percent over the next 30 years, Cleveland said.
Ethylene is one of the products likely to be produced at the planned ASCENT cracker plant in Wood County.
David Peebles, a vice president for Odebrecht, the Brazilian petrochemical company that owns ASCENT, cited the Bible in discussing his company’s work in West Virginia.
In the parable of the talents, three servants are given talents (a unit of money) by their master.
Two servants traded their money, doubled their investment and were praised. The third servant buried his money and was reprimanded.
“We’ve been dealt a hand here that’s not five talents, I think it’s 1,000 talents, with shale,” Peebles said. “This is going to be a tidal wave that we do not yet understand.”
He talked about developing a regional hub with neighboring states and pointed out that 45 percent of the plastics industry that cracker plant will serve is within 500 miles of the site.
Peebles promised to work with unions and sign a project labor agreement for the cracker complex.
“We cannot think of labor as a commodity, we cannot think of labor as people that we’re going to use up and spit out,” he said.
Addressing environmental concerns, Peebles said his company would, obviously, disturb the environment but promised to use best practices to mitigate its impact.
“We don’t want to avoid regulations, we don’t want to bash the EPA, we don’t want to bash the Corps of Engineers, we want to have a cooperative relationship, because no one wants to breathe bad air, no one wants to drink contaminated water,” Peebles said. “We have to be out front with progressive policies that allow that to happen.”
He went out of his way to praise the EPA, the frequent whipping boy of West Virginia politicians.
“Everybody today is upset with [the] EPA, well I grew up in high school in Cleveland, where the Cuyahoga River was burning,” Peebles said. “Mr. Nixon was the guy who started the EPA, and thank God, we have clean air and we have clean water.”
He struck quite a different tone from Sen. Joe Manchin, who spoke just before Peebles.
Manchin accused the Obama administration of trying to do away with all fossil fuels.
“I’ve been telling my gas friends, if you think they’re picking on coal and not going to come after you, think again,” Manchin said. “They get done with coal, it’s gas, I can assure you that. They don’t want anything.”
Under the Obama administration’s proposal to limit carbon emissions from power plants, coal would provide 30 percent of the nation’s power in 2030, down from 39 percent in 2013.
Randy Huffman, secretary of the West Virginia Department of Environmental Protection, had nothing but praise for Odebrecht.
“That’s the business model that everyone should be following if they want to be successful,” Huffman said. “They’re a great company, they don’t do anything half way or on the cheap.”
Huffman said the challenge with developing the Marcellus Shale, with horizontal drilling and hydraulic fracturing, is limiting the impact on local communities.
He said the impact, though, is as much social and cultural as it was environmental.
“You have noise and trucks everywhere all the time,” Huffman said. “There’s a lot of impact in what had traditionally been very rural communities.”
Reach David Gutman at email@example.com, 304-348-5119 or follow @davidlgutman on Twitter.