Sen. Manchin Questions Officials About Appalachian Storage

(September 11, 2019) — U.S. Sen. Joe Manchin (D-W.Va.), ranking member of the Senate Energy and Natural Resources Committee, has closely questioned details of an $83-billion Chinese investment in his state. Manchin, a supporter of a proposed Appalachian NGL storage hub, expressed his concerns during a committee hearing to examine the importance of energy innovation to economic growth and competitiveness. Heard was testimony from Brian Anderson, director of the National Energy Technology Labora- tory and John Deskins, director of the Bureau of Business and Economic Research at West Virginia University.

The senator expressed his growing concern over the lack of transparency surrounding the Chinese investment in West Virginia’s energy sector under a memorandum of understanding (MOU). Manchin observed that the significant $83-billion investment is welcome “if it’s for capital expenditure.” As a point of comparison, he noted that his state’s entire budget is roughly $4 billion a year. However, he asserted the intent of the MOU remains unclear.

“If it’s for removing resources such as ethane, propane, butane, and making a commitment of taking all of our wet gas, which we use as a building block to reinvigorate our petrochemical base, then I would hope for the officials in my state of West Virginia, that is a nonstarter. We will do everything we can to prevent that from happening.” He added, “Bring your investments for capital improvements and capital expenditures; don’t bring your investments to try to think you’re going to rob us of our natural resources.”

Queried by Manchin about what development of an NGL storage hub and petrochemical revitalization could mean for West Virginia and the region, Deskins observed that while the ongoing surge in raw natural gas production in the state has been remarkable and beneficial, the number of jobs created is not close to offsetting jobs lost in the coal industry. Exporting raw natural gas to other states affords benefits, “but it’s not a transformative opportunity for West Virginia, it’s not going to allow us to achieve the prosperity we’ve been hoping for over the long run,” he said.

Deskins emphasized that an NGL storage hub is just part of the process, but keeping gas in West Virginia for use in chemicals and plastics production, and other types of manufacturing, would yield value-added benefits by the export of more valuable products. “To the extent that we can really achieve our full potential, and see the value-added manufacturing that could take place in West Virginia, can be a completely different and transformative experience for a state to bring in tens of thousands of high-paying jobs that could make a real difference,” he said.

West Virginia officials see the state’s vast natural gas reserves as providing a path for renewed economic prosperity for the Mountain State. Envisioned is a hub rivaling the Gulf Coast as a center for processing natural gas and producing plastics. Top officials have lined up behind a plan to spend as much as $10 billion to develop a mammoth underground storage to hold natural gas liquids used in manufacturing.

By providing a sizeable storage hub for ethane and other NGLs, proponents say the move would encourage the expansion of a chemical production corridor that is emerging along the upper Ohio River and bring thousands of good-paying jobs to the region. At the Senate Energy and Natural Resources Committee hearing, Manchin noted that “the petrochemical industry along the Ohio River and up the Kanawha River…has been strategic for our country since World War II. It’s a shell of what it used to be, so we have the ability to grow within that same footprint and it’s not being utilized.”