This is excellent news for West Virginia.  A California based company, US Methanol, is in the process of dismantling some existing methanol plants overseas and installing them in the Kanawha River Valley.

The plants take natural gas and convert it to methanol which is used for a host of things.  Wikipedia is a good place to start if you want to get into those details.

We’ve been hoping for a cracker plant for West Virginia for a long time, mainly because it would be good for the West Virginia economy.  Right now, pretty much all of the natural gas produced here is shipped out of the state as a raw product.  Shipping a finished product would certainly be better, as would having the additional jobs.  These plants, while not as large as a cracker plant, would provide a more finished product and some jobs.  The nice thing is, they can be built in 12-14 months.  A cracker plant takes several years to build, after several years of planning.

Right now there are two methanol plants that are definitely being built, but US Methanol seems to be thinking of building more.

While this is good news for West Virginia residents, it’s also good for West Virginia royalty rights owners.  The increased use of natural gas here in the state will drive up demand, and consequently drive up royalty payments.