Category Archives: Natural Gas Utilization

Parkersburg Cracker Plant News

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Cracker Plant

The proposed cracker plant for Parkersburg, WV is showing some more signs of life.  WV Department of Commerce Secretary Keith Burdette said that Odebrecht is expected to buy more land on site (link requires sign-in to read article) during this quarter of the year, so in the next two months.  While we still can only hope to be pleasantly surprised when/if they make a final decision, buying up property is a sign that there may be good news when that happens.

Royalty owners should all be pushing their legislators to do something to encourage Odebrecht to build this plant.  Turning the raw material into a more refined product before sending it out of state will bring more jobs and more stability to West Virginia’s economy.  That’s something we should all encourage.  Call or write your legislator.

Possible Alkylate Plant, Electric Plant

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One of the things that made the Marcellus shale so exciting for producers at the beginning of the Marcellus boom was that it was rich in natural gas liquids, including ethane, pentane, propane, and butane.  The latter can be refined into alkylate, an octane booster.  It is “key for cleaner burning gasoline” (.pdf).  More on mixing gasoline here.  So, changing butane to alkylate will help alleviate some of the environmental issues with burning hydrocarbons.  It won’t end it, of course, because hydrocarbons are still being burnt, but it will help.  Just another way that natural gas is helping improve things here in the good old U. S. of A.

All that said, MarkWest and Marathon are thinking about building an alkylation plant somewhere near an existing MarkWest plant in Jewett, Ohio.  Yes!  The more the merrier.  Use that natural gas up close to home.

On a related not, there’s a proposal to build a 550-megawatt gas-fired power plant in Elizabeth Township, PA.  The unusual thing about this plant is that the location is a contaminated industrial landfill.  Putting an energy plant on this site would be an excellent use of a bad resource.  It would kill two birds with one stone, putting to use difficult-to-use property and using abundant and cheap local natural gas to create needed electricity.

We hate to see the natural gas produced here in West Virginia not being put to its highest and best use.  Turning it into a final product close to home is much better than shipping it away as a raw product.  Now if only we could get a few more of these chemical plants, cracker plants, energy plants, and refineries located inside West Virginia.

 

6,300 Megawatts of Natural Gas Fired Electricity Proposed for Ohio

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Dynegy Inc. has proposed to build 6,300 megawatts worth of electricity power generating plants in Ohio.  The plants would be fired by natural gas.  That natural gas would come, naturally, from the Utica and Marcellus shales.

Other details are scant, as the article is more about the competing bids by other power generating companies and the associated drama.

West Virginia could use a few more natural gas powered electric plants.  We have several in progress in the northern panhandle and Harrison County.

New Pipeline Projects in West Virginia

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Gas Pipelines in Columbia

I was going to write up something about these new pipeline projects, but the folks over at Kallanish Energy already put together a good summary.

The Utica Access project is only five miles long and will come online at the end of 2016.  It will only move 205 million cubic feet per day and only down in Kanawha County, so it won’t impact production and royalty amounts much, if at all.

The WB Xpress will be an interesting project to watch, as it will move 1.3 billion cubic feet per day and will open in 2018.  There will be quite a few other project opening in 2018 as well.  2017 could be a very interesting year for West Virginia mineral and royalty owners whose rights aren’t leased.

Stonewall Gathering Pipeline Finished!

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Great news for West Virginia royalty and mineral owners!  The Stonewall Gathering project is complete and pumping gas out of the Marcellus Shale area.  It takes gas from Doddridge, Harrison, and Lewis counties and transports it to Braxton County where it connects with an existing Columbia Gas pipeline.  That pipeline takes the gas out of state.

It’s a big pipeline, at 36 inches in diameter, and is currently moving about 700 MMcf/day.  It’s highest capacity is expected to be 1.4 billion cubic feet of gas per day.  If it’s like other pipelines, it could probably be pushed a bit higher with some additional compressors.

The most pressing need in the Marcellus shale and Utica shale area is for take away capacity.  There is so much gas in the region that there simply aren’t enough pipelines to transport it all to market.  Consequently, pipeline companies can name their price to transport the gas, and they take a huge chunk of the value of the gas.  When all is said and done, Marcellus shale gas has been netting West Virginia producers more than a dollar less than what gas sells for at Henry Hub.

With more pipelines, the “differential” between Henry Hub and the Marcellus/Utica region will decrease.  That means more money in royalty owners’ and lessors’ pockets.  The Stonewall Gathering pipeline itself will not make a large difference.  Combined with other projects that should be completed in the next few years, though, we will start to see better royalty payments.

The Challenges of Converting Power Plants from Coal to Gas

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Here is an interesting article in the Pittsburgh Post-Gazette.  FirstEnergy closed down a coal-fired power plant in 2013, and had no plans to re-open it.  In the last few months, however, they have changed their minds.  At least, they have changed their minds about looking at the possibility of re-opening it.

The article states that market conditions have changed.  The price of electricity hasn’t gone up much, but the price of oil and gas has gone way, way down.  Who wants to bet that that one factor alone has reduced costs?

One other interesting point that was made in the article is that building a brand new gas-fired plant would (just a couple years ago) have been cheaper than converting the coal-fired plant to gas.

Five Facts About Fracking

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You won’t hear this phrase on this blog very often: the information in this article blew my mind.  Andrew Follett wrote an article published at the Daily Caller that describes five facts about fracking that haven’t gotten much traction in the news.  Most of them are extremely interesting.  The point about Russia’s economy shrinking because we no longer rely on their oil could have both good and bad long-term effects.  Click on over and read.  It’ll make you think.

A New Cracker Plant! …..In Louisiana.

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Axiall Corporation is building a cracker plant in Louisiana.  It’s expected to open for business in 2019, so sometime between three and four years from now.  That is, of course, if there are no construction delays or Hurricane Katrinas or any other such thing.  This is great news!  The cracker plant will process natural gas from the Marcellus/Utica plays

While we would prefer to see the cracker plant in Parkersburg, WV get built (and we now wonder why it’s not, seeing as how one can get funded and built over a thousand miles away from the Marcellus/Utica Play) we are excited that there will be a destination for ethane gas.

Of course, we badly need some pipelines heading out of this area.  Gas is trading a $0.59/MCF at Dominion South today.  That’s $1.30 less than the Henry Hub.

Shale Gas is Great for the Economy

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We’ve mentioned before that the abundance of shale gas is good for industry, as natural gas is a major source of energy for industry.  We went looking for an article that shows just how good shale gas is for industry, and found several that are right on point.

Sterling Burnett, writing for the Heartland, explains how chemical plant construction is coming back to the U.S. because of cheap natural gas.  Steve Goldstein over at MarketWatch says that the plastics industry alone will directly generate 127,500 new jobs in the next decade.  Matthew V. Veazey over at RigZone describes the kinds of jobs that will be available at LNG facilities when they are built, of which five are likely.  The jobs at the facilities are not the only benefits, as shipping LNG worldwide will increase royalties and jobs in the “oil patch”.

Giles Parkinson over at CleanTechnica says that electricity rates for consumers are not going down, but they’re also not going up as much as they otherwise would.  And of course, those who use natural gas to heat their homes will see direct benefits from the low cost.