Shale gas industry flourishes in W.Va.'s Marshall County

Signs of a developing shale gas economy abound in Marshall County, W.Va.

They dot the Ohio River south of Moundsville along state Route 2, where glistening fractionation towers rise above gas processing plants, powered by new electric substations across the highway. They fill parking lots with pickups, some with the out-of-state license plates of “pipeliners” who leaders hope will become a year-round presence.

“You go to the Wal-Mart and see a lot of strangers now,” said Wanda DeTemple, 79, who lives in the community of Washington Lands, close to the expanded processing facility that pipeline company Williams operates on a curve in the river at Round Bottom.

Sitting at the bottom of the Northern Panhandle, Marshall County anchors the Wheeling metropolitan area, which the Bureau of Economic Analysis recently identified as the fifth-fastest growing economy in the country. Shale-related business fed a 9.5 percent increase in the area's gross domestic product from 2013 to 2014, the bureau said in September.

“There's no question that the growth of the natural gas industry is with us and will continue,” said county Commissioner Stanley Stewart. “We seem to be the focal point, from the north end to the south end.”

Leaders say the county, at the geographic center of liquids-rich Marcellus and Utica shale operations, pipeline development and legacy industries, could anchor a regional center for shale-related manufacturing and industry. Gov. Earl Ray Tomblin and other officials who gathered last month in Morgantown to discuss tri-state planning said they want to build a gas and petrochemical complex that would rival that found on the Gulf Coast, boosting local demand and prices for gas and the liquids that also come from shale wells.

“It's pretty exciting to see growth in the area,” said Gary Hinerman, a lifelong resident of Moundsville who supervises operations at Williams' new gas and liquids processing plant at Oak Grove.

Overall job creation in the county has been slow as new gas-related jobs replace some of those lost to other industries. But with plans underway for a gas-fired power plant near Moundsville, an ethane cracker across the river in Ohio and expansion at several processing stations, Marshall County shows the first signs of building a complex that advocates say will bring more jobs.

“It's the perfect example, what's going on there,” said Cory Dennison, president of the West Virginia nonprofit economic development group Vision Shared.

Clustered plants

In Western Pennsylvania, where processing plant builders have run into resistance at some municipal planning levels, facilities are spread out from Washington and Greene counties north to Butler and east to Delmont. Royal Dutch Shell is looking farther afield in Beaver County to potentially build its cracker.

Development has been more compact in Marshall County, which planners say bodes well for expansion.

“That cluster of petrochemical and manufacturing and natural gas, that's what we need to create,” Dennison said.

A property tax credit enacted four years ago, aimed mostly at bringing an ethane cracker to the state, helped attract some attention among gas companies. But a recent study by the West Virginia Center on Budget and Policy, a non-profit policy research organization, said the incentive failed to bring in any large manufacturers that could use gas. A joint venture that was considering building an ethane cracker near Parkersburg put the plans on hold in April.

“That's a help, but it's not the primary reason for being there,” Stephen Arata, CEO of Dallas-based Blue Racer Midstream, said about such incentives. His company, a joint venture between Dominion and Caiman Energy, is expanding operations at its sprawling Natrium processing and fractionation complex at the southern end of the county.

Riverside brownfields that are close to rail lines and in the path of interstate pipelines, amid a field of wells that produce ethane, propane and butane with their gas, are the county's biggest selling points, industry leaders said.

“You're going to have these facilities around where you have that production,” said Cory Taylor, manager of commercial development for Williams' Ohio Valley supply hub. “That's some of the best rock in the country. That's what's driving the need to have them there. You want to have that in close proximity.”

More expansion

The Williams plant at Round Bottom takes natural gas liquids from the company's Oak Grove and Fort Beeler plants to the east — but still in Marshall County — and separates out propane and butane for distribution by rail or truck.

The recent expansion tripled the capacity of the plant and added eight bays for trucks. Oak Grove has room for equipment that would increase its processing capacity from 200 million cubic feet of gas per day to 2 billion cubic feet.

Processor MarkWest chose Majorsville in eastern Marshall County, close to the Pennsylvania border, to build a plant in 2010 because of nearby drilling activity and power supply and the intersection of several pipelines, said Kevin Hawkins, senior manager for investor relations at the company's Denver headquarters.

With six plants at the Majorsville complex and a seventh coming online next year, it's MarkWest's second-largest facility. Despite a slowdown in drilling because of low prices, Majorsville operates at 90 percent of its capacity as producers keep looking to move products to all available pipelines.

“We want to have the next plant on when the next operator needs it,” Hawkins said of expansion plans. “We don't build a plant and hope to fill it with volume.”

At the Natrium plant, Blue Racer handles both processing and separation of liquids. Arata said it made sense, having large existing pipelines such as Texas Eastern in the area, as well as access to barge traffic on the river and to rail lines. He expects further business when Natrium connects to Sunoco Logistics' planned Mariner East 2 pipeline, which will move ethane, butane and propane across Pennsylvania to a port south of Philadelphia.

“We like the area because it is a logistical hub for us,” Arata said, noting flat sites along the river formerly occupied by coal-related companies and other businesses are zoned for industrial use. “We expect to be expanding for some time.”

Long-term jobs

Though pipeline construction and processing expansion bring in thousands of temporary workers, the gas operations are less manpower intensive.

“Miners are suffering. We hope they can get jobs with other industries,” Stewart said.

Officials want to lure manufacturers that can use the cheap natural gas and liquids to power their operations or as a base component for plastics once they are converted at a cracker, such as the one Thai company PTT Global Chemical is considering just across the river in Ohio at a former coal-fired power plant.

“We really hope to attract the crackers and downstream opportunities to get those long-term jobs,” Dennison said.

PTT is spending $100 million on engineering studies as it considers the site, and could build additional facilities for processing that would employ several hundred people.

“A lot of those people would come from across the river in Moundsville,” said Paul Wojciecowski, a director at PTT's American division.

David Conti is a staff writer at Trib Total Media. He can be reached at 412-388-5802 or dconti@tribweb.com.