CHARLESTON, W.Va. — A storage hub for natural gas remains a hot topic.
The Appalachian storage hub that has been in development over recent years was a big topic of discussion at the 2019 Independent Oil and Gas Association of West Virginia winter meeting in Charleston over the past week.
Independent Oil and Gas Association of West Virginia (IOGAWV) president Brett Loflin said the much-anticipated hub, which would store natural gas liquids underground in a four-state region that includes West Virginia, could be coming sooner rather than later.
“It is a reality,” he said. “It’s going to happen and if it happens it’s an impact of 100,000 jobs in our area. Not just West Virginia but also Ohio, Pennsylvania, and possibly Kentucky.
“The hubs will allow us to use the natural gas that we produce in our own state. We will be able to use it in our state. There is nothing wrong with exporting natural gas because we still have to pay employees to drill the wells and find the resources that contain the gas.”
Loflin, who is also the vice president of regulatory affairs for Northeast Natural Energy, said there will be more than one site that would store the natural gases such as ethane, propane, and butane. He said there has been $1.9 billion of guaranteed loans that will go to the research in determining the best spots for storage of the liquids.
He said developers will search for the best spots in Appalachia to mine limestone and create caverns. They would store all the natural gas liquids in those caverns. Loflin said a couple regions in the state have been looked at including, not limited to, the Kanawha Valley and North Central West Virginia.
“You have to have an actual way to store the natural gas liquids because if there is some disruption in supply, you can’t just rely on the wells that we drill as producers to supply that ethane,” Loflin said. “If there is a disruption, you have to have the ethane stored somewhere so the crackers will have a constant supply.”
Construction of pipeline would be needed for the Appalachian Storage Hub. Affiliated Construction Trades (ACT) Foundation Director Steve White appeared on MetroNews “Talkline” last week and said the distribution network attached to the hub is key. White even compared it to a supermarket for businesses.
“It will run all the way down the Ohio River and into the Kanawha Valley,” he said. “You’re talking about a six pack of pipelines. A huge pipeline system that carries butane and ethane and all the chemicals. Now a business along that route could say ‘hey I will take a million gallons of that’ or ‘hey I will take 50,000 pounds of that.’
“These ethane crackers are so big they go and make their direct connections. They build the pipeline for that and all that. All the other business don’t have the ability to do that. We don’t have the ability to go to the farmer and get our home needs. The supermarket facilities that trade. That is what the storage hub and the associated pipeline and transportation system will do.”
White confirmed progress is being made in bringing the Appalachian Storage Hub to West Virginia, describing it as huge investment. A public-private partnership is the right way to go and government can help get it started, he said, and part of the hold up is over the amount of money needed for such a project.
Developers estimated a total buildout cost for the hub of around $10 billion with a startup cost of at least $1 billion.
White added that wet gas is already leaving the state, to East Coast pipelines that bring it to the Gulf Coast and this would allow for some gas to stay and be brought into the state.
He addressed the concerns that might come over the pipeline construction from environmentalist groups.
“We build pipelines, we believe that it has to be done right,” he said. “We are not for cutting corners or anything like that. Pipelines have been around, they are all over the place.
“The shutdowns hurt. What really hurts our people is they get everybody assembled for these jobs. Folks have made commitments that is the job they will have for the season. Sometimes they pull a camper because they are working 70 hours and want a place to sleep. They’ve made all those commitments then boom it is shut down.”