CHARLESTON, W.Va. — Senator Joe Manchin is questioning a deal with China Energy that started as a blockbuster before moving into purgatory.

“This whole thing stinks to high heavens,” he said today on MetroNews’ “Talkline.”

Manchin first stated his concerns last week during a Senate Energy and Natural Resources Committee hearing to discuss U.S. liquefied natural gas production and its role in the global marketplace. He expanded on his thoughts during a statewide radio appearance.

Manchin suggested that, if anything ever results, the China deal could be more about shipping raw natural gas overseas than about building out the industry in West Virginia.

Manchin protested that he doesn’t know what was said on a memorandum of understanding that outlines the agreement because he’s never seen it.

“My concern is, what is the deal? I’ve never seen an MOU for, what, it’s been two or three years now. I didn’t know what their intent was,” Manchin said today on MetroNews’ “Talkline.”

“So we call the energy company, China Energy, into my office here in Washington. We couldn’t get a direct answer from them. Are you going to invest in manufacturing? Are you going to be a majority stockholder or a minority investor? Is it going to be in the United States, or are you just going to take the product out?”

West Virginia officials announced $84 billion investment agreement with China on Nov. 9, 2017.

Then-Commerce Secretary Woody Thrasher signed a memorandum of understanding with China Energy President Ling Wen as President Trump looked on. State officials expressed excitement about its potential.

Office of the Governor

Jim Justice

“Absolutely. Absolutely. They’ll be investing dollars here,” Gov. Jim Justice said during an appearance that month on ‘Fox and Friends.’

Now, in some ways, the simmering debate over the China deal plays into the race for governor in West Virginia.

Manchin, who was governor from from 2005 to 2010, said he’ll decide whether to run for that office again sometime after Labor Day. Incumbent Governor Justice is running again. And Thrasher, who was forced out as Commerce Secretary, is in the race too.

Woody Thrasher

Thrasher responded to Manchin’s comments by defending the deal.

“China Energy never suggested to me that they had any desire to take out our resources,” Thrasher stated.

“China Energy would add value to our natural resources by building bricks and mortar facilities within our state, hiring our people and paying taxes. This is exactly what U.S. Sen. Joe Manchin said this morning on MetroNews’ ‘Talkline’ that he would love to see and would welcome.

Thrasher said West Virginia should be courting anyone who could help develop the petrochemical industry.

“I’m shocked that anyone showing an interest in investing in West Virginia is a bad thing. We have huge potential for a vibrant petrochemical industry and should be courting anybody who would bring that to light.”

Thrasher acknowledged that the memorandum of understanding was not a binding agreement “but simply an outline of our discussion, which encapsulated our understanding of the path forward.”

State officials have not released the memorandum of understanding to the public. The nonprofit Appalachian Mountain Advocates has been suing to try to get it, filing a recent appeal to the state Supreme Court.

CNBC focused on a deal a week ago, coming out with a story headlined “West Virginia still waiting on $84 billion investment from China.”

A West Virginia delegation that included the current Commerce Secretary, Ed Gaunch, returned to China last month and described optimism.

“They have identified seven projects for West Virginia,” Gaunch said after the visit.

Manchin said he can’t tell what China Energy intends to do. Because he hasn’t gotten a direct answer, he concluded the deal is about shipping raw products.

“When I didn’t get anything constructive about what they were going to do in West Virginia or in the United States of America, then I came to the conclusion — and once we looked at what their modus operandum has been around the world in different parts of the United States — it’s taking the raw products, the stock feed.

“And when they do that, basically, they take us out of opportunities for manufacturing in West Virginia. If they buy all the methane, propane and butane, they’ve taken all our stock feed out that we could have had a cracker and gotten back into the manufacturing business and invigorated our chemical valley.”

Manchin said he would welcome manufacturing investment by China in West Virginia.

“We haven’t seen any movement of them manufacturing something, building a cracker plant,” Manchin said. “I’d love for them to invest in a cracker plant. I’d love for them to invest in manufacturing in West Virginia, would love it.

“But for them to be able to come in here and say ‘We have a contract for $83 billion over 20 years to take every drop of butane, propane and ethane from our state and export that from China then forget about the storage hub, everything we’re working on. That’s all gone.”

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