In a surprise move, two West Virginians have announced their intention to build an ethane cracker plant in the state. Former state Supreme Court Justice Richard Neely and Ryan Cunningham, owner of Charleston-based Cunningham Energy have formed a partnership with a few others and will try to get the necessary permits and financing to build an ethane cracker plant on a 1,500-acre plot near Montgomery, WV.
Two large energy companies, Shell and an unidentified company, have said they will make announcements in January of 2012 on where they will build ethane cracker plants. West Virginia was hopeful that Shell or the other company would select their state. But Neely and Cunningham don’t want to leave it to chance—so they plan to move forward.
Each cracker plant would take upward of a $2 billion investment to build, creating thousands of temporary jobs to build the plant, and then thousands of ongoing jobs to operate the plant and the associated industries that will pop up around the plant that use the raw plastics material manufactured by a cracker plant.
Why does Judge Neely want to move forward with such a “risky” venture, and will that mean other potential plants will now stay away?
"We are doing it because we don’t believe a big company is going to do it," Neely said.
He also said just because his company is planning to build a cracker that doesn’t mean another company can’t also build one here.
Neely’s company, Invictus, would need to raise as much as $2 billion. Neely said he knows finance people from his years at Yale. He also said he has experience in business that people might not realize, as well as economic development experience and familiarity with chemistry.
The company intends to apply for an air quality permit to build the cracker on an old surface mine site along the Kanawha River near Montgomery.
That permit may take about two years to sort out, Neely said. If it is approved, Neely’s company would then need to prove its business model based on prices at the time and then proceed to raise hundreds of millions of dollars to build the facility.*
*Charleston Daily Mail (Dec 12, 2011) – ‘Cracker’ investor unwilling to wait