WV’s US Senators Lead the Charge to Build $10B NGL Storage Hub

A recent article in the left-leaning Roll Call (official publication for Washington, D.C. swamp dwellers) attempts to paint the Trump Administration as out of step with the people he wants to help in West Virginia. The article says Trump’s strategy to prop up failing coal and nuclear plants is an attempt to boost coal mining jobs in WV, but is running counter to the state’s strategy of embracing the natural gas industry. Perhaps they have a point. However, what’s most interesting about the article is not the ginned up conflict between Trump and WV, but how the article spotlights WV’s two U.S. Senators–Republican Shelley Moore Capito and Democrat Joe Manchin–and their continuing role in trying to make a $10 billion NGL (mostly ethane) storage hub facility become a reality. The storage hub will be a jobs magnet with some estimates that it will create more than 100,000 new jobs in the state. The storage hub will also draw manufacturers looking to locate near ethane crackers, as a source for plastics used in their manufacturing process. Capito, in her comments, attempts to gloss over the rivalry between coal and natural gas, saying “all those rivalries have gone by the wayside.” Er, a, we beg to differ. But leaving aside the coal v. natgas focus of the article, we found two very interesting items. (1) The Dept. of Energy loan guarantee that would cover $1.9 billion of the estimated $10 billion cost to build it is a much bigger deal that we had realized. Why? Because any project that wins such a guarantee has gone through a rigorous review process. Winning such a guarantee is like conferring a triple A rating on the project for others who will consider investing in the project. It gives them confidence that the project has been thoroughly vetted and is low risk. (2) Manchin, in speaking with DOE Sec. Rick Perry, is using an interesting and novel argument to convince Perry the storage hub is a good thing to do. Manchin said when hurricanes hit the Gulf Coast, it knocks out petrochemical industry there, with a cascading effect across the U.S. Cracker plants (fed by the storage hub) in the northeast, are not susceptible to hurricanes. So Manchin’s pitch to Perry is this: Keep the Gulf Coast crackers cooking for products to export to other countries, but let’s build the storage hub (and crackers) in the northeast, so our country’s petchem industry isn’t adversely affected by a major hurricane…

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