American Oil and Gas Reporter - January 2012 - 203

ConventionSection: Independent Oil and Gas Association of West Virginia
Ethane Crackers
Chesapeake Corp. Chief Executive
Officer Aubrey McClendon spoke at IOGAWV's 2011 winter meeting, and predicted a rebirth of Ohio Valley manufacturing facilities because of increasing
ethane production across the region.
Burd says that forecast is growing
closer to coming true, with West Virginia
expected to announce the location of an
ethane cracker early this year. "This will
be national news because ethane is a
building block. From ethane you produce
ethylene, and ethylene is a building block
for the chemical industry. Virtually everything you touch comes from ethane and
ethylene," he elaborates.
The United States already has a host
of ethane crackers, Malcolm observes,
although he notes most are concentrated
in a few areas, such as Houston.
"There used to be as quite a few here
in the Kanawha Valley, in and around
Charleston. That actually was the beginning
of the chemical industry in our area," he
recalls. "Most of those jobs have moved
out, but this could revitalize the chemical
and manufacturing industries. If we get a
cracker plant here and then get the industries along with their downstream jobs, it
would be huge for the state."
Maintaining strong gas production in
West Virginia is essential to keeping an
ethane plant running, Malcolm allows,
and it supports the oil and gas industry's
arguments that supporting domestic energy
resources leads to economic development.
"The politicians truly see the economic
development and job opportunities that
come not only with that plant, but also
with the downstream chemical and manufacturing industries," he says. "It took a
while before we were able to convince
them that there would not be a cracker
plant unless there was a lot of gas development. Finally, legislators realize one
depends on the other."
Morgantown Ruling
Hydraulic fracturing operations at two
wells that city officials in Morgantown,
W.V., sought to prevent have been completed and the wells are ready to go on
production, Burd reports. An Aug. 12
ruling by a circuit court judge blocked
the city's actions, finding such restrictions
were the responsibility of the West Virginia
Department of Environmental Protection's
Office of Oil & Gas (AOGR, September
2011, page 18).
Burd asserts the judge's ruling stating

the Office of Oil and Gas holds primacy
over oil and gas regulations will help
deter other local efforts to seize that authority. "We anticipate fewer efforts by
these counties or municipalities to try to
usurp the authority of the state," he says.
Malcolm reports Northeast National
Energy LLC, the well operator, is an IOGAWV member, and the association actively supported its legal and public education efforts. DEP required certain permit
requirements for the site, and Northeast

complied with those with no complications, he says.
"It's the kind of thing you hear a lot
about beforehand, but once the operation
got under way, you didn't hear anything.
That is the way we like things to go," he
offers.
Well location was one unique factor
in the judge's decision, Malcolm says,
explaining the site was more than a halfmile outside the city limits. "What caused
some of the concern was Morgantown

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JANUARY 2012 203

American Oil and Gas Reporter - January 2012

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