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West Virginia Governor Vows to Push For Ethane Cracker

West Virginia Gov. Earl Ray Tomblin told legislators in his State of the State Address on Wednesday that he would intensify efforts to attract an ethane cracker to the state.

"This session I will submit legislation to further refine our incentives in a fashion I believe will strengthen our competitiveness in achieving that goal," Tomblin said, adding that a single ethane cracker would be a multi-billion dollar, multi-year investment in the state.

"Let me be clear about my intentions," the governor added. "I will do everything in my power to make sure that West Virginia is positioned to take full advantage of this opportunity. I will not limit our efforts to just one project or even two. We will compete for every project -- every dollar of investment and every new job that relies on the natural resources with which we have been so blessed."

West Virginia is in competition with neighboring Ohio and Pennsylvania for an ethane cracker, which could create thousands of construction jobs over a couple of years, followed by several hundred permanent jobs. During his speech, Tomblin cited American Chemistry Council figures that estimated about 12,000 downstream manufacturing jobs could ultimately be created.

"The governor and the administration have been committed to do everything they can to attract that cracker," West Virginia Oil and Natural Gas Association Executive Director Corky DeMarco told NGI's Shale Daily on Thursday. "I think he just reinforced his commitment to not only the oil and gas industry, but also the coal industry. And that's a positive."

The governor also praised legislators for passing the landmark Natural Gas Horizontal Wells Control Act, which he signed late last year (see Shale Daily, Dec. 27, 2011).

"The extraction of natural gas and other byproducts can be a significant job creator and provide billions of dollars' worth of economic benefits to our state," Tomblin said. "We've taken the first step. With broad bipartisan support this legislature passed reasonable regulations to protect the environment while providing the regulatory certainty needed to encourage new job opportunities right here at home."

Tomblin said he had entered into an agreement with seven other unidentified states to encourage automakers to build more natural gas vehicles, and said West Virginia would look into converting more of its fleet vehicle operations to natural gas.

"It makes sense to start using fuels for our cars and buses that we produce right here in West Virginia," Tomblin said. "It is in America's best interest, and we can lead the way."

Tomblin also referred to plans by Baker Hughes Inc. to build a $40 million oilfield service facility that would create 275 new jobs in Bridgeport; plans by MarkWest Liberty to build a $400 natural gas processing complex in Wetzel County (see Shale Daily, Dec. 15, 2011); Aqua Transfer and Oilfield Solutions plan to add 50 jobs at a new office in Upshur County; and other investments by Weatherford International, Superior Appalachian Pipeline, Dominion Transmission, American Municipal Power and American Electric Power.

"This is one more tangible sign of the enormous potential to create West Virginia jobs through the responsible development of our natural resources," Tomblin said.

Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia (IOGA), told NGI's Shale Daily that he was encouraged by the governor's speech.

"The governor is spot on," Burd said Thursday. "He is absolutely correct that in this upcoming session we certainly need to do everything we can in this state to maintain the budget surpluses that we've been fortunate enough to have and maintain. You do that through good investment strategies with companies looking to locate here, good principles to entice businesses to come and a proper tax structure."

DeMarco concurred. "[Tomblin] has taken some bold steps to reinforce our financial position," he said. "We are one of only a few states to have a [budget] surplus. All of those reinforcements are good, not only if you're going to try to attract a cracker, but also if you're talking about the stability of the state that you're going to be doing business with."

Several companies are eyeing the Marcellus Shale region to locate an ethane cracker. Royal Dutch Shell plc is reportedly considering sites in West Virginia, Ohio and Pennsylvania for a cracker that could consume 60,000-80,000 b/d of ethane (see Shale Daily, Dec. 5, 2011; Sept. 7, 2011). Meanwhile, hundreds of West Virginians are petitioning companies to build a cracker in the Kanawha Valley (see Shale Daily, Dec. 15, 2011), while state officials have lobbied hard for the Mountain State (see Shale Daily, Aug. 26, 2011; July 18, 2011; May 6, 2011; Dec. 23, 2010).

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