Current and former officials in the West Virginia Department of Environmental Protection (DEP) warn that companies hoping to build an ethane cracker in the state could have difficulty getting the necessary permits if they choose to build in areas that don't meet federal air quality standards.
According to the U.S. Environmental Protection Agency (EPA), 10 counties in the state -- including the entire northern panhandle in the Marcellus Shale -- and a portion of an 11th county, are classified as nonattainment areas for 2.5 particulate matter (PM).
Eli McCoy, a former DEP director who now serves as a consultant for Potesta & Associates Inc. in Charleston, WV, told NGI's Shale Daily that building a cracker in one of the nonattainment areas would be difficult.
"It becomes more difficult to permit a facility because there are unconditional hurdles and steps one must go through," McCoy said Friday. "It will cost more money, it will take more time, and anyone wishing to build a facility in those counties might have to find offsets for the emissions loadings that they would be providing to the atmosphere."
DEP spokesman Tom Aluise agreed that a prospective cracker's backers would need to secure offsets, meaning they would need to secure agreements from current polluters to cut back their emissions.
"They would probably have to get offsets," Aluise said Friday. "If they're wanting to build in a nonattainment area then the permit is going to be hard to come by. There's going to be a lot of beefed-up requirements."
The counties in question are the four that comprise the northern panhandle (Brooke, Hancock, Marshall and Ohio), two in the Kanawha Valley (Kanawha and Putnam), plus Berkeley, Cabell, Wayne and Wood counties. A portion of Mason County along the Ohio River is also considered a nonattainment area.
Aluise said state regulators were hopeful that the EPA would soon delist some of those areas. "We're expecting new air quality data to come out soon, and we're hopeful that some of those nonattainment areas will be taken off the list," Aluise said. "Obviously, having the northern panhandle listed is big."
Asked if he thought a company would avoid building a cracker in the aforementioned counties because they are nonattainment areas, Aluise said, "I would think that if it's a good place, they may decide to deal with those issues as they come up. Or they may decide that it's worthwhile to have to have more demands put on them. The permit may be hard to come by, but the end result may be good business."
McCoy, who addressed the issue at a conference Wednesday by the West Virginia Manufacturers Association, concurred. "If you want to get through the permitting process, you need to be cognizant of your location," McCoy said. "I stress the need to understand other intangibles. Those environmental permits are things that can add a couple of years to permitting requirements. The actual ramifications can't really be projected.
"There are places in West Virginia where you won't have those issues. There are probably places in Ohio and Pennsylvania where you won't have those issues, either. But in all three states there will be places that you will, and they should have to be dealt with in about the same way in all three of those states. There shouldn't be much opportunity for shopping the facility around from one state to another, to see which gives you the best deal on the air permit."
On March 15, Shell Chemical LP said it had signed an option to purchase a parcel in Beaver County, outside of Monaca, PA, for developing a petrochemical complex (see Shale Daily, March 16). Since then rumors have swirled that two companies may be interested in building their own competing crackers in West Virginia, but no firm plans have yet materialized (see Shale Daily, March 21a).
Meanwhile industry experts believe ethane production in the Marcellus could potentially support multiple ethane crackers, but ultimately economics would play a larger role in deciding which projects get built and which do not (see Shale Daily, March 21b).