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Again, where is the state helping with the finance of this craker? It's not, and again the company is building the plant in its home town. Your logic on how the plant is hurting the state is the dumbest thing I've heard. You have a local company that is building locally and keeping money in the state vs. an out of state company that will only build here if we give it incentives! This craker plant is actually better for the state! Plus, its close enough to shale gas that its in an acceptable place. Charleston is close enough, and the facilities are already here, transportation is already here, and obviously this company wants to build here and not there. If you can show me where the state is helping subsidize this, then maybe I'll reconsider, but fact is that it isn't.
Chris, they arent even building this plant to last. They just want state subsidies and a tax writeoff when they close the plant in a few years. This will be a boon to PA which bases its decisions off practicality and not handouts to private businesses.
To be fair, Chris, the officials at Aither have stated that they may look into a tax break as the state was so willing to give one to Shell (LINK). But this was proposed before Shell started their search for a site and before the tax incentives were announced, so they were at least willing to go ahead with this project.
As for the rationale, this is my last post on the matter. Aither, which is a spin-off of MATRIC, based in South Charleston, has only about 10 employees. The CEO, Len Dolhert, is "effectively building a company from the ground up" (same link), and it serves to make sense that it is easier to build at home. Regardless of this, the plant will be a $300 million investment, and it was previously reported (LINK) that Aither wants to build as many as three crackers at about the same revenues ($500 million). The other two crackers are projected to be a $750 million investment each. With the Institute cracker, Aither can use equipment at the Bayer site to save over $400 million in capital costs, making the Institute site a logical place for the first cracker. If you want a reason to build in Institute, Bayer just happened to have the infrastructure that gave Aither 400 million reasons to build there first.
As for being close to the gas, yes, it is smart to be close to the shale. However, it isn't like Charleston is in Wyoming. Charleston is, while not at its heart, within the Marcellus Shale formation, within the Huron and Berea formations, and next to the Utica formation. In any event, MarkWest will be providing the ethane via pipeline, I believe, so transportation costs will be relatively small. Currently, the ethane from Marcellus gas is being sent to Louisiana, Texas, and Canada, so I don't think those companies would grumble sending ethane to Charleston.
Markets? The primary markets would be secondary chemical companies, especially plastics companies. There are plenty of customers in the Kanawha and lower Ohio Valleys (Dow, Dupont, Sabic, Kraton, etc.) that would love a steady, cheap supply of ethylene. Plus, the major chemical manufacturers are located outside the Northeast region, with Dow's Midland plant (Michigan) and Dupont (Delaware) being two of the closest. Most of the large chemical companies are in the South, so whether the cracker is in the NP or KV doesn't make a large difference there.
So, don't worry, multiple other crackers are on their way. I predict Aither will build one in the Northern Panhandle, and if not them, someone else will. There is prime land along the Ohio up there and well-suited for a cracker (just not the size Shell wanted to build). I also think a company (hint: Braskem) will build one in Wood County, which will approach the magnitude of the Shell facility. So, when it is said and done, I think you will have the Shell facility, and Aither one, and maybe one other in the NP (and WPA/EOH), one in the MOV (Wood County), and one in the KV (Institute). So when it's all said and done, WV might have three crackers before the next decade. These are multibillion dollar companies and planning for these facilities takes YEARS. I think we'll hear some good news, though, before next summer.
Oh, and, just for Chris - the world's first cracker was built in Clendenin, so there's that!
Lets face it though, the company picked to build where they are already located. Its not an out of state company wanting to build in WV, it's a Charleston company. Plus Charleston's industry isn't "unrelated" to natural gas. In fact, natural gas fits quite well with the chemical industry and the products made here. Several gas companies are already located here, and as others have mentioned our transportation network is better here. Charleston also is close enough that it wouldn't be a big deal. And the only thing that the state gov could do is tell them they had to build here, which I highly doubt they could or would do!
Yes, yes, yes, partly, and no.
It is a Charleston and a West Virginia company. Some of the industry there is related to natural gas. The transportation system is not better except for rail. In fact, the 9 feet draught of the Kanawha accomodates much smaller barges than can use the Ohio. And, no... state government could have, and should have pushed for a West Virginia location regardless of whether in Marshall or Kanawha counties. Politics, and regional bickering, have long harmed our state in a major way.
It is far more efficient to locate a cracker near the wet gas fields, facilitating transport of the various gas products to several locations, most of them much closer to Marshall county. That would include transport to Kanawha for downstream industries. State government focusing its push almost exclusively on Kanawha probably killed the major Shell idea for the State. They simply chose to locate in another area close to the wet gas fields in nearby Pennsylvania... even closer to the final markets for those products and with even better transport availability than anyplace in West Virginia.
I don't blame the Charleston company for wanting their plant. I blame state government for their position on the matter. There is already a gas fractionation facility being built in Marshall County at a cost of well over $1 billion. A cracker is a natural compliment to that, and there is ample land available away from densely populated areas that is suitable for such development. The State of West Virginia should be all over that situation. Instead, they are sitting tight fearing the development because it might lead to destabilizing their political status quo. They are failing the people at every turn.
Personally, and in my opinion, Charleston is absolutely a natural for location of many downstream natural gas related industries employing thousands. A cracker facility is not a natural there though. And, even though it also isn't a natural for one due to remote location from raw materials, Huntington would be better suited than Charleston because of ready access to Ohio River product transport.
As for being close to the gas, yes, it is smart to be close to the shale. However, it isn't like Charleston is in Wyoming. Charleston is, while not at its heart, within the Marcellus Shale formation, within the Huron and Berea formations, and next to the Utica formation. In any event, MarkWest will be providing the ethane via pipeline, I believe, so transportation costs will be relatively small. Currently, the ethane from Marcellus gas is being sent to Louisiana, Texas, and Canada, so I don't think those companies would grumble sending ethane to Charleston.
Markets? The primary markets would be secondary chemical companies, especially plastics companies. There are plenty of customers in the Kanawha and lower Ohio Valleys (Dow, Dupont, Sabic, Kraton, etc.) that would love a steady, cheap supply of ethylene. Plus, the major chemical manufacturers are located outside the Northeast region, with Dow's Midland plant (Michigan) and Dupont (Delaware) being two of the closest. Most of the large chemical companies are in the South, so whether the cracker is in the NP or KV doesn't make a large difference there.
Yes, because there are no closer alternatives and the infrastructure doesnt exist. Once there is a closer plant they wont be sent so far. Same issue with Charleston. All the gas from Northern WV will go to PA. It will only go to Charleston if there is not enough capacity for the closer PA plant. So the plant in Charleston might work assuming that is the case until another plant is built closer in Northern WV, PA, or Ohio. Then the Charleston plant will be defeated by the market. The location makes NO business sense.
The primary market for natural gas is not Kanawha county and the Ohio river valley. It isnt even in the top 10 for the region. Charleston is in the middle of a small isolated area. It is a very small market. Nor is charleston close to any attractive markets in the south. Again the move makes NO sense.
Charleston, which controls WV politics, is just trying to force the industry to be located in the Charleston area. It is making itself an unnessecary middleman. This type of plan already cost the state a much bigger plant.
Someone needs to start doing some fact checking before they spout off inaccuracies. There are almost 600,000 residents in the combined Charleston-Huntington MSA. So no, it's not a small, isolated area like one poster i know wishes it were. That is the largest metro region in the state and its not even close.
And i continue to see the use of generalizations such as calling everything the govt does as "Charleston". Do some posters even realize there is a City of Charleston, and there is Kanawha County. But within the city limits, yes there happens to be the state govt. All of this is not one and the same. I figured it was pretty cut and dry but I guess some people just like to generalize everything because they get lazy or they are really that uninformed.
I bet a lot of folks that read this forum are embarrassed by some of the stuff they read by people that represent where they are from. I know I would be.
Someone needs to start doing some fact checking before they spout off inaccuracies. There are almost 600,000 residents in the combined Charleston-Huntington MSA. So no, it's not a small, isolated area like one poster i know wishes it were. That is the largest metro region in the state and its not even close.
And i continue to see the use of generalizations such as calling everything the govt does as "Charleston". Do some posters even realize there is a City of Charleston, and there is Kanawha County. But within the city limits, yes there happens to be the state govt. All of this is not one and the same. I figured it was pretty cut and dry but I guess some people just like to generalize everything because they get lazy or they are really that uninformed.
I bet a lot of folks that read this forum are embarrassed by some of the stuff they read by people that represent where they are from. I know I would be.
Yes, it is small. 600,000 is not many people, and when you consider how HUGE this metro area is it makes it seem even smaller. There are smaller land areas with millions of people. It is small and not near any real metro area. It is the biggest metro area solely in the state but Martinsburg and Morgantown have larger metro areas expanding out of the state, and it is irrelevent. It is like being the tallest midget in a midget contest. The tallest midget is still a midget at the end of the day.
Silk it is nothing against Charleston, it is like how people call the Federal government Washington. It comes with the territory. There is a corrupt and incompotent state government that gets power through a powerful political machine, located in Charleston that gets its support mainly from Kanawa county and the surrounding area because they give the people in these areas handouts.
Some of the stuff in this forum is embarrassing. The support for a cracker facility in the middle of nowhere, far away from the actual industry, just because it will give their town a short term economic boost at the expense of a long lose for the whole state. It shames me that people throw common sense out the door to wage their regional vendettas and beg for stupid handouts from the state.
In the long run, a company will build a manufacturing facility (in this case a cracker) where they think they can get the best return on their investment. After all, that is their commitment to their shareholders. Tax incentives, labor costs, distance to market, building costs, and utility costs are all parts of the equation, but each is only a part. These manufacturing facilities are similar to chemical plants or refineries in that they need steam, lots of water, compressed air, gaseous nitrogen, and high voltage 3-phase electricity. If they have to build a steam plant, air compressors, nitrogen generators, etc., the construction costs are much higher than if these things already exist, as they do at Institute. The existence of these thing would surely outweigh any tax incentive. BTW, I see local news from Charleston every day and I've seen nothing about any incentives to build in the Kanawha Valley as opposed to any other site in WV. There are chemical plants in or near Parkersburg, New Martinsville, Point Pleasant, and others where all these facilities also exist. I would assume that these same features would be available at a coal fired power plant, but I can't say for sure. I'd sure like to see some evidence that corruption influenced the business decisions in this case. Note: I'm not saying it didn't, but I do say it is unfair to make statements that have no support. If corruption is present, show it.
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This craker plant is actually better for the state! Plus, its close enough to shale gas that its in an acceptable place. Charleston is close enough, and the facilities are already here, transportation is already here, and obviously this company wants to build here and not there. If you can show me where the state is helping subsidize this, then maybe I'll reconsider, but fact is that it isn't.
