Appalachian Storage Hub

Latest News

August 2021: On August 30, the Ohio Department of Natural Resources (ODNR) issued permits to Powhatan Salt Company/Mountaineer NGL Storage for three planned solution mining wells in Monroe County. The three salt caverns will store NGLs (natural gas liquids, mainly ethane) to potentially be used by ethane crackers including the Shell cracker near Pittsburgh and potentially a second ethane cracker proposed by PTT Global Chemical in Belmont County. The salt caverns can also be used to store hydrogen (H2). Full story here.
January 2021: There is some concern over an Appalachian storage hub that could soon be built in Monroe County. Mountaineer NGL Storage plans to build a natural gas storage facility on a 200-acre site just north of Clarington. It would support the potential ethane cracker plant project, however there’s some concern raised in the community. Full story here.

Background on Appalachian Storage Hub

The Appalachian Storage Hub (ASH), also known as the Appalachian Ethane (or NGL) Storage Hub, is a proposed mega-infrastructure project which could greatly expand unconventional oil and gas drilling (fracking) in a multi-state region including West Virginia, Pennsylvania, Ohio and Kentucky.

In December, 2018, the U.S. Department of Energy (DOE) published a Report to Congress: Ethane Storage and Distribution Hub in the United States. The report highlighted the potential in Appalachia for the development of a new ethane hub based on what was characterized as “the tremendous low-cost resource from the Marcellus and Utica shales, and the accompanying security and reliability benefits derived from geographic diversity in the nation’s petrochemicals manufacturing base.”

The report outlines sufficient global need, and enough regional resources, for the U.S. to gain a significant share of the global petrochemical market. As of 2018, the United States is now the top producer of oil and natural gas in the world, with an additional increase of natural gas liquids (NGLs), including ethane. Some NGLs are burned for space heating and cooking while others are blended into vehicle fuel. Ethane is also used as a feedstock for petrochemical manufacturing. Ethane production in the Appalachian basin is projected to continue its rapid growth through 2025 to a total of 640,000 barrels per day, more than 20 times greater than just 5 years ago.

The Appalachian region has experienced near-exponential growth in natural gas production, and that production is expected to increase for decades to come. The region is home to the Marcellus and Utica shale formations, and were it an independent country, Appalachia would be the third-largest natural gas producer in the world.

According to the Energy Information Administration, production in Ohio, Pennsylvania, and West Virginia has increased so rapidly that their combined share of total U.S. natural gas production has jumped from only 2% in 2008 to 27% in 2017. In addition, natural gas liquids (NGLs) processing and fractionating capacity in Appalachia has grown quickly to match this increase in natural gas production. However, the Appalachian region currently lacks other physical infrastructure for a “hub” that connect supply and demand sources, including storage for the liquids.

This Report to Congress examines the potential for a hub by comparing it to existing ones that already service the Gulf Coast and Permian Basin, which account for most of the U.S. growth in NGLs outside of Appalachia. In addition, market analysis from the report emphasizes that the development of an Appalachian hub may offer a competitive advantage for the U.S. to gain global petrochemical market share while not being in conflict with Gulf Coast expansion. The report explains that a new Appalachian hub would enhance the geographic diversity of the vital US petrochemical industrial sector, supporting U.S. economic security.

The full report can be found HERE.

In January, 2019, West Virginia’s Governor Jim Justice stated this facility was the top economic priority for his office.

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