From Don Strimbeck's daily news summary.
JBK
Grants offered to study impact of Marcellus shale drilling
By Kim Leonard PITTSBURGH TRIBUNE-REVIEW Tuesday, December 21, 2010
The Colcom Foundation is offering nonprofit organizations $1 million in grants to study Marcellus shale development, and provide lessons and advice about environmentally sound natural gas drilling practices.
Amid controversy and mixed messages about the effects of well-drilling, "Who can you trust? There is a great deal at stake," said John F. Rohe, vice president of philanthropy for the Downtown-based foundation that focuses on conservation and the effects of overpopulation.
Colcom announced its Marcellus Environmental Fund on Monday to address the "accelerating environmental impact" of drillers boring into the deep Marcellus layer and fracturing shale to extract gas.
"The foundation would like to see a higher sense of trustworthiness and integrity" as drilling expands, Rohe said. The main question is whether the industry follows safe practices, or whether Western Pennsylvania might repeat one of its past mistakes, such as uncontrolled coal mining, he said. Colcom has funded cleanups of old mining sites.
Applications can be submitted until Jan. 14 for grants to be given out in February. A second round of proposals is due March 14, for awards to be distributed in May.
The foundation, created by the late Cordelia Scaife May, hasn't specified a number of grants, or amounts to be given out. Money will go toward public education, environmental monitoring and identifying best practices for the industry, for example.
"This is not designed to be anti-drilling," Rohe said of the grants. "Possibly, the primary beneficiaries of this fund are the responsible drillers."
Kathryn Z. Klaber, executive director of drilling industry trade group the Marcellus Shale Coalition, said yesterday the industry "recognizes that an educated citizen and landowner are the best partners in developing this clean-burning, job-creating resource."
Working with regulators and others, gas drillers have "enhanced well-casing standards to protect drinking water and backed a permitting fees increase, enabling DEP to hire additional inspectors at no cost to the taxpayer. To the degree that other organizations seek to contribute to this fact-based debate, we encourage that."
Kim Leonard can be reached at kleonard@tribweb.com or 412-380-5606.
Pittsburgh Tribune Review
Chemical plant courted for West Virginia
By Bloomberg News
Tuesday, December 21, 2010
Bayer AG, the world's largest maker of polyurethane, is trying to persuade potential investors to build a chemical plant on company sites in West Virginia using ethane from adjacent shale-gas deposits.
The Leverkusen, Germany-based company is in talks to lease or sell unused parts of two sites covering 1,460 acres for construction of a plant known as a cracker, Bryan Iams, a spokesman for Bayer in Pittsburgh, said yesterday. The cracker would convert ethane into ethylene, a key ingredient in plastics such as polyethylene.
The Bayer properties sit atop the Marcellus shale formation, which according to Energy Department estimates is the largest known U.S. gas field. New drilling techniques are boosting production from shale formations, keeping U.S. prices of natural-gas low relative to oil. That's prompted chemical makers Dow Chemical Co., Eastman Chemical Co. and Chevron Phillips Chemical Co. to use more gas as a raw material.
Chevron Phillips received preliminary approval last month from Texas regulators to reopen a cracker shut in 2008 at its Sweeny complex, according to a filing on the Texas Commission on Environmental Quality's website. Eastman is opening a mothballed cracker in Longview, Texas, because it says low-cost gas has made the United States more competitive. Dow plans to use 30 percent more ethane, a component of natural gas, at its Gulf Coast crackers.
"The burning question is what to do with all the ethane coming out of the Marcellus shale," said John Schirra, a senior account manager at U.S. chemical maker Ashland Inc.
The Marcellus formation in Western Pennsylvania and northern West Virginia is unusually rich in natural-gas liquids including ethane, said Dennis Yablonsky, chief executive officer of the Allegheny Conference, a Pittsburgh-based economic development group. The region has no crackers, he said.
"We are unabashedly trying to attract" the chemical industry, Yablonsky said in a telephone interview. "We have had positive feedback that the general premise does make sense."
Proposals for getting Marcellus gas to the chemical industry involve piping it to crackers on the Gulf Coast, where the country's chemical industry is concentrated.
Pittsburgh Chemical Day, an annual conference that brings together companies such as Bayer, Eastman and PPG Industries Inc., will focus its May 10 event on using Marcellus shale gas to bolster investment in the regional chemical industry, said Schirra, an organizer of the meeting.
Bayer's sites in New Martinsville and Institute, W.Va., have access to rail, water and road transportation, Iams said. An ethylene plant adjacent to Bayer's West Virginia plastics or pesticide plants would cut its raw-materials costs and draw more manufacturers to the area, he said.
It would cost at least $500 million and require about 4 years to build an ethane cracker capable of producing 1 million metric tons of ethylene a year, Hassan Ahmed, a New York-based analyst at Alembic Global Advisors, said in a telephone interview.