WHITE SULPHUR SPRINGS - Even though the Shell Oil Co. recently announced it wants to build a multi-billion-dollar ethane cracker in Pennsylvania, Gov. Earl Ray Tomblin said he remains optimistic West Virginia will attract at least one of the giant factories.
"I feel very confident we will land a cracker plant in West Virginia," Tomblin told more than 200 business leaders at The Greenbrier on Monday. "Also, there are other, smaller versions I think will spring up."
Kurt Dettinger, Tomblin's general counsel, expanded on Tomblin's remarks.
"The West Virginia Development Office is in discussions with investors seeking to build a world-class cracker in the region," Dettinger said. "The total investment would exceed $4 billion."
He added that Keith Burdette, the state secretary of commerce and head of the development office, is in touch with the investors almost daily.
"The West Virginia Development Office is also monitoring a potential investment in a scalable ethane cracker that would generate an approximate $300 million investment that utilizes a different process," Dettinger said.
Since 2008 more than $2 billion has been invested in drilling wells in the Marcellus Shale in West Virginia and "the future drilling investment potential based on existing horizontal Marcellus well permits approaches $5.8 billion," Dettinger said.
Meanwhile, so-called midstream operators Dominion Hope, MarkWest and Caiman have invested almost $3 billion in West Virginia to process the natural gas being produced in the Northern Panhandle region, he said.
The industry is creating jobs and having a positive impact, he said.
"In Marshall County, assessed values for property taxes are up 17.5 percent. The county has been able to reduce the levy rate 13.4 percent. This is just one example of how this investment impacts local economies."
U.S. Sen. Joe Manchin said he's been keeping abreast of natural gas developments in the state. Regarding crackers, "There's another one on the top burner," he said.
Manchin said that based on what he had learned about Shell's needs and plans, the chance that Shell would put a cracker in West Virginia "was always to me kind of marginal."
There are one or two more cracker plant plans that are credible and at least one of them, if it comes to pass, "will probably develop quicker," he said.
Tomblin, Dettinger and Manchin were among the top speakers at a Marcellus and Utica Shale Conference and Expo at The Greenbrier. The three-day event, which concludes today, has drawn about 200 industry and government leaders.
Randy Huffman, secretary of the West Virginia Department of Environmental Protection, discussed the state's efforts to regulate the industry.
"Horizontal drilling is a very interesting thing," he said, speaking to the drillers. "In 2006, you applied for zero horizontal drilling permits. You applied for 11 in 2007, over 300 in 2008, over 410 in 2010 and nearly 500 in 2011."
Huffman noted that after the Legislature failed to pass comprehensive legislation in 2010, Gov. Tomblin issued emergency rules to govern the industry. And in late 2011 the Legislature did pass comprehensive legislation.
The state decided early on that it would not apply any regulations on the industry retroactively, Huffman said. Consequently, "we have three sets of rules we're using, trying to regulate the industry."