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Shale gas development in W.Va. depends on meeting critical infrastructure needs

“Regulations and policies around natural gas production and infrastructure development will ultimately determine whether shale gas becomes the ‘game changer’ everyone hopes for,”ACC’s Owen Kean said in testimony before the U.S. Senate Committee on Commerce, Science and Transportation last week.

The bipartisan hearing, “Shale Gas Development: Meeting The Transportation, Pipeline, And Rail Needs To Renew American Manufacturing,” covered a variety of issues for the state of West Virginia, but the word of the day was “infrastructure.”

Committee chairman John D. (Jay) Rockefeller (D-WVA) lauded the potential of natural gas if paired with the proper roads, rail, and transportation needs. The chairman noted that “larger infrastructure needs are of equal importance to gas extraction itself,” adding that those areas “touch our communities and define our success.”

Following Rockefeller, Kean said that before we can harness the power of ethane, states must invest in proper infrastructure to be able to separate ethane and other liquids from the gas supply and then ship it to markets:

[quote]Today, the existing infrastructure and pipeline capacity is not adequate to move ethane to market. As a result, much of the ethane-rich shale gas in the Marcellus is shut in. Fortunately, businesses are moving quickly to bring ethane infrastructure to the Marcellus and we expect to see ethane moving to market by the end of next year.[/quote]

According to a recent ACC study, a $3.2. billion investment in an ethylene production complex in West Virginia would generate $4.8 billion in additional chemical industry output and bring the state’s industry revenues to more than $13 billion.

West Virginia already has excellent road, rail and river transportation networks and is within 500 miles of the primary U.S. markets for petrochemicals and plastics. But with critical improvements to infrastructure and additional support from the state and federal government, natural gas could yield vast economic benefits and create more than 12,000 jobs in the Mountain State.

Public policies could also shape the future of infrastructure development. In a statement on Friday, ACC said that, “Natural gas and natural gas liquids such as ethane require separate infrastructure systems, and we encourage the administration to consider the implications as it coordinates policy.”

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