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Report: Mine Reclamation Done Well Could Be Catalyst For Regional ‘Just Transition’

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A patch of miscanthus towers above other grasses on the former mine site. Photo: Brittany Patterson/Ohio Valley ReSource

A new report by a group of regional advocacy organizations argues reclaiming abandoned mine lands could be a key factor in Appalachia’s transition from coal.

In its second annual report, released Thursday, the Reclaiming Appalachia Coalition, highlighted 19 reclamation projects in West Virginia, Ohio, Virginia and Kentucky. They run the gamut from installing solar on abandoned mine lands to boosting outdoor recreation opportunities like biking and hiking trails. 

“Although funding streams may change, the idea and the need for a restoration economy is not going away,” said Joey James, with Downstream Strategies. “We’re excited to work within a growing community of practice to accelerate the adoption of innovative approaches to land restoration and redevelopment that contribute meaningfully to the region’s economy.”

The group’s goal is to support and promote innovative reclamation projects — projects that can be replicated, involve local communities, and are financially viable after grant funding runs out. 

“We see this limited pot of money is available for innovative land reuse, and we want to ensure those dollars are efficiently and effectively spent,” James said. 

The new report, “A New Horizon: Innovative Reclamation for a Just Transition,” includes both new projects and projects that recently were awarded state and federal funding, including a combined $15.8 million in federal Abandoned Mine Land Pilot program funding.

In West Virginia, one new project slated to be built near old mine lands would turn food waste from West Virginia University into compost. The facility would employ those in recovery from substance use addiction. The project is slated to cost more than $3 million, but developers estimate would bring more than $7 million in economic impact — $2.4 million in payroll alone — and employ 54 people across multiple sectors. 

The group said reauthorization of the Abandoned Mine Land (AML) program, administered by the Office of Surface Mining Reclamation and Enforcement, is critical to continue this work. It also advocates for more oversight of projects. 

“As the first AML Pilot projects move from these big check moments, to construction and then on to operation, we across the region need to objectively assess the effectiveness of projects that are receiving this very limited funding and intervene where necessary, both within individual projects and organizations that are receiving money,” James said. 

The group expects to begin collecting data on economic impact of some funded projects beginning next year. 

The coalition’s members include Appalachian Voices in Virginia, Appalachian Citizens’ Law Center in Kentucky, Coalfield Development Corporation in West Virginia, Rural Action in Ohio, and Downstream Strategies, based in West Virginia.

This article was originally published by West Virginia Public Broadcasting.

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Portal 31: How a Closed Mine Opened New Prospects for One Coal Town

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Devin Mefford emerges from Portal 31. Photo: Brittany Patterson/OVR

This article was originally published by the Ohio Valley ReSource.

Devin Mefford is sitting in the squat metal buggy of a modified mantrip, the train-like shuttle coal miners use to travel underground. Mefford is dressed for work, in a hardhat and a navy shirt and pants with lime green reflective stripes.

It’s a uniform his father and grandfather — both Kentucky coal miners — would be familiar with.

Mefford does go into a mine every day, but not for the coal. He’s the tour guide at Portal 31, a train ride through a once-operational coal mine in Harlan County.

“People are amazed,” the 21-year-old says, gesturing to the dark mine entrance behind him.

Portal 31 tour guide Devin Mefford. Photo: Brittany Patterson/OVR

Portal 31 first opened in 1917. A subsidiary of U.S. Steel operated the mine and built the nearby community of Lynch, which was at the time the world’s largest coal camp. At its height, 10,000 people lived in the community, including a diverse immigrant population from more than 30 countries.

When it closed its doors in 1963, Portal 31 had produced more than 120 million tons of coal. More than 40 years later, in 2009, the mine reopened — this time to tourists.

For 35 minutes visitors ride the rail cars, often in pitch darkness, on a journey not just through the mine, but back in time. The drawling voice of an actor playing a miner named Mike Mackenzie, or Mac, narrates.

“We’re going to visit the miners and see how it’s changed over the years,” he says. “First stop, 1919.”

An animatronic miner materializes out of the darkness. Another actor gives voice to an Italian immigrant named Joseph, who recounts what it was like for the thousands of people who came to work in the mines in the early 1900s. Next to his lifelike form is a robotic mule and chirping canary.

“The mine she’s cool and safe,” he says. “You will see to that won’t you cantante. As long as I can hear your song I know I’m safe.”

Visitors hear what it was like to mine for coal before and after mechanization. They also learn about Harlan County’s bloody conflicts over union organizing.

“This is a story that never needs to die. It’s a story that needs to be told,” Nick Sturgill, director of Portal 31 said. “People need to understand what these guys went through, but they also need to understand how prosperous a place this was at one time — what coal not only did for this city, but for this region, for this country, for this entire world.”

He said about 5,000 visitors from around the world take the ride under Black Mountain each year. It’s a bright spot for Lynch, which today is home to just a few hundred residents.

Like many former mining communities, in recent years Lynch and neighboring towns have turned their sights on attracting tourists. It’s often a costly endeavor, but in recent years the federal government has expanded its support for repurposing old mine lands as new economic engines, including to draw new visitors.

Federal Role

Portal 31 was part of that effort. In 2018, the attraction was awarded a $2.55 million Abandoned Mine Land Pilot grant. The funding will be used to update the ride as well as nearby historic buildings for use as retail and office space. Some of the money is slated to go to a new parking lot and scenic overlook at nearby Black Mountain.

“The main outlook on the AML grant is to really just be a shot in the arm for all of Lynch as well as Harlan County,” Sturgill said.

Central Appalachia has thousands of acres of abandoned mine sites that can threaten local economies and people’s health and safety. In 1977, Congress created the Abandoned Mine Land Reclamation Program to clean them up. The funds come from fees paid by active coal mine operators on each ton of coal mined. The fee and authorization of the AML Program is set to expire in 2021 without Congressional action.

The AML Program chiefly provides funding for reclamation.  In the last five years, federal support has grown for a slightly different approach — going beyond merely sealing mine portals and treating polluted water to supporting projects that could grow local economies.

The Appalachian Regional Commission in 2015 began investing in coal-impacted communities through Partnerships for Opportunity and Workforce and Economic Revitalization, or POWER Initiative. Congress appropriated money from the U.S. Treasury to create the AML Pilot program in 2016, aimed at not only boosting reclamation work in the highest-need Appalachian states, but promoting projects that spur economic development and growth on abandoned mine lands.

“There’s significant economic benefits that communities can get from embracing mine reclamation,” said Joey James, with the Reclaiming Appalachia Coalition, which advocates for sustainable reclamation investment. “There’s also opportunities to repower some of these sites that were once the lifeblood of these communities.”

James, who is a senior strategist at West Virginia-based Downstream Strategies, said projects with federal backing can attract other investors looking to make an impact.

“While these federal programs are really, really important, and we need to have them, I think what the AML Pilot program does is it offers an opportunity to develop enterprises on former mine sites that might pull private capital and create models for redeveloping and reusing mine sites that won’t rely entirely on federal funding,” he said.

Another federal proposal, the RECLAIM Act, would accelerate reclamation of abandoned mine land by dispersing $1 billion of Abandoned Mine Land funds over a 5-year period with an eye toward economic development. That bill has not been passed by Congress despite bipartisan support.

Critics argue the millions poured into these programs have failed to produce the desired outcomes. Some efforts planting lavender or apple trees on old strip mines have floundered. James said it’s important to objectively assess the effectiveness of projects receiving federal funding.

“If states are investing in projects that aren’t providing that opportunity in the future, we need to think of how we can be better,” he said.

Growing Pride

Back inside Portal 31, the mantrip snakes its way back toward daylight.

A group of visitors from South Carolina is milling around in the small gift shop. They’re visiting the area on a mission trip. A gaggle of middle school-aged kids excitedly share what they learned.

“We learned how difficult it was and how dangerous it is for them,” one says. Another adds his amazement that Portal 31 holds the record for most coal mined in a single day — a record set in 1923.

A scene from inside Portal 31. Photo: Brittany Patterson/OVR

Mefford, the guide, takes questions at the end of the tour. He says the most common one he’s asked is if coal is coming back.

“In all honesty, coal mining is a thing of the past, and it’s sad to say that for small towns like mine,” he says.

But he adds that makes Portal 31, and federal investment into both preserving and showcasing Kentucky’s coal heritage, even more important.

“Every person in this community deserves to have something to be proud of, and that’s what we do here,” he said.

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Trump Visits Shell Plastics Facility, Touts Petrochemical Future For Appalachia

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President Trump speaks to workers at a Shell facility in Pennsylvania. Photo: Via White House video of event

This article was originally published by the Ohio Valley ReSource.

President Donald Trump Tuesday toured Shell Chemical’s soon-to-be completed ethane cracker complex in Monaca, Pennsylvania, to tout his administration’s commitment to expanding energy production. The facility is part of what industry boosters hope will be a new plastics and chemical manufacturing base in the upper Ohio Valley, but many residents here worry about the heat-trapping gases and plastic waste such an industry would produce.

Speaking to a crowd of a few thousand construction workers, Trump said investment in plastics and other petrochemical plants in the Ohio Valley could greatly benefit the region. He touted the vast reserves of natural gas and natural gas liquids contained in the Marcellus Shale, which extends throughout much of the Appalachian basin.

“This is an incredible region; you’re sitting on top of something special,” Trump said in a wide-ranging, and at times rambling, speech. “It’s all fueled by the greatest treasure on the planet, American energy, and we don’t want people taking that away from us.”

The Shell facility, located about 30 miles northwest of Pittsburgh, will use extremely high temperatures to convert natural gas liquids, including ethane, from the Marcellus Shale into smaller molecules used in plastics and chemical manufacturing.

Once completed, the facility will include an ethylene cracker and polyethylene production complex slated to produce 1.6 million tons of ethylene each year and permanently employ about 600 workers, according to the company.

In his speech, Trump noted additional investments are being made in Ohio to build out the region’s petrochemical industry.

“This is just the beginning,” Trump said. “My administration is clearing the way for other massive multi-billion dollar investments.”

Thailand-based PTT Global Chemical and partner South Korea’s Daelim Industrial Co. is in the permitting process for a cracker plant in Belmont County, Ohio, across the Ohio River from West Virginia.

Pollution Concerns

Outside the Shell facility protesters boycotted the president’s visit.

Environmental and public health groups argue cracker plants are huge pollution emitters that threaten the climate, environment, and the health of residents living in the region. Investment into plastics manufacturing in the Ohio Valley comes at a time when some municipalities and countries are banning single-use plastics due to environmental concerns.

“The scheme for a petrochemical hub in the Ohio Valley is yesterday’s answer to today’s problems, and it ignores tomorrow’s crises,” Mary Wildfire, a West Virginia resident and volunteer with the Ohio Valley Environmental Coalition, said in a press release. “It ignores the rapidly increasing problem of plastic waste choking our oceans and infiltrating our bodies—and the rapidly increasing movement away from plastic. And it ignores the steady movement toward cleaner, sustainable energy sources like wind and solar.”

Shell’s Beaver County facility is permitted to release up to 2.25 million tons of greenhouse gas pollution annually, or the equivalent of the emissions from nearly 480,000 cars.

A report released earlier this year by a coalition of environmental groups estimates production and incineration of plastic in 2019 will add more than 850 million metric tons of greenhouse gases to the atmosphere, or equal to the pollution of building 189 new coal-fired power plants.

That figure will rise substantially over the next few decades as the demand for single-use plastic continues to grow, the report finds. By 2050, emissions from the entire plastics life cycle could account for as much as 14 percent of the earth’s entire remaining carbon budget.

A cracker plant converts natural gas constituents into manufacturing products. Graphic: Alexandra Kanik/Ohio Valley ReSource

“A Petrochemical Renaissance”

Trump’s visit comes weeks after a top Department of Energy official testified in front of members of the West Virginia Legislature that the federal government is prioritizing expanding the petrochemical industry in Appalachia.

“Federal efforts are strong and continue to gain momentum,” Steven Winberg, DOE’s assistant secretary for fossil energy, told the Joint Committee on Natural Gas Development. “We also recognize that others are doing a lot and we believe that together we can make this Appalachian petrochemical renaissance happen for the benefit of the industry, the region and the country.”

Winberg urged West Virginia lawmakers to invest in preparing sites for possible cracker development, characterizing them as “anchor facilities.”

The region’s third cracker plant, proposed for Parkersburg, West Virginia, may be in doubt. Michael Graney, executive director of the West Virginia Development Office, told lawmakers that developer Braskem has pulled out of the project.

Another key component to attracting plastics and petrochemical manufacturing to the Ohio Valley is creating storage for natural gas liquids. Officials in the region have been working on the so-called Appalachian Storage and Trading Hub for nearly a decade.

The hub cleared its first major hurdle last year when it got approval for the first of two phases for a $1.9 billion U.S. Department of Energy loan.

Earlier this year, a coalition of more than 100 advocacy groups led by Food & Water Watch sent a letter to the chair of the House Appropriations Committee challenging whether it’s legal for DOE to grant a federal loan guarantee to the fossil-fuel-based project.

In June, the U.S. House of Representatives approved an amendment to an appropriations bill that would clarify that DOE could only grant loans for “clean energy projects.” The measure has not been taken up by the U.S. Senate.

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West Virginia Bets Big on Plastics, and on Backing of Trump Administration

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Wheeling, West Virginia, lies on a stretch of rural counties along the Ohio River that form the largest natural gas field in the world and helped Donald Trump win the state in 2016. Photo: Michael S. Williamson/The Washington Post via Getty Images

The state’s leaders want a federal loan guarantee to build a giant chemical storage plant that could cost as much as $10 billion.

West Virginia’s industrial might has faded, but as 2020 approaches, the state has two resources that could be crucial to President Donald Trump as he seeks reelection and tries to make good on his pledge of “American energy dominance” — Republican votes and abundant natural gas.

It was a stretch of rural counties along the Ohio River in West Virginia, Ohio and Pennsylvania that form the largest natural gas field in the world and helped Trump win the states in 2016.

West Virginia’s elected leaders see the vast reserves as a path to renewed political and economic relevance for the Mountain State, which they envision rivaling the Gulf Coast as a center for processing natural gas and producing plastics.

And to make that a reality, the state’s top officials have lined up behind a plan to spend as much as $10 billion to build a mammoth underground storage facility — big enough to hold the U.S. Capitol complex, or 10 million barrels of the liquid byproducts used in plastics manufacturing.

By providing a sizable and stable storehouse for ethane and other so-called gas liquids, the facility would, its proponents say, encourage the expansion of a chemical production corridor that is emerging along the upper Ohio River and would help bring thousands of jobs to a region that has seen its industrial moorings slip away over the past two generations.

The prospect of an energy jobs bonanza in a politically vital state stirred the interest of the White House. A senior Energy Department manager has been assigned to work on the project, known as the Appalachian Storage and Trading Hub. In April, the president issued an executive order on energy that encouraged “opportunities, through the federal government or otherwise, to promote economic growth of the Appalachian region, including growth of petrochemical and other industries.” And the president’s newest budget proposal includes funds to study the region’s gas-related industrial potential.

But a ProPublica examination has found that the proposed storage facility would be far larger than the region could support and that questions about its cost, its viability and its environmental risks have been overshadowed by a public relations strategy heavy on the politics of jobs and light on the economics of energy policy.

“The scale of the Appalachian hub is out of line with what industry needs or will require in the region,” said Michael Tritt, president of Lane Power and Energy Solutions, a Houston-based construction company that designs and builds energy storage caverns.

The Trump administration’s relations with China and Russia are adding to the questions about the hub. China had agreed to invest tens of billions of dollars in West Virginia’s natural gas industry but now is embroiled in a trade war with Trump. And American Ethane, a Houston-based company financed by three Russian businessmen, has signed 20-year contracts to send ethane produced in the United States to China, which could raise prices and weaken demand for the facility proposed for West Virginia.

Far from being dissuaded, state leaders, led by Sen. Joe Manchin III, are pressing forward, talking up the project and perhaps most significantly trying to secure a $1.9 billion federal loan guarantee that could attract billions of dollars in private investment.

If the hub’s developers succeed, taxpayers could be on the hook for a big piece of any failure. The federal loan guarantee sought for the hub is nearly four times as large as a guarantee awarded more than a decade ago to Solyndra, the California solar firm that collapsed in 2011. “This whole project is a gamble,” said Dustin White, project coordinator with the Ohio Valley Environmental Coalition, an environmental group in Huntington, West Virginia. “Billions of dollars could go up in smoke. We just need to stop it now.”

Banks, though, would be in line for tens of millions of dollars in finance fees. “If that project gets a federal loan guarantee, banks will be lining up 10 deep,” said James Cutler, an energy industry investor and veteran chemical plant builder from Houston. “Anybody who gets involved gets 1.5 to 2 percent in fees just for getting the deals together. If you have a $4 billion, $5 billion project, that’s $80 million, $100 million.”

Other big winners could be Manchin, a Democrat, and Gov. Jim Justice, a Republican. The energy, construction and labor sectors contributed $841,591 to Manchin’s 2018 election campaign. Energy, finance, construction and labor contributed $169,600 to Justice’s 2016 campaign, according to Vote Smart, which tracks election campaign financing.

In an interview, Manchin said that he is looking to Energy Secretary Rick Perry for help in “streamlining” the loan review and that he is urging the Treasury Department to invoke national security concerns to halt American Ethane’s export plans.

John Houghtaling, the chief executive of American Ethane, said Manchin is wrong. “The national security threat is not exporting ethane to China,” Houghtaling said in an interview. “They need the gas. If they don’t get it from us they’ll get it from Russia and Qatar, people who don’t like us so much.”

Manchin, the ranking member of the Senate Energy and Natural Resources Committee, said the federal government has to intervene. If it doesn’t step in, the project is doomed, he said. “You can write off the storage hub for sure. You can write off everything.”


From its start where two tributaries meet at a wedge of parkland in Pittsburgh, the Ohio River surges north, then south, then west past high banks that have been the stage of every era of American industrial development. Thousands of feet below the river are thick layers of salt and seams of shale and hard rock that encompass eons of geological evolution.

Few regions of the country have been endowed with such a rich repository of water, land and minerals, or have seen natural resources so grossly mismanaged, than the three states and 50 counties along the first 180 miles of the Ohio. Forests fell to the mills that provided the first burst of manufacturing wealth in the 18th century and that produced gaping tracts that poured great gouts of mud into the river.

The nation’s first petrochemical complex emerged in the 1920s along the Kanawha River in Charleston, West Virginia, to tap salt caverns for brine to make chlorine. The air and water discharges from the plants sickened people and poisoned the river, an Ohio tributary.

Coal from mines in the three states fueled a vast metals manufacturing sector in the mid-20th century and generated wages and prosperity never seen before. When the mills shut down near the century’s end, they left miles of toxic contamination and a trail of industrial desolation.

In the late 20th century, state officials approved new strip mining practices that allowed companies to blast away at the summits of West Virginia mountains to gain easier access to coal seams. So-called mountaintop removal mining buried streams with rubble, pushed towns aside and, because of increased production efficiencies, accelerated the drain of coal mining jobs.

The aftermath of a mountaintop removal operation near Beckley, West Virginia. Photo: Michael S. Williamson/The Washington Post via Getty Images

Brian Anderson, a chemical engineer who is a West Virginia native and grandson of a coal miner, understands this frustrating history. In 2006, he joined West Virginia University’s faculty.

It was a striking year in the history of American energy development. New technology was starting to transform the oil and gas industry by giving developers the capacity to tap deep shale reserves around the country that were long known to contain gas and oil but were impractical to develop.

Two of those fuel-soaked shale formations, the Marcellus and the Utica, lie deep below the upper Ohio region. Directional drilling allowed developers to reach the shale, then turn the drill bit axis from perpendicular to longitudinal and lay pipes for a mile, sometimes two, through the thick shale seams. Hydraulic fracturing gave developers the capacity to pump, under ultrahigh pressure, millions of gallons of water mixed with chemicals and sand into wells to fracture the rock so that oil and gas would flow out.

The new production techniques solved the challenge that had bedeviled presidents from Richard Nixon to George W. Bush to make America “energy independent.” Because of directional drilling and hydrofracking, the U.S. is pumping a record 12 million barrels of oil a day, more than twice the production from a decade ago, and producing 38 trillion cubic feet of natural gas annually, more than any other country.

The wells are also yielding vast amounts of gas liquids, especially ethane, the basic feedstock for producing ethylene and polyethylene, which are used to manufacture plastic.

In Morgantown, Anderson was emerging as one of the university’s young stars, in large part because he had big ideas about the state’s energy reserves and its economy. He began talking about a hub mined from deep geologic salt or rock formations that would be capable of storing millions of barrels of natural gas liquids.

The concept has a working model in Mont Belvieu, Texas, where a hub that is capable of storing 240 million barrels of gas liquids in deep salt caverns has operated for nearly 70 years and is an important factor in the Gulf Coast’s development as the nation’s center of chemical manufacturing.

Anderson argued that such a hub would be the essential ingredient in a formula that West Virginia consistently failed to get right: how to generate durable prosperity and good jobs from an abundant homegrown resource — with, he insisted, scant harm to the environment. Without the hub, Anderson said, West Virginia would end up producing the raw materials to generate another state’s prosperity.

In 2014, Anderson established the West Virginia University Energy Institute, which he positioned as a platform to advance the hub idea.

The following year, the governors of Ohio, Pennsylvania and West Virginia formed the Tri-State Shale Coalition to pursue chemical manufacturing along the upper Ohio. The Appalachian Storage Hub was among the coalition’s top priorities.

It wasn’t until 2016, though, that the hub idea drew serious attention in Washington. That June, Shell announced it would build a plant in Monaca, Pennsylvania, 30 miles downriver from Pittsburgh, to convert 105,000 barrels of ethane a day to polyethylene for plastics manufacturing. The Energy Institute quickly assembled a team of geologists to study suitable deep salt and rock formations to build the storage hub.

Anderson and other leaders of West Virginia University opened negotiations with the Mid-Atlantic Technology, Research and Innovation Center, a nonprofit research firm in Charleston, to form the Appalachia Development Group, a partnership to develop the hub.

At a field hearing of the Senate Energy and Natural Resources Committee, held in Morgantown in August 2016, Anderson testified that “developing storage and transportation infrastructure is a critical pathway to developing the industry in the region.”

That November, Trump was elected. West Virginia’s two senators, Manchin and Shelley Moore Capito, a Republican, and Justice began opening pathways to secure the administration’s support.

Gov. Jim Justice at a rally with Trump on Aug. 3, 2017, in Huntington, West Virginia. Photo: Justin Merriman/Getty Images

With funding from Congress, the Energy Department launched a study of the feasibility of establishing an ethane storage and distribution hub in the upper Ohio region. Perry told a House committee the hub would do more than serve the region’s economic interests.

Citing damage from Hurricane Harvey, which disrupted the Gulf Coast chemical industry in 2017, Perry said that establishing another petrochemical hub outside vulnerable Louisiana and Texas “is a national security issue.”

“To develop that in another region of this country, the Appalachian basin, makes sense because you’re sitting on top of Marcellus and Utica, which are prolific gas fields,” Perry told the committee during the March 2018 hearing.

In November 2018, Perry appointed Anderson director of the National Energy Technology Laboratory, the federal government’s leading fossil energy research center. The following month, Perry’s department released its Appalachian hub study. The authors found that the hub “could provide benefits to the broader petrochemical and plastics industries” because ethane production in the upper Ohio region would increase to 640,000 barrels a day by 2025, about a third of expected national production, and almost triple the ethane production in 2017.

Manchin, meanwhile, guided the Appalachia Development Group to the Energy Department’s Loan Programs Office, which encourages innovative clean-energy technology by guaranteeing loans to develop and implement such projects.

The Appalachian Development Group is seeking a $1.9 billion guarantee, one of the largest ever considered by the federal government. Armed with favorable studies from the Energy Institute and American Chemistry Council, the Appalachian group cleared the first round of the application. But the next round presents a much bigger test.

Applicants are required to meet hundreds of specific design, planning, engineering, construction, environmental and finance criteria. The process typically takes years and costs tens of millions of dollars.

The Appalachian group also needs to sign contracts with companies that would use the hub, and it must raise roughly $1.4 billion more in private capital to satisfy the loan office’s financing requirements. Joe Bozada, the Appalachia Development Group’s chief financial officer, declined to discuss the group’s fundraising effort.

The most expensive project backed by the Loan Programs Office is $12 billion in guarantees for a new nuclear plant in Georgia that is three years overdue and projected to cost almost $30 billion — more than twice the initial price tag. And its most prominent loss was the $535 million guarantee, awarded in 2009, to finance the development of new electricity-generating panels manufactured by Solyndra, which collapsed two years later.

With its goal of reducing greenhouse gas emissions, the Loan Programs Office has rarely been a source of federal financing for fossil energy projects, such as the hub.

Some engineers who work in the industry say that the Appalachia hub does not appear to meet two basic criteria for the clean energy loan guarantee. It is not a one-of-a-kind project, nor is it especially innovative, the engineers say. Gas liquids storage hubs are common along the Gulf Coast, and another big one operates in Conway, Kansas.

“There’s nothing new about building and operating liquids storage caverns. They operate all over the country,” said Tritt, of Lane Power and Energy Solutions.

Steve Hedrick, the chief executive of the Appalachia Development Group, declined requests for an interview. Brian Mahar, an Energy Department spokesman, said his agency does not comment on loan applicants or applications.


The questions facing the Appalachian hub’s developer and government supporters underscore the financial and political challenges of such a vast undertaking.

Megaprojects typically take decades to design, finance and build. In this century, new refineries, big dams, huge mines and oil and gas pipelines come online under much different market and environmental conditions than when they were conceived. Some encounter ecological turmoil — floods, storms, earthquakes, tsunamis, wildfires — and political turbulence so severe that they don’t get started, are seriously delayed or fail midway through construction. The $7 billion Keystone XL pipeline to transport oil from Canada to Kansas is years overdue and facing significant public resistance along its route across the Great Plains. The cost and difficulty of building the nuclear Plant Vogtle in Georgia are increasing so much that its completion is in doubt.

Such pressure can fracture alliances crucial to development. Last year, West Virginia University and the state government broke with Hedrick and the Appalachia Development Group.

James Wood, interim director of the Energy Institute, who took over after Anderson’s departure, said the university and Hedrick were to share the corporate leadership and management of Appalachia Development Group. But when Hedrick filed the incorporation papers in Delaware in July 2017, he named himself the chief executive and did not list any university official as an officer. The incorporation papers said the Mid-Atlantic Technology, Research and Innovation Center, known as MATRIC, was the company’s sole owner and would be controlled by Hedrick, its chief executive.

“I was shocked when I learned that,” said Wood.

West Virginia University had hired a consultant to prepare documents for the Part I application and had paid the filing fee. After the Part I application was filed with the Energy Department, Hedrick did not reimburse the university, Wood said.

The falling out with the governor occurred after Hedrick joined the West Virginia trade delegation that traveled to Beijing in 2017 to participate in the signing ceremony for an $83.7 billion memorandum of understanding between China Energy and the state. Hedrick spent another day in China meeting with companies to raise $100 million to help finance the hub. The governor publicly criticized Hedrick for promoting his company on a state-sponsored trip and required him to reimburse the state for $23,000 in travel expenses.

And the deal between American Ethane and China could affect the storage hub’s prospects. Houghtaling, the company’s chief executive, said the agreements call for supplying 350,000 barrels of ethane a day to Chinese chemical makers from a new terminal in Beaumont, Texas. But the export contracts and the terminal are on hold because of the U.S.-China trade war.

Manchin said he is taking his protest of the export agreements to the Committee on Foreign Investment in the United States, or CFIUS, an interagency group overseen by the Department of Treasury and charged with reviewing transactions involving foreign investment that could affect national security. A Treasury spokesman said the department does not comment on specific CFIUS cases.

The uncertainty and turmoil has consequences for the upper Ohio River chemical industry and the storage hub. PTT Global, a Thai-South Korean consortium, has delayed for more than a year its decision to build a $10 billion chemical plant along the river in Shadyside, Ohio.

Managers for Royal Dutch Shell, which is constructing a $10 billion chemical plant downriver from Pittsburgh, said in an interview that they had no interest in gas liquids storage or the federally financed hub.

Industrial Info Resources, a Houston consulting firm that tracks construction projects around the world, said it has identified three other abandoned proposals for ethane processing plants along the upper Ohio.

“It’s a difficult place to build a plant and to operate,” said James Cutler, the chemical plant builder from Houston who proposed two of the plants. “You have to make a lot of assumptions about the gas market, the plastics market, production and supply. There’s considerable risk that investors aren’t willing to take.”

And the need is uncertain, he said. “Do you need ethane storage to build a world-scale plant? The answer is no. Does it help? It could.”

Two companies — Energy Storage Ventures, a Colorado-based company backed by Goldman Sachs, and Marathon Pipeline, a unit of Marathon Oil — are cautiously examining the potential to establish much smaller, privately financed gas liquids storage facilities across the river in Ohio. “We’d like to believe there is local demand for 2 million to 3 million barrels of storage in the Appalachian region,” said David Hooker, president of Energy Storage Ventures. “We question the need for 10-plus million barrels based on what exists today or the foreseeable future.”

“There are going to be two or three storage locations that support development and pipeline operations in that region. They all will be smaller and done by the private sector,” Tritt added. “It takes years to get through that federal loan guarantee process. By then the private locations will be started. I don’t see any reason for the government to be involved. I don’t see a role for the government in this.”

This article was originally published by ProPublica, a nonprofit newsroom that investigates abuses of power. Sign up for ProPublica’s Big Story newsletter to receive stories like this one in your inbox as soon as they are published.

Do you have access to information about ethane and gas production that should be public? Email keithhschneider@gmail.com. Here’s how to send tips and documents to ProPublica securely.

This story was co-published with the Charleston Gazette-Mail.

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