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Uneasy State of Affairs: Scotland’s Use of American Shale Gas

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The Grangemouth refinery and petrochemical plant in Grangemouth, Scotland. Photo: Reid R. Frazier/StateImpact Pennsylvania

On a quiet street overlooking Scotland’s largest refinery and chemical plant, Kevin Ross surveyed the newest outgrowth of the American fracking boom. 

Since 2016, gas from the U.S. has been feeding the Grangemouth petrochemical plant, a vast complex of cooling towers, tall flares and pipelines. The gas is harvested in Western Pennsylvania, near Pittsburgh. Then it’s sent through a pipeline to Philadelphia. There, the gas is put on ships to cross the Atlantic, Ross explained.

Ross, president of the Scottish Plastics and Rubber Association and managing director a local plastics testing company, said the arrival of Pennsylvania shale gas has allowed the Grangemouth plant to re-open a unit that had been shut down for years; the plant is now operating at full production, producing 1.4 million tons of chemicals and plastic pellets a year.  

“The import of American shale gas has certainly resulted in a lot more investment into Grangemouth,” Ross said. “It is invested in the safeguarding of jobs, it is invested not just into the plant but contractors and colleges, all supplying the plant.”

Recognizing an Opportunity

Natural gas is mostly used for heating homes or fueling power plants.  But when it comes out of the ground, it contains another key ingredient — ethane, a building block of plastics. 

The American fracking boom has produced so much ethane that it’s fueling a chemical boom in the U.S., where over 300 new chemical and plastics plants are either planned or under construction, including a massive new Shell ethane plant in Beaver County.

But for the past few years, this ethane has fed hulking chemical plants around the world, including the one at Grangemouth, owned by the European chemical company INEOS. 

The plan to ship this shale gas was hatched in 2011, when INEOS began looking for a new source material to feed its European chemical plants. Its own supplies of ethane from the North Sea were running low, said Warren Wilczewski, an economist with the US Energy Information Administration.

“INEOS looked at the United States, where ethane supply was growing– and especially in the Appalachian region, that ethane had, like, no place to go,” Wilczewski said. “And they recognized an opportunity.”

INEOS commissioned a fleet of ships — the first ever to carry ethane by sea — to move the gas from a port near Philadelphia to plants in the UK and Norway. It also signed a deal with Sunoco Logistics to ship gas over the Mariner East pipeline from Western Pennsylvania to a port near Philadelphia. 

Sunoco’s construction of Mariner East has been controversial because of its use of eminent domain, and its spotty environmental record. The project is the subject of multiple criminal investigations, including a reported FBI investigation into possible corruption by Gov. Tom Wolf’s administration related to its issuing of permits to the project. But the project has proved vital for INEOS’ plan to gain a new supply for its chemical plants. 

INEOS officials did not agree to an interview for this story. But in a company video, CEO Jim Ratcliffe said the cost of ethane from Pennsylvania was about one-fourth of what he would have had to pay for it in Europe.

“I think for some of these (chemical plants) in Europe, it’s the only way they can survive, if we can bring some of the US economics across to Europe,” Ratcliffe said. 

The US has quickly become the world’s leading exporter of ethane, feeding growing plastics industries in India and China. Ethane exports are expected to rise from 65,000 barrels a day in 2015, or about 6 percent of total production, to 330,000 barrels a day this year — about 17 percent, according to figures from the Department of Energy.  

“If we weren’t exporting ethane right now, [we’d] be giving it away for free,” said Steven McGinn, an editor for the chemical trade publisher ICIS.

The growth of ethane exports comes as plastics and petrochemicals are becoming more important to the oil and gas industry. The petrochemical industry is expected to account for more than a third of growth in world oil demand by 2030, according to the International Energy Agency. 

For its Grangemouth plant, INEOS got over $350 million in loan guarantees from the UK to retrofit the plant for American shale gas. But the company also wants a local supply; it is pushing the UK to allow fracking, the controversial technology that breaks up rock deep underground to get oil and natural gas. 

“There is potentially quite a lot of gas underneath the UK,” said Zoe Shipton, a geologist at Strathclyde University in Glasgow, who was part of a team of researchers that studied the potential for fracking in the UK. Shipton said the amount of retrievable gas remains unknown, and can’t be known unless there’s more drilling. 

That won’t happen any time soon, though, because in 2015 Scotland put in place a moratorium on fracking, and England recently did the same, after fierce public opposition. 

Opposing Fracked Gas

Norman Philip, of Friends of the Earth Scotland, grew up in Grangemouth, where his father worked at the plant when it was owned by BP. 

He opposed fracking because of issues like earthquakes and climate change–the plastics industry accounts for around 4 percent of global carbon emissions, and that number is expected to increase. He also heard about it from communities in the US and Australia.

“People were telling us of gas leaks, they were telling us of children having headaches,” he said. “There was a toxic element of it.” In Pennsylvania, fracking has been controversial. It has brought royalties to landowners and jobs to some parts of the state, but it has also been linked to air and water contamination and a variety of health problems. More recently, a group of residents in Washington County, the most heavily-drilled county of the state, have asked the state to study whether fracking had anything to do with a high number of rare cancers.

Norman Philip grew up in Grangemouth and opposes the import of American shale gas. Photo: Reid Frazier/StateImpact Pennsylvania

As the pursuit of shale gas has spread across the Atlantic, so too have arguments both for and against that are familiar in Pennsylvania.  

Despite the country’s moratorium, INEOS still has licenses to frack in Scotland if the government were to change its mind. 

Philip is bothered by the conflict: Fracking is illegal in Britain, but it’s legal to import fracked gas from the U.S.

“Why should a community in America have to suffer what we’ve fought hard against?” he said. “Our slogans were, ‘No fracking here, no fracking anywhere.’”

Keeping the Economy Afloat

Others in Grangemouth say they’re glad of the economic impact of getting fracked gas from America.

Lee Sinclair, a railroad engineer at the Grangemouth plant, likes the fact that the plant is now up and running at full speed, but he has mixed feelings about where the gas comes from.

“The only thing I don’t like about it is, Scotland said, ‘No, you’re not fracking here,’ so they decided to go to America to get this gas,” Sinclair said.  

He’d rather the UK get a local supply. But for now, he said, America’s boom in gas and ethane is helping him keep his job.

A few blocks from the plant’s gates, Lindsey Breen sells haggis, curry, and Scottish sausages to hungry refinery workers at the Rumbling Tum food cart. 

Most of her customers come from the refinery or surrounding chemical plants, she said. 

“If the refinery were to close down, then it would make a big impact on our business,” she said.

The refinery almost did close a few years ago, over a labor dispute. But INEOS won concessions from the union representing workers and government help to begin importing American shale gas.

Kenny Mullen, of the nearby town of Falkirk, said when the plant threatened to shut down, there was panic over the potential economic effects.

There was a lot of fear, like you could tell–people were scared about losing their jobs,” he said. 

Watching his son ride a bike at a park a few blocks from the plant on a September afternoon, the cabinetmaker and stay-at-home dad said he’s glad there’s no fracking in Scotland, even though fracking in the U.S. is helping the economy of his town. 

I think most people are anti-fracking, myself included,” he said. It may sound “cut throat” he said, but “we’re happy to take the gas which has been obtained (through fracking) from America.”

Mullen said if there was a way to get by without using fossil fuels, “I’d be all for that.” But for now, the gas arriving from Philadelphia is keeping the plant, and local economy afloat.

This article was originally published by the Allegheny Front. It was produced in collaboration with StateImpact Pennsylvania.

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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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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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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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