WHEELING, W.Va. — Prices for all natural gas remain depressed, but Joe Eddy said Marcellus and Utica shale drillers are now selling their product for just 75 cents per 1,000 cubic feet, which is leading some companies simply to keep it in the ground.
Eddy, president and CEO of Eagle Manufacturing in Wellsburg, represented the Independent Oil and Gas Association of West Virginia during a Thursday meeting at Oglebay Park. He said approximately 1,400 horizontal wells that have already been drilled in Ohio, West Virginia and Pennsylvania are still waiting for fracking jobs because there is simply nowhere to send the natural gas.
Furthermore, Eddy said there is enough ethane produced in the Marcellus and Utica shale regions now to support “eight or nine crackers.” He said the planned $5.7 billion PTT Global Chemical plant would significantly benefit the Upper Ohio Valley’s economy because it would allow the product to be processed locally.
However, the lack of pipelines is now the major problem, Eddy said.
“We have to have the ability to move the resource out. That’s why our pricing is so low – we just can’t move it,” Eddy said.
According to the New York Mercantile Exchange Thursday, the price for an Mcf of natural gas was about $1.75. This is significantly lower than the roughly $3 per unit price from one year ago. However, Eddy said the lack of adequate pipelines in the Marcellus and Utica regions means producers are only getting about 75 cents per Mcf at this time.
“You just can’t stuff anymore into the pipelines we have. It is a glut of gas,” he said.
Data from the U.S. Energy Information Administration indicate West Virginia saw its amount of proved natural gas jump by 7.94 trillion cubic feet from 2013 to 2014. Proved reserves are how much natural gas can be retrieved using current methods of drilling and fracking.
Pipeliners continue installing billions of dollars worth of projects to ship Marcellus and Utica material to larger markets. Eddy said these natural gas delivery projects cannot open quickly enough.
However, Eddy said the ATEX Express ethane pipeline, as well as the Sunoco Logistics Mariner East and Mariner West pipelines, are actually negatives for the Upper Ohio Valley because they move locally sourced ethane away from the region. He said the area would be much better off with at least one ethane cracker, such as the proposed PTT Global facility.
“If PTT Global is built, at any given time, there could be 5,000 to 10,000 workers … here, at a given time, in the valley,” Eddy said of those building the giant plant. He then said several hundred workers would operate the plant on a full-time basis once it entered that phase.
The technology would transform ethane into ethylene and polyethylene, which can be used to make plastics, which Eddy uses in his business.
Also Thursday, U.S. Army veteran James McCormick represented Vets4Energy. He emphasized the national security aspect associated with domestic energy production, which he said helps put terrorists out of business.
“We have to become energy independent,” McCormick said. “That’s what our nation needs.”