The Associated Press July 11, 2011, 4:07PM ET

Marcellus shale pros, cons aired at W.Va. Capitol

West Virginia lawmakers discussed economic benefits from developing the Marcellus shale field Monday, while scores rallied outside the Capitol seeking a halt to a key process for tapping the rich natural gas reserve.

Legislators learned from Commerce Secretary Keith Burdette that the state has hired PB Energy Storage Services to study West Virginia's capacity to store ethane. The state is competing with others in the region to build plants that can convert this byproduct of shale drilling into a widely used compound, ethylene.

Matt Ballard, chief executive of the Charleston Alliance Zone, had earlier estimated to the Joint Commission on Economic Development that such a plant would provide thousands of temporary construction jobs for several years, followed by 700 or so permanent positions. Burdette said adequate storage of ethane is crucial to West Virginia's quest to land two of these "cracker" facilities, as are sufficient pipelines and a steady supply of the chemical.

"We are using all the resources that are at our disposal to recruit a cracker," Burdette told the House-Senate panel. "I believe we're a very competitive state in this mix."

But the absence of rules specifically written for Marcellus drilling may hinder this goal, lawmakers learned. The lack of such regulations also prompted Monday's call for a moratorium on hydraulic fracturing.

More than 100 people braved the July heat to rally against the practice, also known as fracking. It employs high volumes of water mixed with chemicals and sand to break the shale and release its gas.

"Most of the rules in place were designed for conventional gas wells, and do not consider the size or the hazards associated with hydraulic fracturing," said Jim Kotcon, a rally organizer. "There's no regulation of air pollution emissions at all. There's no regulation of water withdrawals, none."

The industry had launched a major public relations campaign to tout the jobs, tax revenues and other economic benefits from Marcellus drilling and such hoped-for spinoff industries as the cracker plants. It also cites officials at the state Department of Environmental Protection, which oversees gas wells, who say they have yet to find a case where hydraulic fracturing contaminated someone's drinking well.

Kotcon noted how poorly built Marcellus wells and surface spills of fracking liquid have tainted water supplies in neighboring Pennsylvania, which has seen significant shale drilling.

"The industry is hiding behind the claim that hydraulic fracturing doesn't cause a problem, but ignore the fact that they have to drill a well before they can fracture," said Kotcon, an associate professor at West Virginia University's agriculture college. "For the landowner, it doesn't matter if it's the (gas) well or the fracturing that contaminates the water."

Concerns about fracking have spurred Wellsburg, Lewisburg and Morgantown to ban it within or near their borders. Organizers of Monday's rally included Morgantown residents who pressed for that city's recent ordinance. But the city has also been sued over the ban since its passage, and the newly elected mayor there says he has concerns over the provision barring Marcellus drilling that involves fracking within a mile outside of city limits.

The Legislature proved unable to pass Marcellus rules during the regular session earlier this year. A House-Senate committee recently began pursuing a compromise measure that could succeed in special session. Senate Judiciary Chairman Corey Palumbo, D-Kanawha, suggested Monday that regulations adopted sooner rather than later would provide certainty for the industry.

Kevin DiGregorio, executive director of the state Chemical Alliance Zone, agreed. DiGregorio also said the regulatory climate could affect production of natural gas and therefore of the ethane byproduct. A cracker plant needs between 60,000 and 80,000 barrels of ethane a day, he said. The industry estimates that West Virginia's wells provide at least 150,000 barrels daily.

Besides ample supply, DiGregorio said the state has pipeline networks, though those may need upgrades and repairs. But he and other officials noted Monday that neighboring Ohio appears willing to spend $1.4 billion to attract a cracker plant

Acting Gov. Earl Ray Tomblin has formed a task force to identify what the state needs to attract at least one plant. Tomblin has also scheduled a Tuesday press conference with lawmakers and industry officials to discuss Marcellus shale rules.

The shale field is a massive rock formation a mile below the surface of West Virginia and several other states in the region. A recent study commissioned by the U.S. Energy Information Administration estimates that the Marcellus shale contains 410.3 trillion cubic feet of natural gas. By comparison, worldwide natural gas consumption reached 108 trillion cubic feet in 2007, according to the latest EIA figures.

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