New Castle News

Closer Look

May 1, 2014

Our Opinion: Decision to suspend project may have local benefit

NEW CASTLE — There will be one fewer shale gas pipeline passing through Lawrence County.

At least for the time being.

Backers of the proposed Bluegrass Pipeline said they are suspending activity on the project for now, although they left open the possibility they could revisit it in the future.

The reason for the suspension was attributed to a lack of commitments from local gas producers to use the pipeline, which would move shale gas and liquids from this region to Kentucky, where it would then be added to an existing line running to the Gulf Coast for processing.

So what does the decision on the Bluegrass Pipeline mean for the local shale gas industry? We’re not completely sure.

It’s worth noting, however, that Williams/Bluegrass Pipeline, the backers of the effort, described it as a project that was apparently “ahead of its time.”

They suggested the expanding production of shale gas in this region, which includes Pennsylvania, Ohio and West Virginia, will require such a pipeline at some point in the future. The implication is that shale gas production within the region remains in its infancy.

Interestingly, they said producers in the region were, for now, primarily focused on unspecified “local solutions,” indicating the gas would be used closer to home.

We view that as encouraging, because shale gas in its various forms has far more economic potential than merely heating homes and buildings. It can be used to generate electricity or it can be processed like crude oil into a variety of products.

From an economic standpoint, there is a greater benefit to keeping the gas in this region for use, rather than shipping it elsewhere. This would mean the industries requiring the gas would be built locally and thus provide more jobs.

You could compare this to the notion of shipping the region’s water supplies elsewhere to aid industry. A better option for the local economy would be to build those industries here, where water is plentiful.

If there is no major pipeline moving gas from this region, perhaps this would be an incentive for industry to develop here. Not the least of these would be the proposed cracker plant in Monaca, which would provide thousands of jobs directly and indirectly.

Natural gas is a raw material that offers financial benefits for those producing it and for those who own the property where it’s found. But what happens with this gas after it’s extracted may promise an even greater economic impact.

While the marketplace will determine what happens with shale gas produced in Lawrence County and other parts of this region, we are hopeful much of it won’t travel too far.

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