Sen. Joe Manchin (D-W.Va.), Ranking Member on the U.S. Senate Energy and Natural Resources Committee, introduced the Appalachian Energy for National Security Act that would require the U.S. Department of Energy (DOE) to conduct a study and issue a report on the national security benefits of the proposed hub located in Appalachia.
“The benefits of a natural gas liquids storage hub in Appalachia are abundant,” Manchin said. “It would be an economic driver for the region, would expand energy infrastructure, and would increase our domestic production of the petrochemical resources we rely on. The Appalachian Energy for National Security Act would require the DOE, Department of Defense and the Treasury to examine the benefits of the hub to national security. As Secretary Perry said, a storage hub in Appalachia is a ‘win-win.’”
In November 2018, DOE examined the feasibility of establishing an ethane storage and distribution hub in the United States, and issued a report entitled “Ethane Storage and Distribution Hub in the United States.” The report noted that the main driver of total domestic natural gas production growth is continued development of the Marcellus and Utica shale plays in the eastern United States.
The report highlighted the potential for the new hub to be built in Appalachia, as well as the economic and strategic benefits of such a hub. For example, the report noted that 95% of current ethylene production capacity in the United States is currently clustered along the Gulf Coast in Louisiana and Texas. The DOE report found that his geographic concentration of assets and operations may pose a strategic risk to the economy of the United States as extreme weather has significantly impaired U.S. production in the past.
The Appalachian Energy for National Security Act would:
· Require the Secretary of Energy to conduct and complete the study, in consultation with the Secretary of Defense and the Secretary of the Treasury, within one year of enactment.
· Require the study to include an examination of potential risks to national and economic security posed by foreign ownership and control of United States domestic petrochemical resources.
· Require an examination of:
o the types of additional infrastructure needed to fully optimize the potential national security benefits of the hub,
o whether geopolitical diversity of export destinations would undermine or bolster national security,
o the necessity of evaluating public interest with respect to exports for national security, and
o the potential benefits of locating the proposed hub in the area near the Marcellus, Utica and Rogersville shale plays.
· Provide the relevant congressional committees the ability to request and receive status updates before completion of the study.
On April 2, U.S. Secretary of Energy Rick Perry testified before the U.S. Senate Energy and Natural Resources Committee and discussed the importance of an Appalachian Storage Hub with Ranking Member Manchin.
“To ensure that we have resiliency and redundancy built into our natural gas liquids sector in the event that our Gulf Coast facilities would get hit and come offline—are you all looking seriously at a natural gas storage hub in the mid-Atlantic region, and advancing that as quickly as we possibly can to have that backup for security? And how does that play into the national security of our country?” Manchin asked.
“Senator, we have talked about this at length and, frankly, it’s not happening as fast as I’d like to see it. I think there is extraordinary potential in those four states and the Appalachian region—Pennsylvania, West Virginia, Kentucky, Ohio,” Perry said. “This is a win-win for America. This is about American energy security, it’s about American jobs and I hope we collectively—the administration, Congress, Democrats, Republicans—look at this and go ‘this makes sense for America.’”
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