CHARLESTON – Despite being worth potentially $83.7 billion, West Virginia’s agreement earlier this month with China Energy essentially has disappeared from headlines.
Few details have been released about the company’s plans, and state leaders barely have spoken about it. Thus, state residents – including everyone from business leaders to laborers – don’t have much to talk about.
“I am surprised I heard nothing about it on the national news, nor in my local paper and newscasts,” Jerald Stephens of Glen Dale told The New York Post for a Nov. 18 story. “I can guarantee you if anyone not named Trump had made this kind of deal for West Virginia, it would have at least been a panel discussion or two on a cable news channel.”
Stephens, 67, described himself to The Post as a state native, union representative, Trump voter and a “keen observer of local politics” for as long as he can remember.
“We really have no influence or power here, so that is interesting to me that he still kept his promise to us, something I suspect he will likely get little credit for in the national news,” Stephens told The Post.
On paper, there is a lot to like about the signed memorandum of understanding beyond the potential $83.7 billion for West Virginia.
* West Virginia’s $83.7 billion agreement was the largest among several signed with states. The total amount of those agreements is about $250 billion. To put the agreement in perspective, West Virginia’s gross domestic product last year was $73.4 billion.
* The Department of Commerce said China Energy officials had made several trips to West Virginia and the memorandum represents the first of several expected commitments by the company. The work will happen in phases over 20 years, and it will focus on power generation, chemical manufacturing and underground storage of natural gas liquids and derivatives.
* The West Virginia Commerce Department says China Energy’s focus in the state will be on shale gas development and chemical manufacturing projects.
* China Energy is the world’s largest power company, the result of a merger between the country’s largest coal producer and one of its largest utility companies.
* West Virginia’s chemical industry already accounts for about 25 percent of the state’s international exports and about 13,000 jobs, and the state is the ninth-largest producer of natural gas in the country.
* West Virginia University and a predecessor company of China Energy already have been working together on coal liquefaction technology for 15 years.
Still, Commerce Secretary Woody Thrasher, who signed the memorandum of understanding Nov. 9 in China, and Gov. Jim Justice haven’t provided many more details.
“I don't want to get into the specifics of the projects," Thrasher said at a Nov. 13 press conference about the deal. "There's a whole wide series of projects. Can I guarantee you that they're going to spend 83 billion dollars in 20 years? No. But what I can guarantee you is: the governor has directed me to do everything within my power to facilitate these projects going forward.”
WVU Energy Institute Director Dr. Brian Anderson has said potential projects would run the entire spectrum of natural gas and petrochemical products and facilities. He has said there has been talk building an underground storage hub for natural gas liquids, which would connect with production facilities via pipelines.
“When the value chain of the petrochemical industry from the natural gas liquids would start with the necessary, fundamental framework infrastructure that would support that petrochemical sector," Anderson told West Virginia Public Broadcasting. "And so one thing that Texas does have that West Virginia doesn't is a storage and trading hub for these natural gas liquids. It creates a spot market for the efficient trading and pricing of those natural gas liquids.”
At that Nov. 13 briefing, Justice and Thrasher also said the deal could lead to a variety of petrochemical projects over the next 20 years. But, they again said they couldn’t provide many details because of confidential aspects of the memorandum of understanding. The first two projects will be natural gas power plants, likely in Harrison County and Brooke County.
Despite all of the “what ifs,” the president of the West Virginia Chamber of Commerce is optimistic about what the agreement will mean to the state.
“We believe it’s realistic,” Steve Roberts said. “We believe there are going to be electric-generating plants built in West Virginia that will be fueled by natural gas. We have seen that there are 22 in Pennsylvania, 18 in Ohio and none in West Virginia. So, it’s time West Virginia got its share. There will be more construction. We think those are likely.
“And, West Virginians have a tradition of making things. We had a major chemical expansion in the Kanawha Valley in the 1960s and 1970s. We think we’ll see manufacturing opportunities with this, particularly in the Ohio Valley.”
Roberts said West Virginia has lost chemical manufacturing jobs to the Gulf area.
“But they have hurricanes there, and we don’t,” he said. “They don’t have natural gas, and we’re close to those who use natural gas. This is the right place at the right time with the right people to make it happen.”
The president of the state Senate also is optimistic.
“I’ve been involved in some of the meetings with the Commerce Department, the governor and members of the Chinese delegation as well,” Mitch Carmichael said. “There is excitement and enthusiasm to move forward quickly. It is planned for a 20-year period, so some terms of the details about where when and how much are still evolving.
“But, there is a general commitment that this is a great place to invest now.”
Carmichael said he understands why some people might be skeptical about the size and scope of the agreement.
“I get that, but also I guess I don’t want to throw cold water on this or throw a wet blanket on it,” he said. “It underscores that West Virginia and the entire Appalachian region has enormous investment opportunities. And it’s not just Americans, but the world over is looking at us and thinking about locating businesses here.”
He said he hopes state residents will just give the agreement a chance.
“Sure, it’s not as soon or as concrete as we’d like it,” Carmichael said. “But, it’s still good news. Give it some time. There’s a healthy skepticism about it, but I think we can draw the contrast that it’s better than hearing that we’re going to close a plant down in the future.
“Now, someone is saying, ‘We’re going to make investments here.’ We see the advantages, It’s not an ironclad document. It’s an indication of a willingness to work here. And, it’s only going to help the state.”
On Nov. 21, Justice spoke about the agreement with Fox News.
“No question whatsoever, President Trump has kept another one of his campaign promises,” Justice said about Trump’s plan to balance trade inequities. “It just so happens that West Virginia abounds in natural resources, and natural gas is really important to China for manufacturing from a petrochemical standpoint.
“Lo and behold, we’ve got some real wonderful things going on today in West Virginia. Through our Commerce Department and our president, we’ve got some real hope of unbelievable, unbelievable growth within the state of West Virginia.”
Justice said the agreement “absolutely” will mean jobs for West Virginians.
“They’ll be investing dollars here,” he said. “Building structures, building manufacturing, building crackers – all of the things that tie back to natural gas and the petrochemical industry.
“In all honesty, 84 billion dollars within the state of West Virginia is more money than any of us can think about and more job opportunities for great West Virginians.”
Justice told the hosts of “Fox & Friends” that since he became governor, the state education system has been revamped and the state has passed the $300 million road bond referendum to fix the state’s infrastructure.
“We have a lot of things going on,” he said. “And now the China deal, which will really set us on fire. West Virginia’s economy grew in the first quarter with the second highest growth of any state.
“The bottom line is we have great people, we’re within a rock’s throw of two-thirds of the population of the country and we have natural resources just beyond belief. West Virginia always has been a hidden jewel, but we just didn’t have the job component to drive everything here. So this will do it.”