Key to Ethane Cracker is Low-Cost Rail Service, Panel Says

Charleston Gazette
20 December 2011
By Phil Kabler

CHARLESTON, W.Va. -- One of the keys to attracting an ethane cracker plant to West Virginia will be to ensure low-cost rail service - and members of the Governor's Marcellus to Manufacturing Task Force on Tuesday discussed ways to provide it.

As Patrick Donovan, with the Rahall Appalachian Transportation Institute told the panel, 90 percent of all chemical producing facilities in the state - and all of the proposed sites for the cracker plant site -- are "captive rail" facilities.

That means the plants or plant sites are served by only one railroad, either CSX or Norfolk Southern.

State Commerce Secretary Keith Burdette said shipping costs on captive rail can be as much as $1,500 per rail-car higher than at plants located where there is competition between railroads.

Considering that the cracker plant would be shipping out 12,000 to 15,000 rail-car loads of polyethylene pellets each year, the need to assure competitive pricing is critical, he said.

"The end issue is to identify viable, financially feasible options to have ready," he said.

In the case of sites along both the Kanawha and Ohio rivers, CSX and Norfolk Southern each operate lines on either side of the river, but there currently are no links between the rail lines.

Options discussed Tuesday included:

Build a rail bridge across either the Ohio or Kanawha River near the cracker plant site, at an estimated cost of $90 million.
Rehabilitate existing abandoned rail bridges, over either the Kanawha or Ohio.
Authorize the State Rail Authority to construct and operate a short-line railroad linking the CSX and Norfolk Southern lines. Currently, the rail authority operates two short-lines, the larger being the South Branch Valley Railroad in the Eastern Panhandle.
Incorporate intermodal rail-trucking facilities currently under development in Pritchard, Wayne County, for Norfolk Southern, and west of Pittsburgh for CSX.
Develop a multi-modal system incorporating rail, barge and truck transportation. However, a concern raised Tuesday is that the industry frowns on shipping polyethylene pellets by barge.
"What we have said to companies reportedly looking at West Virginia is, while it is a complicated issue, there are solutions," Burdette said of discussions with companies looking to build a cracker plant in the Marcellus Shale field.