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.