Cavern Hunting: Appalachia's Bid to Rival the Gulf Coast

For more than 400 million years — since salt, shale, and dolomite settled into a layer of rock that stretches from outcrops in upstate New York through the underground of Pennsylvania all the way to Michigan — the Salina formation was sealed away from human engineering.

Then came the oil and gas wells.

As drill bits pounded past the Salina to deeper, fuel-bearing layers, geologists grew intrigued by its salt zones.

In the 1960s, the U.S. government studied the formation as a possible host for radioactive waste. The American Association of Petroleum Geologists proposed it as a site for wastewater injection. About a decade ago, geologists concluded it might make a good storage container for carbon dioxide — that was back in the days when either a tax on carbon or some other mechanism to curb global warming seemed an inevitability.

But times have changed and the glory days of oil and gas have returned. And the Salina, that accommodating host, is being reshaped in service of hydrocarbons.

A pioneering project is underway across the state line in eastern Ohio, where private-equity funded Mountaineer NGL Storage is building a salt cavern to hold 2 million gallons of ethane, propane and butane.

This is how it will work. The company will drill wells into the Salina salt zone in Monroe County, flood it with water to dissolve the salt, and suck the salty water out of the ground. That will leave behind a cavern into which the company can pump natural gas liquids.

Meanwhile, brine will be stored in large above-ground impoundments. When it's time to retrieve some of the natural gas liquids in storage, the brine will be pumped back into the well, displacing the hydrocarbons and bringing them up to the surface.

"It's actually pretty ... simple," said Tim Hanley, vice president of business development for the company. He compared it to holding two straws in a glass of water and vacillating the amount by pulling one out with your finger over the hole.

The mechanics of the process might be simple but getting a new project approved, contracted and built — and introducing a new concept to the area — has taken time.

Mountaineer drilled a 6,200-foot-deep test well last year, and is working to get environmental permits and customer commitments to start construction.

There's been a good amount of interest, Mr. Hanley said, but, "Until somebody signs on the dotted line, it's like you almost sold your used car."

An Appalachian hub

Mountaineer's effort might a prelude of bigger things to come.

For several years, economic development officials in Pennsylvania, Ohio and West Virginia have been kicking around the idea of an Appalachian storage hub — a network of underground sites, pipelines and processing facilities.

Their concept — the focus of a geological study funded in part by Pittsburgh-based Benedum Foundation and due for completion next month — was to be the topic at a conference devoted to Appalachian storage Thursday at the Hilton Garden Inn at Southpointe.

Supporters are hailing it as manna from heaven, a way to capitalize on the vast supplies of shale gas and natural gas liquids in the Marcellus and Utica shale formations and funnel that profit to economically starved parts of Appalachia that have been bruised by the decline of coal and manufacturing over the past decades.

In testimony advocating for a storage hub before a U.S. Senate committee last year, Steve Hendrick, president and CEO of the Mid-Atlantic Technology Research & Innovation Center, quoted ancient Greek historian Thucydides, declaring, "The bravest are surely those who have the clearest vision of what is before them, glory and danger alike . and yet notwithstanding . go out to meet it."

In his own words, he added, "We need to realize our own new reality. Because, frankly, if we don't, we'll never get out of this rut."

Hendrick said he "read with vigor" the economic projections for this idea released by the American Chemistry Council last month. The trade group's study, and Hendrick, envision a storage hub that would command $10 billion in investment.

That includes a network of caverns connected to 500 miles of pipelines running from Royal Dutch Shell's petrochemical complex in Monaca, Beaver County, to Kentucky — storing and circulating up to 100 million barrels of ethane, propane, ethylene, propylene, chlorine and methane.

These are the building blocks of the chemical industry, which economic development officials say will flock to this region to take advantage of them.

The American Chemistry Council's projections bet on seven petrochemical crackers eventually locating in the region, two propane processing plants and an unspecified number of facilities that process ethylene into other chemicals.

So far, Shell is the only company that has committed to building an ethane cracker. Two other large firms have repeatedly delayed decisions on building in Ohio and West Virginia, but are still evaluating.

Natural gas liquids, like ethane, propane, and butane, are the heavier components of natural gas and are plentiful in the Marcellus Shale of southwestern Pennsylvania and West Virginia, and in the Utica Shale in eastern Ohio.

Push-back on new pipelines

A large portion of the natural gas liquids recovered from Appalachian wells today are either left in the gas stream that goes to transmission pipelines, or separated and sent by pipeline to the Gulf Coast, which is home to the largest hydrocarbon storage hub in the world — Mont Belvieu.

There, about 200 million gallons of liquids are stored in a salt dome under Barbers Hill, about 30 miles northeast of Houston. Hydrocarbon storage there began in the 1950s.

The area has been through its share of challenges. Pipeline and factory accidents resulted in more than 200 Mont Belvieu residents getting buyout offers in the 1980s.

A petrochemical storage hub, such as the one being proposed in Appalachia, would require a massive build out of infrastructure to transport volatile materials at high pressure. Opposition to such pipelines has lined up across Pennsylvania opposing Sunoco's Mariner East projects, for example.

In 2015, an Enterprise Products Partners pipeline carrying ethane from a Washington County natural gas processing plant down to the Gulf Coast exploded in Follansbee, W.Va., setting off a fire that burned for 10 hours.

Only woods and powerlines were damaged in that remote area, but the blast exposed the complicated interplay between Appalachia's new infrastructure and its past.

The ethane pipeline, less than two years old, had been on mined land, and sunk three feet during its short life, putting stress on the weld that eventually ruptured.

Finding the best rock

The state's geology and the history of its underground exploits is something that Kristin Carter pays attention to every day.

Assistant state geologist with the Pennsylvania Geological Survey, Carter is leading the state's study of underground layers that might prove a good match for natural gas liquids storage. Her counterparts in Ohio and West Virginia are doing the same.

Carter is focusing her work on three types of underground containers: salt zones, like in the Salina; underground limestone mines; and depleted or depleting gas reservoirs. "We've got lots of those," she said.

There are benefits and drawbacks to each option, and even if some are found to be geologically suitable, they may not be in the money for other reasons, she cautioned.

It's not just about the geology, Carter said, it's also about what else is happening both under the ground and above it — how many wells already pierce these formations, who holds the legal rights.

And it's not just about Pennsylvania.

"This kind of project you have to look beyond the state lines," Carter said.

The fruit of the effort will be a website with data and maps that prospective investors and economic development officials can use while pursuing the Appalachian hub concept.

"We wanted to make sure we give the facts on geology," she said. "If you have to spend the money on it, those things are going to guide you in the decision making process."

Copyright AP - Associated Press
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