The Falcon Ethane Pipeline System [Falcon] is at the center of debate for many local energy supporters and environmental activists.
The Falcon pipeline is a proposed 97-mile pipeline that will be built, owned, and operated by Shell Pipeline Company LP [Shell]. The Falcon will connect three ethane source points and will stretch between Pennsylvania, Ohio, and West Virginia. After fifteen (15) months, Shell was finally able to obtain the necessary federal and state permits and is anticipating kicking-off the mainline construction in Spring 2019.
Ethane is a natural gas liquid found in the Marcellus and Utica Shale and has a variety of industry, residential, and commercial uses, but the main use is for plastic. Ethane was once an afterthought, but due to ethane’s supply and lower costs compared to other natural gas liquids, such as propane and naphtha, America’s consumption of ethane is on the rise. Like natural gas, ethane may be used as fuel for power generation either by itself or in combination with natural gas.
The biggest concern for the construction of the pipeline and the plant is the Falcon’s safety and environmental impact. The proposed plant will be under the Pennsylvania Department of Environmental Protections’ (“Department”) jurisdiction, and it will be permitted, monitored, and inspected by the Department. Studies have shown that the emissions from Shell’s plant will have a minimal impact on the air quality as they are far below the annual maximum concentration for each pollutant. Additionally, liquid pipelines deliver their products safely 99.999% of the time and there has been an approximately 40% decline in pipeline incidents over the past ten years. And, according to the U.S. Department of Transportation, pipelines are the safest, most environmentally-friendly and most efficient and reliable mode of transporting natural gas. In addition, since 2012, there have only been 18 individual public injuries that have occurred in Ohio, Pennsylvania, and West Virginia combined with only one public fatality.
The ethane market is now just beginning to capitalize on its potential in the Appalachian region. For the past five years, the supply and demand for ethane has been consistent with each other. However, in the past couple of years the demand for ethane has been increasing rapidly from both domestic and international markets. With this increased demand, the Appalachian region has an economic advantage because this area is host to the underlying Marcellus and Utica Shale, a hot bed for ethane.
The construction of the ethane plant will reportedly create up to 6,000 construction jobs and yield 600 permanent jobs once the plant is complete.
Ethane will no longer need to be transported to the Appalachian area, and the plants will provide an opportunity to maximize the manufacturing infrastructure. The Appalachian area is currently a net importer in plastic feedstock, but with the increased production from Shells plant and the Falcon pipeline, this area can evolve into an exporter of ethane. Additionally, the potential economic impact from the proposed plant is over 100,000 jobs and federal, state, and local tax of $2.9 billion dollars by 2025.
With the added supply of ethane, companies can begin to produce ethane for power consumption rather than for plastic. Ethane can be a cheaper and a more environmentally friendly alternative to gasoline. In a study using ethane to power a Ford 150 conducted by Nucor Steel USA, ethane produces similar results for power consumption while emitting approximately 30% less carbon emissions than gasoline, while being bought for about 50 cents/gallon on a gasoline equivalent.
In conclusion, based on the data generated and studies conducted, the benefits of the Falcon pipeline significantly outweigh any potential determents.
References
Click to access NGL%20Primer.pdf
http://www.achd.net/air/crackerplant.html
https://hip.phmsa.dot.gov/analyticsSOAP/saw.dll?Portalpages&NQUser=PDM_WEB_USER&NQPassword=Public_Web_User1&PortalPath=%2Fshared%2FPDM%20Public%20Website%2F_portal%2FSC%20Incident%20Trend&Page=Significant%20Incidents%20Consequences
https://www.americanchemistry.com/Appalachian-Petrochem-Study/
Click to access falcon-fact-sheet-2018.pdf
https://data.bls.gov/gqt/RequestData
https://www.aga.org/research/fact-sheets/pipeline-safety/
Click to access 2019%20API-AOPL%20Annual%20Pipeline%20Safety%20Report.pdf