5 tri-state area groups call on Goldman Sachs to drop support for NGL storage project
BRIDGEPORT, Ohio – On Wednesday, April 15, S&P Global reported that PTT Global Chemical has indefinitely postponed a final investment decision on the proposed Belmont County, Ohio ethane cracker plant. It is the most recent of many such delays in recent years and, according to the company, was brought about by uncertainty in oil, natural gas, and petrochemical markets amid the coronavirus crisis.
However, many of the economic factors undermining the financial feasibility of the plant were present before the onset of the crisis. These issues are outlined in a letter five tri-state area community groups are sending to the financial firm, Goldman Sachs, in which they ask the firm to withdraw financial support for a natural gas liquids storage project whose viability is dependent on construction of the plant.
Calling the proposed fracker and the associated Mountaineer NGL Storage project financially unjustified and too risky to warrant investment, the letter from the five groups points out that at that two major rating agencies and two analytics firms have concluded the projects should not go forward in the face of:
- Plunging prices for the proposed cracker’s principal product, ethylene
- Overcapacity in the market as a result of massive cracker construction along the Gulf Coast and in China
- Increasing competition from ethylene and polyethylene derived from crude oil
- Growing efforts by federal, state, and local governments to reduce plastics consumption, including bans on single-use plastics and bags
- Uncertainty about long-term economic changes that may result from the crisis as well as the speed of recovery
Sean O’Leary, who studies energy issues at the NW Energy Coalition said, “Due to the depth of the financial crisis and the range of changes taking place in the marketplace, it will take some time – probably a year or more – before market conditions are sufficiently settled to allow PTTGC to make a decision. And it’s possible, even likely, that when conditions are settled, they will no longer support construction of the cracker.”
Leatra Harper, managing director of the FreshWater Accountability Project, one of many community groups that have long opposed the proposed cracker and storage facility due to their health and climate change impacts, said, “The environmental and health damage these projects would do already far outweighed any offsetting economic benefit for the Ohio Valley. Now it’s plain they don’t make sense for investors either. So it’s time for the folks who represent us to quit looking for the silver bullet and move on to better, more sustainable ways to generate jobs and prosperity.”
Harper also invited all Ohio Valley residents who are tired of the fracking and petrochemical industries’ empty promises of jobs and prosperity to join her group in their efforts to build a sustainable and prosperous future for the valley.
The text of the shareholders letter to David Solomon, CEO of Goldman Sachs can be found here.
# # #