Natural gas development in Butler County brings risks, rewards

Source: Journal-News

Local trucking fleets will soon be able to fill up on natural gas instead of more costly gasoline, and more of the region’s electricity supplies will be generated by burning cleaner natural gas rather than coal.

A nationwide natural gas boom is leading to new development in Butler County of a compressed natural gas station in Hamilton and a gas-fired power plant in Middletown.

Twenty-seven percent of energy consumed in the U.S. in 2013 — as fuel for cars and trucks, to generate electricity or heat homes — came from natural gas, second only to petroleum (36 percent) and ahead of coal (18 percent), according to the U.S. Energy Information Administration.

But while lower costs and fewer emissions are key benefits behind the growing use of natural gas, it’s still a fossil fuel with its own risks. Higher demand has pushed investors to drill deeper than in the past, and use methods that are potentially harmful to the environment, experts say.

“Historically, we’ve tapped out some of the more shallow sources of natural gas,” said Thomas Crist, director of Miami University’s Institute for the Environment and Sustainability. “With hydraulic fracturing, we can reach deeper sources, which has created a bigger boom and a bigger domestic supply.”

Consumers need to be aware of how hydraulic fracturing can negatively impact water-stressed regions, and demand transparency from their gas providers to ensure the lowest ecological footprint, Crist said.

“The fact that both companies and individuals are thinking about sustainability and their environmental impacts is encouraging,” he said. “We do have to be realistic about how quickly we’re going to be able to replace our fossil fuels, and all of these efforts are needed to help us become less dependent on them.”

Hamilton positions itself as natural gas leader

Hamilton’s Department of Utilities is preparing to open a public CNG (compressed natural gas) station next to the city municipal garage, at 2210 S. Erie Blvd. As workers move into the final month of construction on the $1.83 million project, Utility Director Doug Childs is optimistic about the station’s long-term success, especially as the city looks to convert up to 60 city vehicles to CNG fuel.

“Hamilton has put itself in a real leadership position by building this station,” he said, adding that once completed, it will be the first public CNG station in the greater Cincinnati area.

“I suspect that in the first six to eight months, we’ll get a fair amount of criticism, because you won’t see a lot of vehicles there, but you’re going to see that grow,” he said.

Childs and local automobile dealerships say that as more CNG stations are built within closer distances of each other, there will be a growing demand for natural gas-fueled vehicles. Performance Honda, 5760 Dixie Hwy., said now that a CNG station would be located within 20 miles of the store, they have the option to start selling the natural gas-fueled Civic in the near future

“It’ll be great to have a dealership in the Cincinnati area, and hopefully that will inspire another town to open a station that’s open to the public,” said Marc Grubbs, new car inventory manager and business development manager for Performance Honda.

But even if the percentage of local residents that own a CNG-powered vehicle is low right now, Childs said it makes sense for Hamilton to look at converting their large trucks and public safety vehicles with higher mileage to CNG. The city expects a five year or less payback on its investment, he said.

Middletown natural gas plant closer to reality

NTE Energy LLC of St. Augustine, Fla., publicly announced in January of this year plans to build an approximately $500 million natural gas plant in Middletown. The company must still obtain government permits and certifications. If everything moves forward, plans are to start construction midway through 2015 and open in 2018, producing more than 500 megawatts of electric power year-round.

The power plant could be built near the intersection of Cincinnati-Dayton and Oxford State roads.

Two key meetings are approaching for the public to provide input on the proposed Middletown Energy Center. First, NTE Energy submitted in April an application seeking an air permit from Ohio Environmental Protection Agency and now the government agency has released a draft permit. The draft is open to public comments through Nov. 3. At a 6 p.m. meeting Oct. 27, to be held at the Middletown city building, EPA staff will share information and accept comments.

If approved, the air permit would allow NTE to start construction pending required approvals from other regulators.

The air permit regulates emissions from the facility such as particulates (ash and dust), carbon monoxide, volatile organic compounds, sulfur dioxide and greenhouse gases, said Dina Pierce, spokeswoman for Ohio EPA.

“The permit would set limits on the emissions,” Pierce said.

The following day, Ohio Power Siting Board will hold a public hearing Tuesday, Oct. 28, at the same time and place. Area residents will have an opportunity to testify about the project. From Ohio Power Siting Board, NTE is seeking certification examining the environmental impact and need for the project before construction can start.

Rust Belt renaissance

New drilling technologies have led to record-high production of natural gas in the United States and abundant supplies are cutting costs, said Marty Durbin, president and chief executive officer of industry group America’s Natural Gas Alliance. Ohio is uniquely situated to take advantage of the boom.

“The country is now in the position where we are the largest producer of natural gas in the world,” Durbin said.

Historically, hydraulic fracturing for oil and natural gas meant producers could only drill straight down, Durbin said. Advances in recent years have allowed for horizontal drilling of dense shale rock, gaining access to more deposits of natural gas. Technology improvements means the costs of drilling are also dropping, he said.

As a result, domestic production of dry natural gas has grown approximately 27 percent over the last decade to 24.3 billion cubic feet last year, according to the federal Energy Information Administration.

Natural gas drilling takes place in Ohio in the Utica and Marcellus shale regions. The Utica Shale rock formation encompasses multiple states and Canada, and the Utica’s daily natural gas production has grown 900 percent since the beginning of 2007. Now 1.5 billion cubic feet of natural gas is pumped out of the Utica region every day, according to EIA.

“Historically, the region was dependent on the Gulf of Mexico to get natural gas and natural gas liquids. Now you’re sitting on top of it,” Durbin said.

Ohio’s biggest opportunities to grow natural gas consumption are for industry, transportation fuel and power generation, he said.

One of the biggest costs of manufacturing is energy. By replacing electricity and coal with natural gas to heat factories and power equipment, manufacturers could lower their operating costs, he said.

Tougher environmental regulations are leading natural gas-fired power plants to replace ones that burn coal.

Today, 65 percent of Ohio electricity is generated via coal, and 18.5 percent via burning natural gas, according to government surveys. But 27 percent of electricity nationwide is generated by natural gas, which Durbin says gives Ohio room to grow.

“I would go so far as to call this the rebirth of the rust belt,” he said.

Environmental concerns

One misconception is that natural gas is a clean fuel, which is relative, Brad Miller, assistant director of Southwest Ohio Air Quality Agency, the local arm of Ohio EPA, has previously said. It’s a cleaner fuel than coal, but “when you burn natural gas it still has emissions,” Miller said.

Sulfur dioxide and nitrogen oxide are pollutants from burning coal that react in the atmosphere to form smog and soot, according to the U.S. EPA. When natural gas burns, it produces half as much carbon dioxide, less than a third as much nitrogen oxides, and one percent as much sulfur oxides as coal, according to the federal environmental agency.

Among the biggest environmental concerns to arise from hydraulic fracturing or fracking is what happens to the wastewater and chemicals released during the process.

“The water and fracking fluids are lubricants that are pumped at high pressure underground, and a lot of water is used in the extraction process,” Crist said. “The water comes back out, and you have to do something with the wastewater.”

Since energy companies have been hesitant to release the makeup of the chemical composition of their fracking fluid, it’s hard to know which chemicals are being disposed of, Crist said. And as transporting the wastewater to treat it is cumbersome and pricey, there have been instances of companies either disposing the wastewater into storm sewers that could lead to groundwater contamination, or reinjecting it at high pressure back into the ground, which has been associated with increased tremor activity near drill sites.

For example, the former owner of a Youngstown-based wastewater company in March pleaded guilty to dumping thousands of gallons of fracking waste water into a northeast Ohio storm sewer that empties into the Mahoning River watershed.

In April, Ohio Department of Natural Resources announced new, stronger permit conditions for drilling near faults or areas of past seismic activity. The new policies were in response to a series of small earthquakes in Poland Twp. in Mahoning County that showed “a probable connection to hydraulic fracturing near a previously unknown microfault.”

Although, there is no fracking in southwest Ohio. Hamilton has been heating its homes with natural gas for over 100 years from wells in Oklahoma, Louisiana, Texas, and the Gulf of Mexico, Childs said.

Childs acknowledges the concerns environmental activists have with increased fracking in the United States, but says that as the technology around fracking continues to improve and more oversight is conducted to decrease negative impacts, he sees it becoming less of an issue. Alternative ways to create natural gas such as biodigestion are not as cost-efficient or produce on the same scale as fracking, Childs said.

Pipeline safety

Southwest Ohio isn’t only the crossroads for automobiles traveling Interstates 70 and 75. An underground highway of oil and gas pipelines opens the region to risky spills such as more than 20,000 gallons of oil leaked from a Sunoco Logistics-affiliated pipeline in a Colerain Twp. nature preserve last March.

Ten different pipelines pass under Butler County, including Mid-Valley Pipeline Co., Texas Eastern Transmission LP and Rockies Express Pipeline LLC, according to the Pipeline and Hazardous Materials Safety Administration, a division of U.S. Department of Transportation.

At what’s referred to as the Lebanon terminal on east Ohio 122, there are two bulk gasoline terminals for storing and loading gasoline to deliver to gas stations. Next to that are two national gas transmission stations, according to Southwest Ohio Air Quality Agency, one of the government agencies with some oversight of the facilities.

“All the pipelines are rated to operate at a certain pressure,” said John Williams, director for the Public Utilities Commission of Ohio’s Service, Monitoring & Enforcement Department. The department has jurisdiction over gathering, transmission and distribution lines.

“As the pipeline companies are operating those pipelines within those parameters, there’s not an increased safety risk there,” he said.

Generally, natural gas is colorless, odorless (an additive makes it smell like rotten eggs), and non-toxic. Natural gas is lighter than air. If there is a leak or rupture, it will vent up into the atmosphere and disperse, Williams said.

“The biggest risk really that we’re concerned with is leaks at or around closed structures,” in case it were to ignite and catch fire, he said.

Most pipeline accidents are caused by a pipeline that’s been hit or struck while digging, due to people who fail to call before they dig, he said. The number to call and have gas lines marked is 811.

Cost a factor in conversion

The biggest drawback for a consumer to switch to a CNG vehicle would be the cost of conversion, Childs and Crist say. It makes more sense for trucks and fleet vehicles that can carry larger tanks, or if your commute is more than 40 to 50 miles every day, Crist says. And for those with smaller passenger cars who wish to be more sustainable, hybrid or electric cars may be more practical.

Hamilton is in the process of determining the price to fuel up at the city’s CNG station, but Childs said the city is committed to providing the cheapest gas it can for its customers.

“You won’t see the fluctuation of going from $2 to $3 in a week like with gasoline,” Childs said.