Utica shale electric use is having big impacts on FirstEnergy, American Electric Power | bakken.com

Utica shale electric use is having big impacts on FirstEnergy, American Electric Power | bakken.com.

 

It takes a lot of electricity to run plants to process natural gas and separate liquids from the Utica shale.

And that’s good financial news for Akron-based FirstEnergy Corp. and its subsidiaries.

Another utility that stands to benefit from Ohio’s Utica shale boom is Columbus-based American Electric Power.

FirstEnergy has seen its shale-related electric use jump by 70 megawatts from July 2011 to July 2014.

It is also planning to boost electric production to the shale-drilling industry in a big way in coming years.

The shale-related projects from 2015 to 2019 will account for 1,100 new megawatts of electric load growth in Ohio, West Virginia and Pennsylvania, said Charles E. Jones, president of FirstEnergy Utilities.

This is equal to the amount of electricity used by 500,000 new houses. It is also comparable to the power generated by the Perry Nuclear Power Plant east of Cleveland in Lake County. One megawatt is enough electricity to power from 600 to 1,000 houses.

Ohio Edison is projected to see 125 megawatts of that gas-related growth, according to FirstEnergy estimates.

FirstEnergy’s Ohio Edison Co. has completed a $3.6-million, 138-kilovolt line to a Utica shale processing plant near Youngstown.

The company is also making $3 million in substation upgrades to support a gas-processing plant in Columbiana County.

FirstEnergy is projecting that 1,100 construction workers will be needed for the new projects in 2015.

Electric sales by FirstEnergy companies could also increase even more in the future if the proposed ethane cracker plants in the Ohio Valley are built, as they would trigger new chemical plants that are also big users of electricity.

Cracker plants turn liquid ethane from the shales into polyethylene — a key feedstock for the petrochemical industry.

“Rapid growth in the shale gas industry is transforming communities and creating new jobs and economic opportunities throughout our service territory,” Jones said in a statement. “Part of the gas industry’s success relies on its ability to access safe, affordable and reliable electric power, and we are committed to meeting the demanding requirements of this fast-growing segment.”

FirstEnergy is investing about $250 million in transmission projects across portions of its service areas to meet the rising electric demand driven by the shale gas industry in the three states. This includes high-voltage substations and transmission lines to support gas-processing facilities and pipeline compressor stations. Most of the drilling is powered by diesel engines, not electric.

Related: Expansion in the Utica

Growth areas

FirstEnergy companies are serving 12 of the giant gas-processing plants — two in Ohio, two in West Virginia and eight in Pennsylvania.

Those improvements are part of FirstEnergy’s previously announced $4.2 billion Energizing the Future initiative through 2017. New transmission infrastructure benefits all customers in the Utica and Marcellus shale regions by strengthening the infrastructure and boosting electric reliability across the system.

“These projects will benefit local communities in two ways,” Jones said. “New electric infrastructure will directly support the build-out of the shale gas industry and the resulting economic activity across the region. And by upgrading our local power infrastructure, we can help these communities attract other energy-intensive industries while ensuring the highest levels of service reliability for every electric customer.”

Isolating outages

Those new projects included building a newly completed substation at the Kensington gas-processing plant in Columbiana County.

It includes a special configuration called a “ring bus” that’s capable of isolating an outage on the transmission network, ensuring continued operation of the Utica East Ohio plant. The technology can reduce the number and duration of power outages across a wide area by isolating the Kensington plant from other local electric customers and provide greater flexibility to manage the local electric system in light of the major power needs of the Kensington plant, FirstEnergy said.

The Akron-based energy giant also recently completed building a 3.5-mile transmission line to serve the Pennant Midstream processing plant in Mahoning County’s Springfield Township.

The new line connects with an existing 138-kilovolt line in Mahoning County and allows for future expansion of the Pennant plant that separates natural gas into dry and liquid components and uses large amounts of electricity.

The planned improvements extend into other FirstEnergy company services areas: Mon Power in West Virginia and West Penn Power, Penn Power and Penelec in Pennsylvania.

Mon Power is planning to spend $136 million on a substation to support MarkWest Energy’s Sherwood processing plant at Sherwood, W.Va.; a second substation to support MarkWest’s Mobley processing plant at Mannington, W.Va.; and a new transmission line near Sherwood, W.Va.

Projects elsewhere

American Electric Power has seen “significant industrial growth” in shale-related areas in Ohio and other states, said spokeswoman Melissa McHenry.

Its industrial sales in Utica shale counties grew 21.2 percent from 2012 to 2013. Industrial electric growth in shale areas in Ohio, Pennsylvania, Texas and Oklahoma grew by 14.6 percent from 2012 to 2013, the company said.

AEP’s quarterly growth in Ohio’s Utica shale jumped in the last five quarters by 23.7 percent, 56.3 percent, 49.3 percent, 54.5 percent and, most recently, 36.4 percent from the previous year.

AEP serves parts of the Utica and Marcellus shales plus the Permian Basin and Eagle Ford shales in Texas and the Woodford Shale in Oklahoma.

FirstEnergy’s Jones said he is confident that two of the proposed ethane crackers will likely be built, and that will dramatically hike electric use even more in the future.

Cracker plants

The projects most likely to be built are Royal Dutch Shell’s plan for a cracker costing $2 billion to $4 billion at Monaca, about 35 miles northwest of Pittsburgh on the Ohio River.

The company has not committed to building the facility, although the project is progressing with engineering and design.

The 340-acre Beaver County site was selected in 2012 over sites in Ohio and West Virginia.

The plant would process about 105,000 barrels of ethane per day.

The other project likely to be built in Jones’ view is from two Brazil-based companies: Odebrecht and Braskem.

They are eying a 300-acre site outside Parkersburg, W.Va., for the $3 billion plant that would be served by a FirstEnergy subsidiary.

It is known as Appalachian Shale Cracker Enterprise.

The large crackers would each use between 300 and 400 megawatts of electricity, Jones said.

The impacts of that cracker, if built, would likely be felt as far away as Akron with new chemical plants being built, Jones said.

Smaller crackers have also been proposed by companies in Ohio’s Monroe County and south of Wheeling in West Virginia.

The economic boom that could result from crackers being built in the Ohio Valley is huge, Jones said.

“It does have that kind of potential,” he said.