The Trump administration, the Chinese government, and major petrochemical companies are moving forward with a new multibillion-dollar petrochemical hub in Appalachia. The project raises health and environmental concerns, and suffers from serious conflict of interest problems, journalist Steve Horn reports
SHARMINI PERIES: It’s the Real News Network. I’m Sharmini Peries coming to you from Baltimore. The Appalachian region covering the states of Pennsylvania, Ohio, West Virginia and Kentucky is on the verge of moving forward with one of the largest petrochemical projects in recent memory. The project would create natural gas liquid storage, pipelines and a petrochemical refinery row among other things. It received major financial backing last November when President Trump and Chinese President Xi Jinping signed a Memorandum of Understanding in where China would invest $83.7 billion into this project over the next 20 years. Environmental groups are up in arms because it would significantly increase fracking and create numerous health hazards. In addition to the environmental concerns, there are also issues of conflict of interest among the politician and the project managers.
Joining me now to analyze the Appalachian petrochemical project is Steve Horn. Steve is an investigative reporter for DeSmogBlog and a freelance investigative journalist in San Diego, where he recently wrote an in depth analysis of the Appalachian project. Good to have you back, Steve.
STEVE HORN: Good to be back on. Thanks for having me.
SHARMINI PERIES: Steve, give us some background on the project. How big is the project compared to, say, other petrochemical hubs of this nature and which companies are involved?
STEVE HORN: Well, the visionaries of this particular project, in particular, West Virginia University professor Brian Anderson who’s also one of the co principals of the company that’s trying to get this thing off the ground called Appalachian Development Group. Him in particular, through his professorship at West Virginia University, and he heads the West Virginia University Energy Institute. He has said openly that he thinks that this petrochemical hub, if it gets off the ground in the way they want it to and, of course, this 80 plus billion dollars that got kicked in from the Chinese government will really help it move in that direction. With that said, he hopes it becomes a parallel to something akin to the Henry Hub in Louisiana, which is a key trading hub in Louisiana. Or if you look at another more direct parallel, that one’s more for natural gas, he sees this as a natural gas liquids or petrochemical hub equivalent to Mont Belvieu in Texas, which is the only really main petrochemical hub that has a pricing index that traders on Wall Street and others who trade natural gas and/or oil look at the price of that to determine what they’re going to do in their investing.
They hope that what they’re trying to build in West Virginia really becomes a parallel to that, all centered around really fracking in the Marcellus shale in Pennsylvania and West Virginia and then fracking in the Utica shale up in Ohio and, of course, all those states together would be part of it, but really the main state that’s been at the center of this right now in making the political maneuvers has been West Virginia and, of course, the federal government in China.
SHARMINI PERIES: Right. Why are the Chinese so interested in such a project?
STEVE HORN: Well, I think the bottom line for them is probably just money. It’s a big pool of money and this is the China Energy Investment Corporation so it’s a state owned investment vehicle. Just recently, a petrochemical company in China, as Lee Fang reported in the Intercept, joined the American Chemistry Council, which is basically the petrochemical industry’s trade association and lobbying association in Washington, which is a lot of companies that people represent as oil companies like Exxonmobil, Shell, BP, et cetera. Well, the American Chemistry Council has also been the main lobbying force within the United States to make this happen.
So, I think that basically the bottom line is this is going to take billions upon billions of dollars to make it happen and basically the Chinese government would be providing the seed money but they see will most likely see a huge return on this investment. I think what’s really interesting about what happened here is that although this was something that was the Memorandum of Understanding that kicked into gear this 80 billion dollar plus investment in Appalachia and West Virginia. It was actually overseen by the President of China and President Trump, but it was signed by the Secretary of Commerce in West Virginia as a representative of the state and the China Energy Investment Corporation.
So, really, I think to summarize, yes, China sees a lot of potential money at stake in this sort of thing and they have a very friendly relationship right now with the Trump Administration, though there’s so much focus on what’s happening with Trump and Russia. What’s been extremely under reported by comparison is these bonds that have been created between the Trump Administration and China. And I think that this 80 plus billion dollar investment is sort of an example of that but I think more broadly, we have to understand that this is not the only investment that was made as part of this Memorandum of Understanding. In total, it was the $250 billion investment Memorandum of Understand that was signed between the Chinese government and basically American companies to grow either exports of natural gas or other aspects of the industry including this petrochemical hub.
SHARMINI PERIES: Now Steve, you have compared this to the Louisiana’s Cancer Alley in terms of the environmental and the health impacts it could have such a hub. Where does this term come from in terms of “Cancer Alley” and what comparisons or parallels can we draw from that experience?
STEVE HORN: Yeah. Well, it’s called Cancer Alley really because in this key petrochemical and oil and gas industry refinery row down in Louisiana, and down in Texas, and on the Gulf of Mexico, basically there are very high rates of cancer, very high rates of airborne illnesses compared to people who don’t live in those areas. In particular, in the Houston area where lots of minorities live, it actually is an environmental justice issue as well and some have said environmental racism issue. But just looking at that as a parallel to what’s happening right now in Appalachia, it’s very much the same exact oil and gas products that would be refined and created in this facilities. People do see these sorts of potential parallels happening, at least in the terms of the people who are promoting these facilities.
There’s been zero discussion of the potential health or environmental, ecological impacts of these facilities. It’s been pretty much just sort of rara atmosphere, “we’re going to create jobs,” atmosphere. The proponents, in particular, the American Chemistry Council says that this petrochemical facility could create 100,000 jobs. That’s more the sort of discussion they would prefer to have but, of course, we do these years of Louisiana, Texas being what many call a sacrifice zone for the petrochemical and oil and gas industries for refining their products. And I think the proof has really been in the pudding in terms of higher rates of these airborne diseases, incidents of cancer, et cetera. That’s why it’s earned the term “Cancer Alley.” That’s why people are afraid sort of a similar dynamic is being created in West Virginia and more broadly in Appalachia, potentially.
SHARMINI PERIES: Now Steve, health concerns and environmental concerns are one set of concerns. Then there’s also the conflict of interest that you write about, the planning and promoting of the project has exposed a number of people who are directly involved in pushing this forward. For example, West Virginia Secretary of Commerce, Woody Thrasher, has perhaps the most notorious conflict of interest. Tell us about them and then, of course, how likely is this project to move forward?
STEVE HORN: Yeah. Woody Thrasher, before he became the Secretary of Commerce in West Virginia, was a businessman and, in particular, he was, say, executive of a family owned firm that was co founded by him and his father by the name of the Thrasher Group. When he was named Secretary of Commerce by Governor Jim Justice, they came to sort of an agreement. It’s kind of similar in a parallel to Trump where he signed a blind trust of “blind trust agreement” between him and trustees who would oversee that arrangement, but he still owns 70% of the Thrasher Group under that blind trust agreement. There’s that aspect of it.
Why is that interesting in this context? Well, the Thrasher Group has been sort of maneuvering itself. It’s in this business. It’s in the logistics. It’s in the engineering. It’s in the oil and gas contracting business where it helps these firms either set up office sites or set up different infrastructure and it’s shown direct interest in this particular Appalachia hub. So, they’re involved in setting up a conference that will take place in March. Their CEO is speaking, giving the opening and closing remarks, and they’re sponsoring the thing. It’s a lot of these same companies and players who are interested in this are going to be attending that conference. There’s been a lot of these conferences where you see the same sort of key, we’ll say, actors involved.
Another one of them is probably equally conflicted, is Brian Anderson, who I mentioned before. He’s the head of the West Virginia University Energy Institute on one hand. So, through his scholarly work, really hiking up the potential of this hub and how much money to make this stay and how many jobs. So, he gets to be this scholarly voice in the media and this scholarly voice in papers that he writes about it. At the same time, as a result of all this hype that’s been created, he’s actually now co principal or one of the executives of a firm that they’re trying to create in West Virginia called the Appalachian Development Group, which is him and one other guy who’s really been behind this for years who’s the CEO of a company named MATRIC and that’s located on the site that used to be a research and development center for Dow Chemical. Really, Anderson on one hand, he’s the scholarly voice and on the other hand he could very much profit and make potentially millions upon millions of dollar off of this thing.
Actually, I’ve never seen it disclosed that he is an executive and principal of this particular firm while he’s hiking it up as a professor. I think that my article was the first time to even report that. It’s located on their website and it’s located in different business and corporation forums in West Virginia. Besides that, it’s been reported nowhere, but that’s a very big deal. He speaks at lots of these conferences I just spoke of as well. So, he’s really been the main voice of this who’s not in the political sphere. He was at the press conference, for example, Brian Anderson in January in which Woody Thrasher and Governor Justice talked about the MOU that was signed with China. So, he’s very much in the thick of things and really at the center of what’s going on.
SHARMINI PERIES: Is there any local resistance to all of this going on?
STEVE HORN: Actually, yeah. I mean, there’s definitely, I think a great example would be what happened in the legislature last week. It wasn’t really tied to the hub but Lissa Lucas, who’s running for legislature in West Virginia as a democrat, kind of a progressive democrat, she’s first of all said that she won’t take any corporate money for her campaign. She is a proponent of public financing of campaigns. She’s been interested in this hub. I was in touch with her really, when I wrote this article and the days after that before the incident happened where she was removed from the legislature floor for talking about money that was taken by various members of the legislature to promote another related bill that would basically make fracking easier to happen in that state and to get leases. Her and then, she’s very aware of this hub.
Then there’s another group named the Ohio Valley Environmental Coalition who has been working with lots of states within the Ohio Valley Appalachia. It’s still a very new proposal, really only got off the ground in terms of being discussed last year. But I do think that there’s growing awareness of this hub. But really there hasn’t been a ton of environmental press attention. It’s mostly been covered by the business press and the industry press. I think there’s still lots more of work to go on in terms of making it something that people even know about that’s happening.
SHARMINI PERIES: I’ve been speaking with Steve Horn. He’s an investigative journalist with DeSmogBlog. I thank you so much for joining us, Steve.
STEVE HORN: Thanks again for having me.
SHARMINI PERIES: Thank you for joining us here on The Real News Network.