‘Near-catastrophic’ blowout leaves chem firm wary

As the Tomblin administration considers a plan to allow natural gas drilling under the Ohio River, a major chemical maker in Marshall County has been fighting a proposal for hydraulic fracturing near its plant, citing a “near-catastrophic” gas-well incident last year that might be linked to geologic conditions beneath the river.

Atlanta-based Axiall Corp. has been waging a legal battle to stop Gastar Exploration from fracking natural gas wells that Gastar had drilled on Axiall property under leases Gastar obtained from PPG Industries, the former owner of Axiall’s chlorine and caustic soda plant at Natrium, located along the Ohio near the Marshall-Wetzel county line.

Axiall says it is concerned about a repeat of an August-September 2013 incident it blames on high-pressure fracking fluids being used by another company, Triad Hunter, to release natural gas from the Marcellus Shale at a well site on the other side of the river.

In court documents, Axiall lawyers say increased underground pressure from the fracking at Triad Hunter traveled under the river and somehow made contact with brine wells Axiall uses to obtain saltwater, one of the key materials used in its manufacturing process. Axiall says those pressures led to a blowout in which one of its brine wells at its plant “began spewing flammable natural gas.”

No injuries were reported, but parts of Axiall’s brine production were closed for more than six months for repairs and the company had to set up several large flares to burn off excess natural gas. Axiall was “fortunate to have been able to limit the environmental impact of the Triad Hunter incident and avoid bodily injury or loss of life due to a natural gas explosion or other disaster,” the company says in court records.

In a lawsuit filed in Pennsylvania, Axiall lawyers asked that Gastar be forced to conduct far more extensive underground investigations to determine if its gas operations pose a threat of a similar incident, and that it be required to submit more detailed plans for avoiding any damage to the Axiall facility.

“Gastar’s plan to blindly stimulate these wells by injecting fluid at extremely high pressure in order to ‘rubble-ize’ the Marcellus Shale is careless, dangerous, shortsighted and in breach of the lease agreement that permits Gastar to explore for and extract oil and gas in that area,” lawyers for Axiall subsidiary Eagle Natrium LLC argued in court filings.

Axiall lawyers said the company “supports the responsible development of natural gas” but that “extra care must be taken” when operating in the vicinity of its saltwater wells, which “are essential to the continued operation of a billion-dollar chemical plant that employs 500 people.”

Lawyers for Gastar responded that the company had “carefully studied and planned its drilling and fracturing operations in the Marcellus Shale” and that “potential” or “possible” risks were not enough to warrant the “sweeping, mandatory injunction” that Axiall sought.

On Tuesday, Allegheny County Judge Christine Ward issued a two-page order that denied Axiall’s motion for a preliminary injunction to stop Houston-based Gastar from fracking wells at the Natrium site. The order said a more detailed court opinion would be filed later.

Mike McCown, chief operating officer for Gastar, said his company is pleased with the decision “as we have continually believed the allegations were without merit.” Axiall officials would not comment on the decision or on whether the company plans to appeal.

The legal battle between Axiall and Gastar comes amid continued citizen concerns about the effects on the environment and on small, rural communities of the Marcellus Shale natural gas drilling and production boom in Northern West Virginia.

In recent weeks, critics of the boom have focused their attention on Gov. Earl Ray Tomblin’s proposal to lease rights for private companies to drill and produce natural gas from state-owned reserves under portions of the Ohio River.

One of three areas targeted by the administration for potential lease runs along Marshall County, about two miles upriver from the Axiall facility. A second of the areas targeted for potential leasing is just south of the plant and includes about a half-mile of area that Axiall has identified as being within its “area of concern” about drilling, said Deputy Commerce Secretary Joshua Jarrell. Jarrell said another area of the river, located just alongside the plant, was initially being considered for lease but was withdrawn from consideration — at least for now — until the issues being raised by Axiall are resolved.

Jarrell said officials from his agency met with the state Department of Environmental Protection and with Axiall to discuss the company’s concerns.

“We certainly took them seriously, and under advisement,” Jarrell said Wednesday. “We certainly want to see anything with regards to development done safely and reasonably.”

Jarrell said any agreements the state makes for leasing under the river would require drilling companies to obtain permits from the DEP, and that the state would consider additional language that specifically requires the issues raised by Axiall to be resolved to the DEP’s satisfaction.

“[The] DEP is the agency that is going to evaluate the safety of the process, and we would certainly defer any of those questions to them,” Jarrell said.

James Martin, chief of the DEP’s Office of Oil and Gas, said Wednesday that Gastar had obtained three permits in the area of the Natrium plant before the blowout incident. Gastar also has other permit applications pending at the facility and was identified by the state as the high bidder on the river section Axiall is most concerned about, state officials said.

Martin said his agency is looking at its options for adding some conditions to the three existing permits to require additional safety precautions by Gastar.

“We’re looking at that, and we’re considering whether or not some measures need to be taken to minimize the likelihood of something like that happening,” he said. “At this point, our expectation is that there would be no operations take place until we get done what we need to do with the conditions or an order.”

The Axiall plant’s operations date back to the 1940s, when the facility was opened to tap into a huge salt deposit located far beneath the surface. The plant uses salt mined from these subsurface deposits to produce chlorine, caustic soda and hydrogen, as well as hydrochloric acid and calcium hyperchloride.

In February 2011, then-plant owner PPG issued a news release announcing that it had reached agreement with Gastar on a lease that would eventually involve more than 30 natural gas wells on the Natrium property. Gastar would hire additional employees for the work, and PPG estimated the deal would generate for it about $50 million over 30 years, including an initial payment of $10 million.

“When developed responsibly, Marcellus Shale resources represent a fantastic opportunity in our region to promote jobs and secure an abundant source of U.S.-based energy for our homes and our businesses,” Michael McGarry, PPG’s senior vice president, said in the release. “We are pleased to be working with Gastar Exploration on this exciting project and believe that this development continues to demonstrate PPG’s commitment to the long-term sustainability of our Natrium plant.”

Axiall purchased the Natrium facility from PPG in January 2013, and plans for the natural gas drilling continued — until the blowout incident.

Reach Ken Ward Jr. at kward@wvgazette.com, 304-348-1702 or follow @kenwardjr on Twitter.

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