Company News

Lordstown Power Plant Could Spawn Second Plant

YOUNGSTOWN, Ohio – Not one – but possibly two –electrical generation plants fueled by natural gas could be built in the village of Lordstown over the next six years, resulting in an investment of well over $1 billion.

Massachusetts-based Clean Energy Future LLC, the company behind the construction of a proposed $850 million natural gas power plant in Lordstown, is considering building a sister plant on the same site along Henn Parkway, says Don Crane, president of the Western Reserve Building and Construction Trades Council.

“Once this project is up and running, they plan to build a second one that is a mirror image of the first,” Crane tells The Business Journal. “Depending on how this one goes, they want to build another one just like it.”

Lordstown Mayor Arno Hill says he’s “heard rumblings” about another plant at the site, but cautions he has no confirmation from the company, which has yet to formally move forward with the first project. “Right now, we’re working on getting this one done,” the mayor says. “My guess is that they’ll have everything closed out by March. This has been a 25-month process.”

Clean Energy Future President Bill Siderewicz responded in an email early this morning that ground should be broken for the project by April 1. Once that occurs, construction trailers would move in. He did not confirm whether there would be future expansion at the site.

Superficial excavation at the site has begun, and the property owner is removing trees and drilling test bores at the 17-acre site, just off state Route 45.

Crane says the contractor – Kokosing Construction Co. of Fredricktown, Ohio – wants to begin work the first part of April. “Then, they really want to fast-track the project,” he says. Once finished, the plant would supply 800 megawatts of electricity, enough to power about 700,000 residences.

More important, the project could employ up to 700 workers in the construction trades throughout the region over its three-year timeline, Crane says. Once that project is completed, work would immediately begin on the next plant, he notes. “A construction worker that lands there could see quite a few years just on these projects,” Crane says. Officials hope to have the plant completed and in operation by mid-2018.

Although the collapse in commodity prices has devastated the region’s oil and gas market, Crane sees the irony in those lower prices spurring expansion in this region of natural-gas-fueled power plants. Not only are commodity prices low, the seemingly endless supply of gas coming out of the Utica and tMarcellus shale formations ensures a long-term feedstock of fuel for these projects.

The building trades unions began negotiations last July with Siemens Corp. and project developers regarding the Lordstown project, Crane says. “Siemens owns all the equipment,” he says, and the United Brotherhood of Carpenters has a long-standing working relationship with the company.

Among Siemens’ major concerns was whether the local building trades council had the manpower and experience needed to handle such a large project. “I pointed to the Vallourec project and the GM Lordstown paint shop,” Crane relates, to reinforce how the trades executed major ventures in the recent past. In addition, the trades’ involvement in the regional oil and gas industry – specifically Pennant Midstream’s Hickory Bend project in Springfield Township – is evidence of the trades’ experience in the energy sector, he notes.

Crane emphasizes that all craft unions represented by the Building Trades Council would work on the Lordstown energy project, except the International Union of Elevator Constructors.

What sets this project labor agreement apart is that it allows the building trades more autonomy to address and resolve issues at a local level, rather than rely on their respective internationals in Washington, D.C. to become involved. “Whether it’s a jurisdictional issue, a manpower issue, or a contractual issue – we could handle that right here, right at the project,” he says.

This arrangement allows any matter to be addressed quickly so there is no interruption in the project’s construction. Wages, Crane notes, were never an issue in the contract discussions. “This is touted as the best labor agreement that anyone has ever seen on either side of the table in the oil and gas industry,” Crane says. “It will be a model going forward that gets used often.”

In the near-term, Crane is referring to two additional power plant projects planned for Columbiana County and in Beaver County, Pa.

South Field Energy LLC, a subsidiary of Boston-based Advanced Power, announced its intention last October to construct a $1.1 billion natural-gas-fueled plant near Wellsville. Crane has a meeting with project developers March 8 in Pittsburgh regarding that project and other potential plants that would involve some of the local trades.

“The project is now beyond the planning stages,” Crane states. “It’s going to happen.”

The meeting March 8 is with the projects’ contractor, Bechtel, and other parties, Crane says. “Their biggest concern is manpower,” he says.

Bechtel is slated to develop, or is developing, three power-generation projects within an hour’s drive of the Mahoning Valley: the Wellsville plant, Advanced Power’s Carroll County Energy LLC plant, under construction, and a combined cycle natural gas electricity generation plant in Monaca, Pa.

The plant in Monaca is planned to be in the same footprint along the Ohio River where Royal Dutch Shell is considering building a $3 billion ethane cracker complex. “Regardless of what Shell does at that site, the footprint will contain this new power station,” Crane notes.

Older coal-burning electrical generation plants across the country are either being converted to natural-gas power or shut down to be replaced with new plants fueled by gas. According to data from the U.S. Energy Information Administration, electricity generated from natural gas plants briefly topped that produced by coal-fired plants in April 2015, a first. That month, 31% of electrical power came from plants fueled by natural gas compared to 30% from coal.

Electrical power produced from coal plants rebounded ahead of natural gas the following month, and continue to produce more than natural gas operations, according to the EIA. However, the gap has narrowed considerably. Just six years ago, coal plants accounted for 44% of the nation’s electrical supply.

Meanwhile, in Carroll County, Advanced Power’s Carroll County Energy LLC has started construction on a $900 million power plant just outside of Carrollton.

“It’s just getting started,” says Jake Croston, business manager for Local 1015 of the Laborers International Union, based in Canton. “We have about 45 guys on site right now. We’ll get somewhere above 100 hopefully.” Thus far, 95% of the workers on the project are local.

Croston describes the Carroll County project as a “blessing for his local” because so much of the oil and gas pipeline and compressor station work has stalled.

Five years ago, major oil and gas companies descended on eastern Ohio to drill in the Utica shale, a formation rich in natural gas and natural gas liquids. However, weak oil and gas prices have made it unprofitable for these companies to continue drilling, which also led to a halt in new pipeline work.

“This project has helped offset this, especially in the winter,” Croston says. “It’s helped a lot of people provide for their families.”

Published by The Business Journal, Youngstown, Ohio.