Confrontation of The Century – Gas vs. Renewables

TVA’s big combined cycle natural gas generating station in Muhlenberg County, Kentucky opened two years ago. (Photo/Keith Schneider)

MORGANTOWN, W. Va. — Last September California affirmed its commitment to supply all of the state’s annual demand for electricity with renewable sources of energy by 2045. New Mexico enacted similar 100 percent renewable legislation. This month Minnesota pledged to be the third U.S. state to achieve 100 percent renewable electrical generation, committing to do so by 2050.

The three states are joined by nine other states considering the 100 percent commitment, and 100 American cities that made the 100 percent renewable pledge.

Bravo! In the global contest to slow the advance of warming and dangerous meteorology Americans are investing in industrial evolution and human safety. The idea that clean energy is a path to planetary sanity is alive with elected leaders in American cities, and select counties and states. The advance of the rational energy brigade was felt only three years ago in the White House and Congress, too. But maybe that changes in 2020.

But even as technology, competitive prices, and consumer demand opens electricity markets to clean energy — at a rate considerably faster than most energy analysts anticipated — one fierce headwind is pushing hard to stall the advance. Behind that headwind is a storm of natural gas.

Since 2010, when I first reported on the unconventional energy boom sweeping across the United States and Canada, the dimensions of the development of new sources of oil and natural gas have only grown larger. Last year developers produced 29 trillion cubic feet of gas or 79 billion cubic feet per day. This year, according to the Energy Information Administration, wells in the United States are projected to produce 101 billion cubic feet per day.

Royal Dutch Shell is building a $10 billion chemical plant to turn ethane into polyethylene for plastics manufacturing. (Photo: Keith Schneider)

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The Ohio River Again At Center of Seminal Industrial Transition

Ohio River near Marietta, Ohio. Photo/Keith Schneider

SOMERSET, KY — Ever since I reported and completed a project to suggest a new development strategy for Owensboro, KY. — and met and married one of the city’s great and beautiful civic leaders –I’ve been fascinated by the evolution of the Ohio River Valley. See a ModeShift archive here.

Every economic era in American history opened along the river’s banks. Most of those that closed also weakened and died on a river that stretches 981 miles from its start in Pittsburgh to where it empties into the Mississippi in Cairo, Illinois. I’ve had in my head for eight years now a great non-fiction book on the Ohio’s contemporary story of reviving cities, cleaner shores, technological advancement, energy transition, and political retreat. A story, in other words, of America. Just one from a region of the country that attracts scant attention and invites limited perspective even from the more than 5 million people who live along its banks.

This week I’m off to the region around Pittsburgh, Morgantown, and Charleston to report for the New York Times and Energy News Network on the potentially colossal natural gas processing industry emerging on the banks of the upper Ohio. Royal Dutch Shell is building a $6 billion plant in Monaca, PA. to process natural gas liquids into feedstock compounds useful in the production of chemicals, plastics, and fuel.

Downstream, Ohio late last year approved air emissions and water discharge permits for a similar-size plant in Belmont County. The Department of Energy is considering a $1.9 billion loan guarantee to build a $3 billion gas storage and distribution hub in West Virginia. MarkWest, a big player in the industry, is spending $2 billion on gas processing facilities in the upper Ohio region. Billions more is being invested in pipelines to move gas and gas liquids to market. In 2017, during talks in Beijing between President Trump and Chinese Leader Xi Jinping, China indicated it was prepared to invest $83.7 billion in gas processing and distribution infrastructure in the upper Ohio states.
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Along Ohio River, Big Data Lifts Cincinnati

Reconstructing Fountain Square in 2005 was essential to Cincinnati's development following the race riot in 2001. Photo/Keith Schneider
Reconstructing Fountain Square in 2005 was essential to Cincinnati’s development following the race riot in 2001. Photo/Keith Schneider

CINCINNATI – This 226-year-old Ohio River city came unglued in early April 2001, when three nights of riots and a plunge in the number of residents and businesses followed the death of an unarmed black man shot by the police.

Fourteen years later Cincinnati is climbing to the top of the heap of American midsize cities in real estate construction — a surge in investment and new buildings fostered not only by the hard work of social activists and human rights leaders, but also by scores of business starts, job growth, wage increases, public-private partnerships, and transit development that folowed. The city’s population, 297,517 in 2013 according to the US Census Bureau, grew over 600 residents, the first increase since 1950, when Cincinnati’s population peaked at 504,000 residents.

Cincinnati’s resurgence, based in large part on the development of a new big data industry and marketing analytics, is evidence of two powerful and promising trends reshaping the United States in the 21st century. The first is the pace of job growth in American cities, which now is faster than in the suburbs. (See my articles here in the New York Times.) The second is the recovery of the Rust Belt, and especially the strength of cities in the Ohio River Valley. In today’s New York Times I report on Cincinnati’s rise as a center of what city leaders call “consumer science.”

One measure of Cincinnati’s new relevance is the $85 million, 338,000-square-foot, 12-story office building that Atlanta-based Carter is building to house General Electric’s new Global Operations Center. Construction is due to be completed in 2016 in The Banks, an 18-acre Ohio riverfront development located between the city’s baseball and football stadiums. The building and the district will be served by a station stop on the 3.6 mile, $148 million Cincinnati streetcar line, scheduled to open the same year.

GE’s Operations Center, one of five the company is developing globally, contains first floor retail, parking on the second floor, 10 stories of conference and office space, and houses up to 2,000 GE professionals, 1,400 of them new to Cincinnati. The installation serves big development and manufacturing centers that GE operates in the U.S., including lighting and aviation manufacturing sites in two Ohio cities.

The center is being built with the help of $101 million in city, county, and state tax and investment incentives.  In exchange GE committed to employ at least 1,800 people in Cincinnati over the next 18 years, earning a total payroll of $142 million annually to start, or an average of $79,000 a year.

“Cincinnati was chosen due to GE’s long-standing presence in the state and southwest Ohio,” said Dominic McMullan, a GE spokesman, “as well as a pool of local talent and skills required for the roles in the Global Operations Center. In addition, the state, county and city provided a competitive incentive package to GE.”

The 18-acre The Banks in Cincinnati connects center city to the Ohio River. Photo/Keith Schneider
The 18-acre The Banks in Cincinnati connects center city to the Ohio River. Photo/Keith Schneider

Big Data Urban Economics
Another big project that is competing with GE for attention, and illustrates the Queen City’s powerful embrace of new market opportunities, is the dunnhumby Centre just a few blocks away. The $140 million, nine-story, 285,000-square-foot office building opens in the spring and will make the corner of Fifth and Race one of downtown’s most prominent addresses again.

Rising from a parcel that for more than a decade was a city-owned surface parking lot, the new building sits atop 29,000 square feet of ground floor retail space and a six-level, 527,000-square-foot parking deck. It is a joint project of dunnhumbyUSA and the Cincinnati Center City Development Corporation, the city’s non-profit real estate development organization, known here as 3CDC. It houses the fast growing staff of a market analytics firm jointly owned by a small British-owned big data analysis company and The Kroger Company, the grocery store chain, which is based here.
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Gabrielle Gray Shifts Over to Weave A New Story in American Bluegrass Music

Gabrielle Gray, an icon in American bluegrass music and founder of the ROMP festival in Owensboro, KY., today turned over command of the International Bluegrass Music Museum to Carly Smith (r), who serves as interim director pending appointment of a new executive director. Photo/Keith Schneider
Gabrielle Gray, an icon in American bluegrass music and founder of the ROMP festival in Owensboro, KY., today turned over command of the International Bluegrass Music Museum to Carly Smith (r), who serves as interim director pending appointment of a new executive director. Photo/Keith Schneider

OWENSBORO, KY — There was a big change today in American bluegrass music here in this Ohio River city, which over the last decade has established itself as a global center of the quintessential American music born in western Kentucky. The board of trustees of the International Bluegrass Music Museum announced that Gabrielle M. Gray,  the museum’s chief executive, ends her exceptional 12-year tenure as the museum’s capable and creative leader and steps down as executive director overseeing all museum campus operations.

Gabrielle retains her position as executive producer of ROMP, the signature bluegrass music festival she founded in 2004.  Gray also remains the museum’s grant writer. These two sources of income — ROMP proceeds and grant awards — produce most of the museum’s annual revenue, making it possible for the museum to preserve, exhibit, catalog and archive the artifacts and collections of bluegrass music internationally, as well as host many ambitious programs and events throughout the year.

Carly Smith, a staff member since May 2011 and the museum’s capable assistant director since 2014, steps into a new role as interim director. The museum’s board, chaired by Peter Salovey, the president of Yale University, is conducting a nationwide search for a new executive director. The new director is expected to be in place in the spring or summer of 2015.

Gabrielle Gray, great woman of Kentucky, will continue to lead ROMP, the bluegrass festival she founded in 2004 in Owensboro, KY. Photo/Keith Schneider
Gabrielle Gray, great woman of Kentucky, will continue to lead ROMP, the bluegrass festival she founded in 2004 in Owensboro, KY. Photo/Keith Schneider

The announcement was greeted as big news in this river city of 58,000 residents, in large part because Gabrielle, her staff, her board, and city and Daviess county officials collaborated over the last decade to establish bluegrass music as an economic and cultural priority. The city is working with the museum to build a $15.5 million Bluegrass Music Center on a choice downtown lot along the Ohio that was formerly the site of a state office building. The ROMP festival, held annually over the last weekend of June, now attracts the finest bands in bluegrass and over 20,000 attendees annually. In other words, bluegrass is as important to Owensboro as the blues are to Memphis and Chicago, country music is to Nashville, jazz is to New Orleans, and rock and roll is to Cleveland.

Ron Payne, Owensboro’s progressive Republican mayor, who’s led a $250 million downtown redevelopment campaign that includes the new Bluegrass Music Center, commended Gabrielle’s tenure. “I’m tickled to death that Gabrielle is going to stay on and help us with ROMP,” Payne told the Messenger-Inquirer, the city’s daily newspaper. “She’s done an outstanding job. Bluegrass is where it is today, partly because of the work she’s done.”
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Dream Big — Why Ohio River Valley Resurgence is Nationally and Globally Significant

After GE closed its factories, and put 6,000 people out of work in the late 20th century, Owensboro was forced to develop new economic ideas. The city is now the center of bluegrass music in the world. The 23 String Band performs at the International Bluegrass Music Museum in September 2014. Photo\Keith Schneider
After GE closed its factories, and put 6,000 people out of work in the late 20th century, Owensboro was forced to develop new economic ideas. The city is now the center of bluegrass music in the world. The 23 String Band performs at the International Bluegrass Music Museum in September 2014. Photo\Keith Schneider

OWENSBORO, KY — More than three years ago, while writing a study that suggested several new 21st century development ideas for this old river city, I discovered the mysteries of the Ohio River Valley.

The region’s natural beauty is immediately striking. The recovering economies of cities and counties, once described as the Rust Belt, impress me. The unexpected governing approaches — cities passing new taxes as a development tool, and seeking consolidation with their surrounding counties — is out of step with what I knew about a region that wholly embraces the no-new-taxes, era of austerity, big government-hating rhetoric of conservative dogma.

My thinking has evolved over the last several years and is now influenced by what I see during the global reporting I’m undertaking for Circle of Blue. What’s plain to me is that the six states of the Ohio River Valley are providing powerful lessons for the country — in local and state governance, energy use, demography, tax investments, business technology, and government\industry collaboration.

My research needs to be deeper on these points, and I’m gathering string for my first book. But my instinct is that a persuasive case can be made that the region that produced the 50-year (1940-1990) American era of industrial innovation and working man prosperity is again forming the foundations of a new and purely American era of economic well-being and ecological recovery.

The Ohio River in Newburgh, Indiana. Photo\KeithSchneider
The Ohio River in Newburgh, Indiana. Photo\KeithSchneider

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