Last November, President Trump returned from a trip to Asia with a commitment from the Chinese to invest $250 billion in various projects in the United States. Roughly one-third of that investment will go to one state; West Virginia. China Energy Investment Corporation, a newly formed company that was a merger between state-owned coal mining company Shenhua Group and energy producer Guodian Group, signed a Memorandum of Understanding (MOU) to invest $83.7 billion in shale gas, power, and chemical projects in the Mountain State over the next 20 years.
China Energy chose West Virginia because it is sitting on one of the world’s largest shale gas reserves, and they believe there is enormous potential to develop and expand the state’s energy infrastructure. China Energy also has a longstanding relationship with the Mountain State. One of its former companies, Shenhua Group, has participated in ongoing research initiatives with West Virginia University since 2002.
Location is also viewed as a major plus. West Virginia has several highly populous states located nearby. Its proximity to Ohio, Pennsylvania, Virginia, and states along the eastern seaboard make it easier to import essential out-of-state workers who will play a critical role in the state’s natural gas industry development.
There has already been an influx of energy workers from not only neighboring states but other known energy-producing states such as Texas, Oklahoma, Louisiana, Alabama and Mississippi. The forthcoming Chinese investment is expected to produce thousands of additional jobs, and with this level of demand for workers, wages are likely to increase, making West Virginia a popular destination for workers looking for a future in the energy industry.
Mixed Reaction to China Energy Investment
The economic impact of the China Energy investment in a state the size of West Virginia cannot be understated. Not only is this the largest foreign investment in the state’s history, the dollar amount of the investment over the next two decades ($83.7 billion) is more than West Virginia’s total annual gross domestic product (GDP).
Political leaders are praising the announcement and hailing its anticipated economic impact:
“This is a great day for the state of West Virginia,” said Governor Jim Justice. “I’ve been saying for the last couple months that the tides are turning in West Virginia and this is proof…”
“This investment in shale gas resources located here in West Virginia will spur tremendous economic growth in our communities,” said Congressman David McKinley.
There is no doubt that this deal is unprecedented, but at this point, details are sketchy. No information was given about specific projects China Energy will be involved in, the announcement only stated that “the projects will focus on power generation, chemical manufacturing, and underground storage of natural gas liquids and derivatives.”
Some are concerned about where the investments will be directed, whether or not local jobs will be created, and the unintended consequences the new projects will have in the state. Even before this deal was announced, West Virginia regulators lifted their previous suspension of approval for the Mountain Valley Pipeline, clearing the way for the controversial project to go forward.
There is concern that an enormous investment like the one China Energy is poised to make will put even greater pressure on regulators to approve similar projects in the future with minimal levels of scrutiny. This could potentially have adverse effects on the environment, and it could expose energy workers to more hazardous conditions.
Another potential issue is the impact the China Energy investment will have on other industries in the state. For example, how will the major focus on natural gas-powered utility generation affect the already struggling coal industry? And what about the Mountain State’s investments in renewable energy?
The CEO of the state’s largest utility company, Appalachian Power, announced last year that they would not be building any more coal plants and that they would invest heavily in solar, wind, and other renewable energy sources. With $83 billion now being invested in shale gas exploration and infrastructure, however, the lure of cheap energy from natural gas could divert resources away from coal and renewables.
Gas Exploration Injuries and Fatalities Likely to Increase
There is a lot of uncertainty about how the $83 billion Chinese Energy investment will affect the state, but one thing we can be fairly sure about is that workplace injuries related to oil and gas exploration in the Marcellus Shale formation and other energy-rich regions will increase.
The rush to develop West Virginia’s vast energy resources has already created more hazardous work conditions. This was underscored a couple weeks ago by the tragic death of a 44-year-old out-of-state pipeline worker who was struck and killed by a tracked vehicle while helping move a piece of natural gas pipe.
With an exponential increase in gas exploration projects, tens of thousands of workers hired – many of whom will be unskilled, and a relaxed federal and state regulatory environment, there is a strong likelihood that energy companies will continue to foster a culture of substandard work conditions.
Some of the major injury risks for gas exploration workers include:
- Chemical Spills
- Explosions and Fires
- Burn Injuries
- Drilling Rig Accidents
- Well Site Injuries
- Oil and Gas Truck Accidents
- Exposure to Contaminated Water
The Chinese Energy investment is a major economic opportunity for West Virginia, but the energy industry is inherently dangerous, and companies need to pay much more attention to the human costs of this prosperity. This means properly training workers, taking reasonable measures to ensure that work conditions are kept safe, and hiring enough employees to minimize the number of hours of overtime workers are required to put in, so they are not fatigued and more susceptible to making critical errors.
Oil and gas exploration is a very lucrative industry, and energy companies have the ability to make the necessary investments in the safety of their workers. All that is missing is the commitment to do so. With numerous new projects coming online in the years ahead, let’s hope energy companies make the decision to put people before profits.