When it comes to economic development opportunities in Northeast Missouri, it seems that the availability of natural gas is frequently the linchpin.
In 2011, Doyle Manufacturing’s decision to move to Palmyra hinged on the availability of natural gas at the proposed site. In contrast, this region was recently eliminated from consideration for projects because more natural gas was needed than is available.
Two years ago, George Walley, executive director of the Northeast Missouri Economic Development Council (NMEDC), described the natural gas issue as “almost a deal breaker.”
For Doyle’s move to be finalized a new two-mile natural gas line was needed. The initial estimated cost of the new line was between $450,000 and $500,000, according to Walley, who credited Atmos Energy officials with working to lower the price substantially.
Spring forward to late 2012. Walley reported to members of the NMEDC Board Wednesday that a lack of natural gas had negatively impacted the region’s ability to compete.
“Two rather large projects looked promising but we were eliminated due to some specific engineering issues and a shortage of natural gas,” wrote Walley, adding that the “natural gas issue only applies to extremely large consumption projects” and the projects the area failed to make the cut in “used enormous quantities of natural gas.”
Walley told the group that he has been in contact with Panhandle Eastern Pipe Line Company regarding local “capacity issues” and possible solutions.
The entire supply of natural gas for Northeast Missouri comes from a spur line that splits from the main trunk line at Laddonia. The spur line ends in Quincy, Ill.
According to Walley, the spur line is at least 50 years old and possibly older. Because of the pipeline’s age it cannot accommodate natural gas under very high pressure.
Walley says a company official has indicated a study is in the works to determine how much more natural gas the spur can safely accommodate.
What would a new gas line cost? Walley’s estimate was likely “tens of millions.”
Tapping into another pipeline isn’t an option, either.
“We are surrounded by gas lines (in other states), but only five or six run through the whole state (of Missouri),” said Walley.
Board member Tom Bleigh said it’s hard to believe securing a larger supply of natural gas in Northeast Missouri is such a challenge, considering that nationally there’s a virtual “natural gas glut.”
Tom Boland, also a board member, noted boosting the availability of natural gas in this area has been a topic of discussion for a “long time.”
Page 2 of 2 - Walley likened the region’s dilemma to a “chicken-and-egg” scenario.
“They (Panhandle officials) say we must have the project in hand,” but companies looking to move want a natural gas guarantee up front.
Walley did report that BASF has offered one of its natural gas experts to help search for possible solutions.