Tuesday, November 14, 2017

Justice, Thrasher tout China deal, but won't release project list or MOU

Justice, Thrasher tout China deal, but won't release project list or MOU

400 lb Gov. Jim Justice on Monday continued to tout what he says is a 'whale of a' deal for $83.7 billion in Chinese investment in West Virginia's natural gas industry, but he refused to make public a list of the proposed projects or to release an agreement that Commerce Secretary Woody Thrasher signed on the state's behalf.

The Governor's Office had billed a late-morning news conference during legislative interim meetings as an opportunity for Justice to "provide more details" on what the administration says is a historic investment by China Energy Investment Corp. in natural gas industry infrastructure and "downstream" facilities that would allow the state to add value to and greatly boost the economic impact of the boom in gas drilling in the Marcellus Shale region.

However, the appearance by Justice and Thrasher actually provided little new information, except for a description of how the deal almost fell through just a week before last Thursday's announcement during President Donald Trump's visit to China.

"When it got to crunch time, we almost lost this," Justice said. "We went crazy and we scrambled."

Thrasher said state officials became concerned when a news story appeared in late October that described Trump's China trip including energy deals in Texas and the Virgin Islands, but not in West Virginia. The state's team went into high gear to rescue the China Energy investment in West Virginia. Justice and Thrasher credited the governor's personal relationship with Trump as being one of the keys to success, and Justice said the China announcement is more proof of momentum in improving the state's economy.

"There have been incredible things happening in West Virginia," the governor said. "We're truly on our way."

Still, at least two of the projects that are targeted for China Energy's investment — natural gas power plants in Brooke and Harrison counties — have been in the works for some time. And, so far, there have been more questions than answersabout the details of the deal.

Last week's announcement by the Commerce Department said China Energy plans to invest its money in "shale gas development and chemical manufacturing projects" in West Virginia. By way of explanation, the release added that "the projects will focus on power generation, chemical manufacturing, and underground storage of natural gas liquids and derivatives." Planning for the projects "is underway," the release said, and "will proceed in phases over the course of 20 years."

The release noted that Trump and Chinese President Xi Jinping witnessed Thrasher and China Energy President Ling Wen sign a "memorandum of understanding" about the investment.

On Monday, Thrasher said there is an actual list of projects, and explained that his office had initially put together that list in response to China Energy's suggestion that it was looking to invest roughly $80 billion in West Virginia to help address Trump's complaints about a U.S. trade deficit with China. Thrasher said he went through that list with Justice, and then with China Energy, to work it into something that "specifically identified those projects that we were going to go forward with."

Thrasher responded to a question seeking examples of the projects by saying that he "didn't want to get into the specifics of the projects."

When asked if he would make public the project list and the state's "memorandum of understanding" with China Energy, Justice first told reporters that he is "the guy who wants to be so transparent that it's unbelievable," but then referred the question about disclosure to Thrasher. Thrasher said state officials had agreed with China Energy that, "at this point in time, it's not appropriate to release that MOU."

Justice and Thrasher said China Energy had not sought any specific financial incentives from the state beyond what existing programs might provide. They also said the company had not mentioned needing any sorts of changes in existing state laws, rules or regulations — such as the forced-pooling legislation that industry officials have made a priority for them — to make the natural gas projects it wants to fund work.

"It wasn't brought up," Justice said of any changes in state regulation of the gas industry. "None of that was even brought up."

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

John Case
Harpers Ferry, WV

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