2 Reasons Why West Virginia Will Be the New Job Haven
Glancing at a West Virginia license plate reminds us that the state is "wild and wonderful." And it is. Due to the U.S. energy boom, though, a new swarm of long term inhabitants—humans embracing new jobs—are encroaching on the wonderful, wild space.
A storied history
West Virginia's coal industry dates back to the early 1800's, but the installation of the railroad during the 1880's catapulted the state's energy business. Moving into the twentieth century, companies like Consolidated Coal, now CONSOL Energy (NYSE: CNX), began hiring at rapid paces, expanding their operations—even to today. In 2011, for instance, West Virginia was the second largest coal-producing state in the nation, and 96% of the state's electricity was generated through coal-powered plants.
Now, the state will be adding a new source to its job and energy history: natural gas.
Decade-long job growth
Last month CONSOL divested its mature, West Virginia coal mines to privately held Murray Energy Corporation in a deal valued over $3.4 billion, including $850 million in cash. While still maintaining other coal mines focused on the export market, CONSOL is dedicated to its new strategy: growing the natural gas business segment -- and West Virginia's job market.
During a distinguished speaker series last week at West Virginia University, CONSOL Chairman and CEO Brett Harvey reaffirmed his commitment to the state. Harvey discussed how CONSOL's existing natural gas footprint will require "a significant amount of labor and capital" and how the firm will continue to grow within the region. For example, CONSOL already plans to invest over $14 billion in the state over the next decade. The capital will primarily be used to explore and develop natural gas resources requiring employees, contractors, and many others—drivers, technicians, welders, manufacturers, and business professionals, just to name a few. Simply stated, jobs in West Virginia are key to the company's success.
Building the future
With a leading midstream presence in the Northeast, MarkWest Energy Partners is literally the type of company that is transporting America to potential energy independence. It currently has 21 key processing and fractionation projects in the construction phase, and it recently began operations of its Majorsville complex in West Virginia. This is significant on two fronts.
First, the plant processes up to 200 million cubic feet of natural gas per day (MMcf/d) for companies like Chesapeake Energy Corporation (NYSE: CHK). Both Chesapeake and MarkWest are in a beneficial, long-term, fee based arrangement, and Chesapeake's rising production per well and its production growth in natural gas liquid and oil benefits MarkWest.
The arrangement enables Chesapeake to channel its resources within a focused 185 mile square mile area through MarkWest's processing plants—now including the newly functional West Virginia facility. Plus, the Majorsville plant is expected to add additional capacity by the first quarter of 2014 so it can process another 200MMcf/d and a second plant to be completed in 2016.
The second key benefit for West Virginia's job landscape is that MarkWest is installing its second large scale de-ethanizer at the Majorsville facility. As a result, purity ethane fractionation capacity is expected to double, further enabling the producers to increase their downstream ethane pipeline commitments.
A job-seeker's dream
Given the long-term, capital intensive process of exploring, producing, processing, and transporting natural gas and other resources, CONSOL Energy and MarkWest Energy Partners are proving they are committed to West Virginia—for the long haul. West Virginia's coal history is being supplemented by natural gas—driving a new era in the state's job creation market.
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The article 2 Reasons Why West Virginia Will Be the New Job Haven originally appeared on Fool.com.Brendan Marasco has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.