where the Appalachia Development Group could develop a
public-private partnership with federal debt backing and DOE
collaboration to accelerate the hub’s development. The purpose
of the LPO and Title XVII is to help emerging technologies
move forward across a very difficult journey from innovation
to commercialization. With the establishment of the Appala-
chia Development Group, the team developed a loan program
application and submitted it.
There are two parts to the application, which Hedrick describes
as a funnel. “The initial screening is the top of the funnel, where
all these companies are trying to get into the Loan Program
Office and get themselves associated with a loan guarantee,”
he says. “Lots of them bounce off the top because of the cri-
teria, but we made it through that part because of our sound
business and technical base. Then you have the narrowing of
the funnel, which is the Part I Application process. It is many
months and many documents of due diligence from the Loan
Program Office and its staff to make sure the applicant’s pro-
gram or initiative is worthy of both consideration and further
due diligence under the Part II Application process.”
It was a difficult journey to get to January 3 when Appala-
chia Development Group received a letter signed by the DOE
inviting them to the Part II Application, but Hedrick says the
payoff was much greater than the time and energy invested.
“Getting that letter emboldened our efforts and invigorat-
ed the team,” he says. “I think more people took notice after
that of our progress from a concept eight years ago to an en-
gineering application for a business solution that creates value
in and of itself.”
Impacting the Mountain State
The difficult journey to a loan guarantee is drawing closer
to the finish line, but it is by no means finished, much like the
journey to the hub’s construction. The Appalachia Develop-
ment Group anticipates it will have to wait about two years to
complete the journey through the Part II Applica-
tion process and earn a conditional commitment ExEdge
from the LPO, and building the hub and getting Older and
it into production will take years.
deeper than
“Just imagine how long it took for Shell to make Marcellus and
a decision and construct,” Hedrick says of the Penn- Utica shales,
Rogersville
sylvania cracker. “The construction of subsurface Shale occurs
storage in its varying locations and cross-country in eastern
pipelines to different manufacturing locations will Kentucky,
also take years. That stick-to-itiveness we have as eastern
Tennessee and
Appalachians—we’re going to have to have that West Virginia.
as we move forward, as the investment rolls out,
as off-take agreements are made and as the busi- Source: www.
aapg.org
ness case continues to expand.”
According to Anderson, the hub’s development timelines
will line up with the execution and construction of the pet-
rochemical sector’s projects. Shell is looking at starting up its
cracker in 2022, and PTT Global will be six years from now
at the earliest.
“The timeline for the storage hub is to have things in place
for the operations of those cracker facilities and other poten-
tial users on the network,” he says, adding that six years is a
reasonable estimate, give or take a couple of years depending
on industry development timelines.
Congratulations, Eric,
on your induction into the
Sharp Shooters Class of 2018!
We are proud of you.
CONGRATULATIONS
SUSAN LAVENSKI
ON BECOMING A
2018 SHARP SHOOTER.
FROM YOUR FRIENDS AT
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SPRING 2018
67