Responding To The Shale Gas Boom
From extraction and production to supply chain, shale gas development provides an opportunity for economic growth. Six major shale gas formations are located, in part, across eight of eleven states in AEP’s service territory, including two of the fastest growing – Utica and Eagle Ford – located in Ohio, West Virginia and Texas. AEP’s Economic and Business Development team provides expertise and tools for oil and gas companies and suppliers to explore opportunities for relocation and help identify the most cost-effective locations. This collaboration creates mutual benefits, including job creation and accessible and efficient supply chain or electric demand growth.
Shale gas development is a challenge and an opportunity for AEP. Oil and gas companies are able to build and develop pipelines more quickly than we are able to build transmission and distribution lines to support their facilities. Their timelines are aggressive, and competition to serve these customers is high. In many cases, the locations require new transmission facilities in order to connect these new customers. Quick, reliable service is critical to securing these customers, and a coordinated effort between AEP and the oil and gas companies is necessary to ensure we have the equipment and facilities in place to meet their needs in a timely fashion. In West Virginia, Transmission employees and contractors worked around the clock to complete a new 138-kilovolt service ahead of schedule for critical shale gas customers near Majorsville, W.Va. Being innovative and delivering good customer service positions AEP to take advantage of emerging business opportunities across our service territory.
AEP Transmission installed its first “station in a box” in Catarina, Texas, in 2012, a unique pre-packaged substation design that can be built in about half the typical construction time frame of a traditionally built permanent station. The shale gas development in Oklahoma, West Virginia, Texas and Ohio has companies racing to extract the fuel deep beneath the earth’s surface, sometimes in very remote locations. The natural gas companies cannot wait the typical 12 to 18 months for the completion of a traditional substation. To serve these customers’ needs quickly, AEP Transmission developed a “skid station” – a portable station on a skid that can be installed in a matter of weeks before the station in a box can be built for permanent service. By creating a basic yet high-tech skid-mounted substation, we can deliver power in just four to eight weeks. Read more about these innovations in Innovation & Technology.
AEP’s transmission strategy has supported several economic development opportunities throughout our service territory. Three steel manufacturers relocated and expanded their operations in response to AEP’s growing need for transmission steel poles and lattice towers. One steel pole manufacturer expanded its capacity by adding a plant in Hicksville, Ohio, a recession-strapped community in AEP Ohio’s service territory. The company secured a suitable manufacturing site with a skilled work force, returning more than 200 jobs to Hicksville, and AEP secured a large customer and supply line to support our growing transmission business.