Officials around the state are optimistic about the impact of Shell’s new ethane cracker on the local economy. It will bring thousands of construction jobs to western Pennsylvania and 600 permanent ones once it’s built along the Ohio River in Beaver County. The plant will produce 1.6 million tons of plastic a year out of the region’s natural gas.

But Jim Fabisiak, an environmental and occupational health professor at the University of Pittsburgh, is concerned about another impact on the area—how the facility could affect air quality.

LISTEN: “How Shell’s Ethane Cracker Will Impact Air Quality”

At his office, Fabisiak pulls out a sheet of paper with a simple line graph on it. It shows the amount of industrial pollution in Beaver County for volatile organic compounds, or VOCs. These are a broad class of chemicals that help form ground-level ozone, or smog, which can exacerbate asthma and other lung problems.

“There’s a steady improvement,” Fabisiak says. “From 1999 to current, there’s been about a 50 percent reduction in VOCs released by industry over time. That’s significant progress in air quality.”

But beginning in 2016, the line on Fabisiak’s paper starts going up, and up, until the year 2021. That’s the year Shell’s ethane cracker is slated to come online in Beaver County.

“Adding the cracker to this point in time brings the levels greater than what we’ve seen in 1999,” Fabisiak says.

In fact, with a projected 522 tons of VOC emissions per year, the plant would be the largest source of VOC pollution in western Pennsylvania, according to the most recent data available in the EPA’s 2011 National Emissions Inventory. It would be the third largest source in the state, behind an oil refinery in Philadelphia and a styrofoam plant in Reading.

The next largest nearby VOC polluter is U.S. Steel’s Clairton Coke Works, with 336 tons. In addition, the cracker is classified as a major source of hazardous air pollutants like benzene and formaldehyde, which can cause cancer and other serious health problems.

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Fabisiak says these emissions are a concern because Pittsburgh’s air already fails to meet federal standards for several pollutants—including ozone—and routinely ranks poorly in national air health surveys.

Because of these emissions, environmental groups are appealing the cracker’s air permit and asking the state to require Shell to install air monitors next to the plant.

But Shell and state officials say the cracker isn’t a threat to public health.

Mark Gorog, air quality program manager for the Pennsylvania Department of Environmental Protection’s Southwest region, says since the Pittsburgh metro area doesn’t meet federal air standards, Shell has to install modern controls for pollutants like nitrogen oxides and install a leak detection system in the plant itself.

“Their emissions limitation has to be at least as stringent as the best [technology] out there,” Gorog says. “So the technology they install has to be the ‘latest and greatest.'”

In addition, the company had to show the DEP that its plant wouldn’t make the air unhealthy in Beaver County.

“They modeled to show they will not cause an exceedance of [federal air standards], and they did a risk estimate for [hazardous air pollutants] that showed there was not going to be an undue risk to the public,” Gorog says.

On top of these measures, the company will buy more than 1,000 tons of pollution offsets to make up for the pollution that will come from its smokestacks, storage tanks and flares. These offsets are called Emissions Reduction Credits, or ERCs. They work kind of like a cap-and-trade system. The idea is that a company that wants to build a facility that would add pollution to an area, like Shell, pays other companies to clean up emissions at existing facilities. The way they do this in many states is by buying credits from a plant that is either closing or installing pollution controls.

Under state law, Shell is allowed to buy credits from plants that are already closed. The University of Pittsburgh’s Jim Fabisiak says this means pollution that’s been gone from the region will be coming back—in the form of emissions from Shell’s ethane cracker.

“I don’t see that as improving the air quality to any great extent. It’s like three steps forward 2.99 steps back,” Fabisiak says.

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Workers prepare a site in Beaver County for Shell’s multi-billion dollar ethane cracker. Photo: Reid Frazier

For instance, the company is buying 70 tons of credits from FirstEnergy for two coal-fired power plant units it closed in Armstrong County in 2012. It’s also buying 100 tons of credits from FirstEnergy’s closed Mitchell Power Station, which ceased operation in Washington County back in 2013.

Fabisiak says the best way for the system to work would be for Shell to buy credits for future cuts to pollution—from, say, a company investing in new pollution reductions at a power plant.

“If everyone’s still staying in the area and operating, that results in slow decreases in the amounts of emissions over time,” Fabisiak says.

The Department of Environmental Protection (DEP), which approved Shell’s plan, doesn’t see a problem with how the pollution credit system is working. Under state law, closed facilities have 10 years to sell their emissions credits. The DEP’s Mark Gorog says new plants have to buy 15 percent more pollution credits than they will actually emit. So if Shell wants to emit 100 tons of pollution, it will have to buy credits for 115 tons.

“Over time, what the [ERC program] does is shrink the pool of emissions and bring the area into [federal air rules] attainment,” Gorog says.

This won’t happen overnight. Krishnan Ramamurthy, acting director of DEP’s Bureau of Air Quality, says its plans call for the region’s air to meet federal guidelines within five years. He says the emissions credit program actually helps them reach that goal by providing incentives for companies to clean up.

“The emissions reduction credits have a cash value. It’s supply and demand,” Ramamurthy says.

And if demand goes up—for example, if more companies want to build new plants alongside Shell’s facility—then the price of the emissions credits will go up too. And that could encourage companies to close or clean up older, dirtier plants.

“They can put additional controls to justify the control cost by selling some of their credits,” Ramamurthy says.

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U.S. Steel’s Clairton Coke Works, pictured here, is one of the region’s biggest sources of VOC pollution, with 336 tons of annual emissions. The ethane cracker’s 522 tons of projected VOC emissions would make it the largest source of VOC pollution in western Pennsylvania. Photo: Mark Dixon via Flickr

Currently, credits in Pennsylvania are reportedly selling for $2,000 to $10,000 a ton. That puts the price tag for Shell’s credits in the $2 to $10 million range.

In an emailed statement, Shell declined to say how much it spent on its emissions credits. But a company spokesman emphasized the plant was built on the site of the Horsehead zinc smelting plant, which had a heavy environmental footprint of its own. Some of Shell’s pollution credits actually came from that plant, which closed in 2014.

With or without Shell’s ethane cracker, DEP officials admit it won’t be easy for Pittsburgh to meet federal air standards in the future—especially after the EPA enacted stricter rules for ozone last year.

“It is working,” Gorog says. “There are areas being [cleaned up]. But part of the issue is EPA has ratcheted down limitations on [air pollution] over the years, so it’s kind of a moving target for us.”

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This story is part of our series “The Coming Chemical Boom,” which is funded in part by the Fund for Investigative Journalism. Want to know exactly how ethane crackers work? Check out our FAQ.