Shell Chemical announced Tuesday it’s moving ahead with plans to build a multi-billion-dollar ethane cracker in western Pennsylvania.
The announcement caps years of anticipation that the Dutch-based conglomerate would build a petrochemical plant near Pittsburgh that would convert natural gas from the region’s gas fields into the building blocks of plastics.
The company says the plant will create 6,000 jobs at the peak of construction and 600 permanent jobs. Construction is expected to start within the next 18 months, and the plant is expected to begin operating “early in the next decade,” according to a statement from the company.
The plant will be built in Monaca, Beaver County, about 35 miles northwest of Pittsburgh, on the site of the former Horseheads zinc plant.
LISTEN: “What Shell’s New Ethane Cracker Means for the Pittsburgh Region”
Business, labor and development leaders were enthusiastic about the announcement. David Ruppersberger, president of the Pittsburgh Regional Alliance, called Shell’s plan a “once-in-a-generation” investment in the Pittsburgh region.
“We haven’t seen anything like this since the steel mills were built in the early 1900s,” Ruppersberger said. “It truly is a game changer in terms of the scale and also the opportunity it creates [from] an employment standpoint—and for the supply chain that is needed to supply a world-class petrochemical facility.”
The plant will receive $66 million in tax breaks from the state over the next 25 years. The arrangement was made during the administration of former Republican Governor Tom Corbett.
Corbett’s successor, current Governor Tom Wolf, said that investment was worth it.
“The most overused term is game-changer, especially with this industry. But this is actually the case. I think this is one of the biggest investments that has been made in this part of the world since World War II.”
GRAPH: Appalachian Ethane Production, By the Numbers
Wolf said he was “elated” when he heard early Tuesday that the company was moving forward with the project. He said the plant could use Pennsylvania’s abundant natural gas to spur manufacturing.
“This is going to create the raw material for manufacture of products in Pennsylvania that are now being manufactured elsewhere but being consumed in the eastern market.”
The facility will take ethane from nearby Marcellus and Utica shale gas wells and convert it into ethylene and related chemicals. Ethylene is used in a variety of manufactured products, from resins and adhesives to plastics and rubber.
John Poister, a spokesman for the Pennsylvania Department of Environmental Protection, said the plant has most of its environmental permits, including the important air permit. The Clean Air Council is appealing that decision.
Joe Minnott, president of the Clean Air Council, said his group is asking that Shell conduct fenceline monitoring of the facility, as the EPA ordered the company to do at a similar plant near Houston.
Air pollution from a cracker can include nitrogen oxides, sulfur dioxide, particulate matter and smog-inducing volatile organic compounds—all of which are regulated by the Clean Air Act.
The plant is expected to be one of the largest sources of smog-inducing chemicals in the region. Because the Pittsburgh region doesn’t meet federal clean air standards, Shell will buy air pollution offsets from nearby facilities that are eliminating or reducing air pollution, Poister said.
“It truly is a game changer in terms of the scale and also the opportunity it creates [from] an employment standpoint—and for the supply chain that is needed to supply a world-class petrochemical facility.”
The plant is expected to draw ethane from the Ohio, West Virginia and western Pennsylvania shale fields, which are rich in ethane and where skyrocketing production have helped the U.S. increase production of the gas. Appalachian ethane production has surged from 66,000 barrels a year in 2005 to 31 million barrels in 2015, according to the U.S. Energy Information Administration. (See graph above.) Some companies have begun exporting this ethane to Europe; Shell’s plant would process it closer to the wells.
Reaction in western Pennsylvania was positive. Allegheny County Executive Rich Fitzgerald called the news “thrilling” in a press release.
“This announcement accelerates our growth to a next level and will provide even more opportunities for our young people,” he said.
Marcellus Shale Coalition President David Spigelmyer said in a statement that Shell’s decision reflected the fact that “manufacturing’s potential is near limitless thanks to our abundant and stable energy supplies from natural gas.”
Beaver County Building and Construction Trade Council President Michael McDonald said he thought the economic boost from the plant would be “phenomenal” and that the site work Shell has done over the past five years in preparation has already kicked off a mini-building boom near the area.
“In Beaver County, we had one hotel forever,” he said. “Now, they’ve built six of them in Monaca and they’re all booked, seven days a week, 24 hours a day since they’ve been built.”
McDonald said that most of the construction workforce would be local and unionized. He said when the drilling boom kicked off in the Marcellus shale 10 years ago, the oil and gas industry imported workers from other states because local workers had no experience working on drilling sites. That’s not the case with the building of a major chemical plant. “There’s nothing they’re going to do here that we don’t already know how to do.”
The Pittsburgh Regional Alliance’s David Ruppersberger said the plant would require an average of 2,500 construction workers over a period of four to six years and would also employ skilled tradesmen like welders, electrical workers and masons. In addition, he hoped the presence of the plant would encourage other petrochemical projects to locate near the Shell facility.
For more on this topic, check out our series The Coming Chemical Boom. In 2013, Allegheny Front energy reporter Reid Frazier traveled to Texas and Louisiana to see how shale gas is fueling the petrochemical boom there—and understand what that could mean for western Pennsylvania.