Shell’s $6 billion ethane cracker in Beaver County could be the first of several large chemical plants in the region, petrochemical industry leaders and observers said at a conference in Pittsburgh Monday. That’s because there’s enough ethane being produced in the region to provide the chemical industry with the raw material without any additional drilling.
“It’s very difficult to hide the secret,” said Warren Wilczewski, a U.S. Energy Information Administration economist who attended the conference. In the Pennsylvania, Ohio and West Virginia region, production has grown almost 10-fold since 2011, Wilczewski said. “By our calculations, you could easily have another two or three world-scale crackers.”
LISTEN: “There’s Enough Gas for Several More Crackers, Industry Says”
Shell’s cracker will use ethane, a byproduct of natural gas drilling, to make the building blocks of plastics. Currently, the region’s ethane is sent to chemical plants in the Gulf Coast, Ontario, and Europe. But whatever ethane can’t get sold to plastics manufacturers is “rejected”, or mixed in with the gas that supplies homes and businesses for heating and cooking.
Wilczewski said if all that leftover “rejected” ethane were instead used to make plastic, the region would have more than enough for several big chemical plants without an increase in drilling activity.
“Right now all you need is additional infrastructure and you could be getting all that ethane without additional natural gas production, and at current levels of drilling and exploitation,” Wilczewski said.
Martha Moore, Senior Director of Policy and Economics at the American Chemistry Council told the conference there were $185 Billion in petrochemical projects either planned or built since 2010 in the U.S., mostly on the Gulf Coast. She said that was the equivalent of 40 percent of the replacement cost for the entire U.S. chemical infrastructure.
Moore said that in the Appalachian region, there could be a total of 25,000 direct jobs in petrochemicals, if the industry maxes out its capacity in the region.
Earlier this year, a report funded by the state of Pennsylvania found the region could support four ethane crackers in addition to Shell’s facility, which is slated to be online by 2021 or 2022.
Shell’s cracker will provide 6,000 construction jobs and 600 permanent ones. The company will receive $1.6 billion in tax breaks from the state over 25 years.
In addition to Shell’s plant, which is scheduled to begin operations early next decade, companies are currently considering building ethane crackers in Ohio and West Virginia.