Anticipation building for proposed cracker plant in Beaver County

August 8, 2015
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Associated Press
This 2010 photo shows an entrance for the former Horsehead Inc. zinc plant near Monaca. Shell Oil Co. is considering the construction of a gas cracker plant at the site.
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Courtesy of Shell Oil Co.

Tony Amadio is crackers about a cracker plant.

“This is going to be a game-changer for us,” said Amadio, chairman of the Beaver County commissioners, who is upbeat about the possibility Royal Dutch Shell will build the petrochemical facility on county turf, in Potter Township near Monaca.

“Forty years ago, we had major steel here,” said the retired teacher and lifelong county resident. “That went away and didn’t come back, and probably won’t. Now, we may have a new industry.

“We’re sitting back, waiting for the announcement, and if it goes the way we think, we’ll see an economic explosion we haven’t seen around here since the early 1900s.”

Although it hasn’t decided to build there, Shell Oil Co. – a division of the massive Dutch firm – has taken action that buoys the spirits of many locals. It shelled out millions for real estate, site preparation and the rerouting of a major roadway, and will likely shell out millions more even if it doesn’t go through with the multibillion-dollar project.

The company paid more than $27 million for county land, about half of that total for the 400-acre former Horsehead zinc smelter property, the rest for a dozen tracts nearby. The firm is paying for development and remediation of the Horsehead property, rerouting of Route 18 and air and water permits that were approved in late June by the state Department of Environmental Protection.

That’s a lot of bucks, but Royal Dutch Shell is one of the world’s largest companies, with appropriately deep pockets. So, it can invest in Southwestern Pennsylvania without locating a cracker there. Yet, if it does, Amadio’s “economic explosion” could, indeed, take place – in Beaver County and beyond.

“We’ve been told it would bring opportunities for a manufacturing renaissance for all of us in the region,” said Robbie Matesic, executive director of the Greene County Department of Economic Development.

Greene and Washington counties would be among the tri-state beneficiaries of a cracker, and the advantages could be long term. Thousands of skilled and unskilled workers would be needed to construct the plant, which would take five to six years. Then, once operational, the facility would require a workforce of 400 to 500 on-site.

Regional supply chain industries may realize the biggest bonanza: an estimated 16,000 to 18,000 jobs. And, a complex of this type could draw new industries and businesses within a 75-mile radius.

“This could be a tremendous opportunity for everyone in Southwestern Pennsylvania,” said Don Chappel, executive director of Greene County Industrial Developments Inc.

“The tri-state area is getting a unique opportunity to watch an energy transition,” Matesic said. “We have an amazing window.”

‘Cracker’ facts

Shell has a website – www.shell.us/poly-e – devoted to the Beaver County proposal. Maps, definitions, explanations, clarifications and much more are there. The “About the project” tab, which includes a step-by-step drawing of the manufacturing process, is especially informative.

Ethane is the preferred byproduct of a cracker plant. Ethane, propane and butane are natural gas liquids found in some natural gas products. Interstate 79 is generally regarded as the demarcation line between wet gas (west of I-79) and dry (east).

Those NGLs are separated – “cracked” – before ethane is sent to the cracker, where its molecules are separated and rearranged to create ethylene, the feedstock for plastic and other products.

There are concerns associated with a cracker plant, to be sure. The Allegheny Front, an environmentally related radio program in Pennsylvania, says on its website alleghenyfront.org: “Ethane crackers have the potential to emit large amounts of ethylene, propylene, and other so-called ‘highly reactive Volatile organic compounds’ (into the air). These are chemical compounds that can react quickly in sunlight to form ground-level ozone, or smog.”

The potential benefits of a cracker, however, are profound and enticing.

If built along the Ohio River, this would be the first U.S. cracker plant erected outside the Gulf Coast in 20 years. The overriding question, of course, is: Will that facility materialize? One news report, in May, quoted a top Shell official as saying the company would make a decision soon.

That hasn’t happened, and the timetable remains uncertain. Representatives at Shell’s national headquarters in Houston, Texas, did not respond to phone messages from the Observer-Reporter.

Officials and residents of Beaver County in favor of the cracker complex knew the decision process would be lengthy. Three and a half years have passed since Shell announced it was considering the Horsehead site.

Shell’s attraction to the Beaver Valley is logical on many fronts. Access to river, rail and major roadway transportation is ideal. Pittsburgh International Airport is a 25-minute drive to Monaca for corporate visitors. And wet gas from the Marcellus and Utica shales is nearby and abundant.

The counties south of Beaver have their share of NGLs and appeal to the petrochemical giant, as well. Washington and Greene, in turn, share an affinity for what Shell may provide in their region.

“We have plenty of ethane to send there,” said Washington County Commissioner Harlan Shober. “A cracker plant would be critical to providing jobs. I think the impact would be really, really great, and not just for Southwestern Pennsylvania, but for Ohio and other areas.”

He added that eventual construction of the Southern Beltway would shorten the distance between Washington County and Potter, making it an easier commute for plant employees.

Jeff Kotula, president of the Washington County Chamber of Commerce and Tourism Promotion Agency, understands why a cracker is possible here.

“This project ... would have never been of interest to a company like Shell if it were not for the tremendous opportunities the energy industry has brought to our region over the past decade,” he said in an email. “The energy industry, and natural gas in particular, have been a game-changer for our region.”

Range Resources, a major player in Marcellus Shale, endorses a Beaver Valley cracker, as well.

“We are fully supportive of efforts to bring additional demand and use of Pennsylvania gas production to this region,” Matt Pitzarella, spokesman for the gas exploration and production company, said in an email.

“Increasing local usage would be a major victory for this region, as it will help to support local drilling jobs while adding manufacturing jobs, increasing the tax base (and) promoting Pennsylvania as a premier supplier of energy and energy-related products.”

As gas grows ...

Coal is on the outs – locally, nationally and globally. Jobs are being eliminated, mines are being shuttered and a lifestyle is disappearing amid low prices and demand for the fossil fuel and, more recently, the Obama administration’s crackdown on CO2 emissions.

Greene and Washington counties are but two areas acutely aware of this.

“About 35 percent of our county budget is based on coal assets,” said Matesic, the Greene economic development director. “Looking at the economic impact of coal, it’s in the trillions of dollars. The cascading effect will be very harsh.”

Harsh, indeed.

Alpha Natural Resources, once a coal industry giant, filed for Chapter 11 bankruptcy protection Monday. About a year ago, the company announced it would close Emerald Mine outside Waynesburg in 2015. About 500 workers will be affected, some retiring, some moving to Cumberland Mine in Greene. Some may be without jobs.

The state of the industry is difficult to comprehend for many with a vested interest.

“Miners may not understand that permanent changes are taking place,” Matesic said.

“I worked in the Emerald Mine for 15 years,” Chappel said. “I never thought coal would go by the wayside.”

But when life gives you lemons, make lemonade.

Matesic said a Western Pennsylvania cracker plant “could open up new opportunities” for dislocated miners and others out of work, either at the Beaver facility or with a company in the cracker supply chain.

Some already would have the transferable skills. Ami Gatts, president of the Washington-Greene County Job Training Agency, said those individuals could register with CareerLink, which has centers in Washington, Donora and Waynesburg.

“CareerLink looks at skills the employer needs and tries to match them with workers.”

There also are job-training initiatives. Gov. Tom Wolf proposed restoring $10 million in the budget for industry partnership workforce training across the state. Gatts said her board, which also serves Beaver County, would focus on four work areas: advanced manufacturing; logistics and transportation; building and construction; and energy.

She also stressed the importance of drawing and training youth – by promoting trades at local high schools and job fairs, and by making them aware that trade schools offer a variety of classes, including welding and steamfitting.

Winning either way

Frank Mancini, like Tony Amadio, is a Beaver County official and cracker advocate. He is director of Planning and Economic Development and executive director of the Redevelopment Authority. Mancini said he likewise is “upbeat” about Potter’s chances.

“I see the activity, and I’m positive that we have taken an existing brownfield site and are in the midst of developing it,” Mancini said.

Both are well aware that, despite all of the money, labor, time and legal due diligence invested, Shell’s game plan may not include Beaver County. But even if that happens, they, their region and a former brownfield will have benefited.

“(Shell has) redeveloped 400 acres of flat property at Horsehead,” Mancini said. “That doesn’t happen often east of the Mississippi.”

“We’re told they could still walk away,” Amadio said. “But if they do, they’ve created a wonderful site for us. We’re excited about this.”

Construction of the Shell facility, however, would excite a number of tri-state residents, especially those from the shale gale counties of Washington and Greene. Natural gas has had a major impact on the southwesternmost corner of the state over the past decade and has the potential to be even bigger.

“Actually, we’re early in the ballgame on energy,” Matesic said.

“And if the cracker comes in,” Chappel added, “we’ll be at third base.”

Rick Shrum joined the Observer-Reporter as a reporter in 2012, after serving as a section editor, sports reporter and copy editor at the Pittsburgh Post-Gazette. Rick has won seven individual writing awards, including two Golden Quills.

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