Pennsylvania Shell ethylene cracker plant
|Location||Potter Township, PA|
|Owner(s)||Shell Oil Company|
The Pennsylvania Shell ethylene cracker plant is a proposed chemical plant in Potter Township, Pennsylvania near Pittsburgh that will be owned and operated by Shell Oil Company, the American subsidiary of supermajor oil company Royal Dutch Shell. The plant will be located near the interchange of Interstate 376 and Pennsylvania Route 18, expecting to open in the early 2020s.
History of the site
The site of the proposed plant has had a long history as an industrial site. Both Horsehead Corporation and Koppers had plants on the site of the proposed plant, the latter company unofficially incorporating the area as Kobuta. Before its industrial use, the area had been farmland owned by a local family, which included a private cemetery (albeit with unmarked graves) that would later be discovered after Shell purchased the property for cleanup and would inform living descendants in the area of the skeletal remains.
Pennsylvania, Ohio and West Virginia engaged in a tax competition for the plant. In 2012 Pennsylvania structured a deal requiring Shell to invest at least $1 billion in Pennsylvania and create at least 2,500 construction jobs in exchange for a 25-year tax incentive of $66 million per year and tied to production, reducing Shell's tax by up to 20 per cent. The combined incentive could reach $1.65 billion. Shell announced the Pennsylvania site on March 15, 2012.
Shell began leasing the bulk of the property from Horsehead in 2012, which promptly closed the zinc plant on the site and began cleanup of the site in preparation of potentially opening a cracker plant on the site, which would be used to convert natural gas products into ethylene and then into plastics. Shell had selected the site due to the ongoing Marcellus natural gas trend and the site's prime location within the Marcellus Shale. By 2015, after executing several short-term lease extensions, Shell purchased the property outright from Horsehead, and subsequently purchasing other nearby properties, effectively absorbing all of Kobuta.
Shell pledged with Beaver County officials on environmental cleanup regardless if it opened the proposed plant, and at a worse-case scenario prepare the area land for at least some sort of future industrial use if Shell decided not to build there. This included building a massive bridge over PA 18, commenced in 2015, to connect both sides of the property without requiring an intersection along the route, as well as a Shell-funded rerouting of PA 18 and infrastructure improvements to I-376.
Despite a downturn in oil prices, on June 7, 2016, Shell announced it would build the plant. In a press release, Shell stated that 70% of polyethylene customers in North America are within a 700-mile (1,100 km) radius of Pittsburgh and that the location would be more cost-effective for its customers than at existing facilities along the Gulf Coast, which unlike North Central Appalachia are susceptible to the Atlantic hurricane season.
Potential economic impact
The opening of the cracker plant is expected to have a major economic impact on both the immediate area and the Pittsburgh metropolitan area in general. The plant is expected to create 6,000 construction jobs to build the site and 600 permanent jobs for employees working at the plant. It is also expected to expand neighboring Center Township, which had already seen a hotel construction boom in anticipation of the plant, as well as keep the Beaver Valley Mall afloat. A building dating to the 1920s in nearby Rochester that once served as a luxury hotel is being restored as such due to demand of the plant, while parts of the Northern Lights Shopping Center in Economy is being demolished for redevelopment, partially due to the plant.
The plant is also expected to spur long-delayed highway expansion projects. The Southern Beltway, which had already confirmed would be extending its second leg in 2020 from U.S. Route 22 to Interstate 79, moved the project up a year solely as a result of the proposed plant. In West Virginia, Interstate 68 has been proposed to be extended from Morgantown (where it currently terminates with I-79) to Moundsville (where it would terminate with West Virginia Route 2 just south of Wheeling) in response to Marcellus fracking as well as the proposed plant.
Opposition to project
In late 2015, a group of environmentalists submitted an appeal to Pennsylvania's Environmental Hearing Board to challenge the air quality permit that was granted for the proposed plant; the group argued that the state should have required stricter monitoring requirements for fugitive pollutant emissions from the plant.
- Shell takes final investment decision to build a new petrochemicals complex in Pennsylvania, US Royal Dutch Shell (June 7, 2016)
- Shell confirms it will build cracker plant in Potter Twp. The Beaver County Times (June 7, 2016)
- Investigation underway to identify bones found on Shell site The Beaver County Times (August 20, 2015)
- Bumsted, Brad (June 7, 2016). "Pennsylvania tax incentive plan played major role in luring Shell cracker plant". TribLIVE.com. Pittsburgh Tribune-Review. Retrieved 19 September 2017.
- "Location and tax breaks key to Shell's Pennsylvania cracker plant approval". analysis.petchem-update.com. Petrochemical Update. July 8, 2016. Retrieved 19 September 2017.
- "What's An Ethane Cracker? (article list)". NPR. Retrieved 19 September 2017.
- Shell to build billion-dollar 'cracker' in Beaver County Pittsburgh Post-Gazette (March 15, 2012)
- Shell buys Horsehead property for $13.5 million for proposed ethane plant Pittsburgh Post-Gazette (June 15, 2015)
- Shell buys former Kobuta Hotel property in Beaver County Pittsburgh Business Times (March 24, 2016)
- Stonesifer, Jared (August 30, 2015). "Shell Chemicals starts building bridge over Route 18 in Potter Township". The Beaver County Times. Retrieved July 23, 2016.
- Officials: Shell's decision to build here will be felt in Beaver County for decades The Beaver County Times (06/07/2016)
- "Corbett breaks ground for new Southern Beltway leg". Pittsburgh Post-Gazette. May 12, 2014.
- Fluharty, Nate (September 15, 2014). "Plans Moving Forward for Moundsville-to-Morgantown Highway". Wheeling, WV: WTRF-TV. Retrieved September 16, 2014.
- Frazier, Reid (August 6, 2015). "Enviro groups appeal air permit for Shell's ethane cracker". StateImpact Pennsylvania. National Public Radio. Retrieved August 14, 2016.