Shell Pennsylvania Petrochemicals Complex
Construction of the Shell Pennsylvania Petrochemicals Complex along the Ohio River, Beaver County, Pennsylvania in January 2019
|Location||Potter Township, PA|
|Owner(s)||Shell Oil Company|
The Shell Pennsylvania Petrochemicals Complex is an under-construction ethylene cracker plant located in Potter Township, Pennsylvania, United States, that is owned and operated by Shell Oil Company, the American subsidiary of supermajor oil company Royal Dutch Shell. The plant is located near the interchange of Interstate 376 and Pennsylvania Route 18, about 25 miles from Pittsburgh. It is expected to begin operating in the early 2020s, producing over a million tons per year of plastic pellets.
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 was discovered after Shell purchased the property for cleanup; the company informed 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. The deal was one of the largest tax incentives in Pennsylvania's history.
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 in a worst-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. Shell also gave a donation to the Beaver County recycling center so the center could extend its operating hours.
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.
In 2015, Shell began preparing the site for future construction, moving 7.2 million cubic yards of dirt, building new bridges and a new rail line, and completing a total relocation of PA Route 18. Docking and bulkhead facilities to be used during construction were created by Alberici. Construction on the plant itself began on November 8 2017, and is expected to continue through the early 2020s. As of 2019, over 5,000 employees are working on construction. The site will have four processing units – three of which will be polyethelene crackers and one an ethane cracker – a natural gas power plant to support both the plant and the local electric grid, a 900 ft (270 m)-long cooling tower, a rail system with over 3,000 freight cars, numerous loading facilities for both trains and trucks, a water treatment plant, an office building, a laboratory, and an innovation center once construction is complete.
On September 20, 2018, two of the world's largest cranes arrived on site. The largest of the pair is almost 700 feet (210 m) tall and can lift 3,500 tons at a time, and is used around the globe on megaprojects. The smaller of the two is 430 feet (130 m) tall and can lift about 2,300 tons in its current configuration.
The Pennsylvania Department of Environmental Protection approved two permits for a 97 mi (156 km)-long pipeline that will lead to the cracker plant on December 20, 2018. Called the Falcon Ethane Pipeline, it will connect ethane sources in Houston, Pennsylvania, Scio, Ohio, and Cadiz, Ohio to the plant. Construction on the pipeline began in March 2019.
Shell will also construct an 85,000-square-foot innovation center at the site of the plant, including labs, a "Center of Expertise", and an application hall. It is expected to be operational at the same time as the rest of the site.
Regional 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. In 2018 Mount Airy Casinos won the licensing to build a satellite casino just 12 miles (19 km) north of the cracker plant, planning to open in 2020.
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.
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.
Residents have also expressed concerns about the network of pipelines that will carry ethane to the plant, as existing pipelines have already caused problems. In September 2018, a landslide caused by heavy rains caused the Revolution pipeline, operated by Energy Transfer Partners, to explode. One house was destroyed, other homes and vehicles were damaged, power lines were downed, and roads were closed; no one was injured.
- Corkery, Michael (August 12, 2019). "A Giant Factory Rises to Make a Product Filling Up the World: Plastic". The New York Times. Retrieved August 12, 2019.
- "Remarks by President Trump During Tour of the Shell Pennsylvania Petrochemicals Complex | Monaca, PA". The White House. August 13, 2019. Retrieved August 18, 2019.
- Fadulu, Lola; Haberman, Maggie (August 13, 2019). "At Chemical Plant Under Construction, Trump Builds List of Grievances". The New York Times. Retrieved August 18, 2019.
- "Shell Pennsylvania Petrochemicals Complex – Early Works". Alberici. Retrieved August 18, 2019.
- 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 September 19, 2017.
- "Location and tax breaks key to Shell's Pennsylvania cracker plant approval". analysis.petchem-update.com. Petrochemical Update. July 8, 2016. Retrieved September 19, 2017.
- "What's An Ethane Cracker? (article list)". NPR. Retrieved September 19, 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.
- Stonesifer, Jared. "Shell officially starts construction on $6 billion ethane cracker plant". The Times. Retrieved February 12, 2019.
- Pennsylvania, Jared StonesiferGateHouse Media. "Two of world's largest cranes come to Pennsylvania construction site". Athens Banner-Herald. Retrieved February 12, 2019.
- Stonesifer, Jared. "Shell CEO: Cracker plant project ahead of schedule, within budget". The Times. Retrieved February 12, 2019.
- "DEP approves ethane pipeline to Shell's cracker in Beaver County". StateImpact Pennsylvania. December 20, 2018. Retrieved February 12, 2019.
- "Falcon Ethane Pipeline System". www.shell.us. Retrieved February 12, 2019.
- Stonesifer, Jared (March 14, 2019). "Shell's Falcon ethane pipeline enters construction phase". The Times. Retrieved August 3, 2019.
- Stonesifer, Jared. "Shell to build innovation center at Potter Township cracker plant site". The Times. Retrieved February 12, 2019.
- Officials: Shell's decision to build here will be felt in Beaver County for decades The Beaver County Times (06/07/2016)
- Jared Stonesifer (August 2, 2017). "Major renovations, reopening planned for Rochester's former Penn-Beaver Hotel". The Beaver County Times. Retrieved August 14, 2019.
- Kurutz, Daveen Rae. "Northern Lights owners planning to demolish part of shopping plaza". The Times.
- "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.
- Phillips, Susan; Frazier, Reid (September 10, 2018). "Natural gas pipeline blast in Beaver County prompts evacuation". StateImpact Pennsylvania. NPR. Retrieved August 12, 2019.
- Sandoval, Polo (September 10, 2018). "Natural gas line explosion leads to evacuations in western Pennsylvania town". CNN. Retrieved August 12, 2019.