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Beaver Valley Today
TODAY!
(March 15, 2012)

Royal Dutch Shell will evaluate a site that spans the Potter-Center township border for a multi-billion dollar gas “cracker” plant, the company announced March 15.

Shell subsidiary Shell Chemical LP signed an option agreement with Horsehead Corp. to evaluate the 300-acre site.

The former J&L/LTV steel site in Aliquippa, which was believed to be on Shell’s short list, could still be targeted for a smaller plant by another company.

Shell’s announcement ends a months-long competition among Pennsylvania, West Virginia and Ohio for a petrochemical facility that could create thousands of jobs and attract other major businesses.

“Cracker” plants can turn the Marcellus shale gas found in the region into the basic chemicals used the manufacture of plastics.

The LTV site, owned by Charles Betters’ Bet-Tech  International, has river and rail access, and the state recently spent more than $2 million to build a boat dock there.

It could be very attractive to another company looking to build a petrochemical plant in the Marcellus shale gas region, such as West Virginia’s Aither Chemicals, which is being assisted by Pittsburgh’s Renewable Manufacturing  Gateway.

Betters, as well at state and county officials, are under confidentiality agreements regarding the expansive tract of riverfront property on which once stood J&L Steel's Aliquippa works

The J&L/LTV site covers more than 500 acres, and  Betters has been working to redevelop the tract since the early 1990s.

“The decision by Shell Oil to sign a land option agreement to locate an ethane cracker plant in Beaver County is an important first step in a long process, but is exciting news for industrial development and job growth in Western Pennsylvania," said State Rep. Jim Christiana.

“A cracker plant in Beaver County would bring thousands of direct and indirect construction and production job opportunities along with billions of dollars in private investment to our region," Christiana said.

"It could produce the next generation of industrial and economic prosperity for Western Pennsylvania."

Thousands of jobs likely

Washington, D.C.-based American Chemistry Council estimates that a plant the size of the facility planned by Shell would employ nearly 2,500 people in the chemical industry and another 6,000 in related activities.

Shell Oil itself estimates that the cracker plant would employ 10,000 people short-term, and several hundred thereafter.

The company said the plant could cost at least $2 billion to build, and — much like a major retailer such as a Wal-Mart attracts numerous other retailers and restaurants — is likely to result in various smaller facilities nearby.

According to Pennsylvania U.S. Sen. Bob Casey, some estimates indicate that the construction of an ethane cracker could attract up to $16 billion in private investment.

"Pennsylvania has everything needed to make it a top choice for Shell’s facilities," Casey wrote to Shell president Mark Quartermain. "We have a proven work force, access to water, communities with a long history of working cooperatively with industry, an extensive rail transportation network and appropriate real estate.”

The benefits to existing businesses and the local real estate market would also be significant.

Ethylene produced from natural gas

Sparked by the boom in Marcellus shale natural gas drilling, Shell announced last summer that it was developing plans to build a "world-scale ethylene cracker" in the Appalachian region of the United States.

The plant would process ethane from natural gas to produce ethylene, one of the primary building blocks used by the petrochemical industry to create everyday items such as packaging and adhesives to pipe and automotive parts.

"Building an ethane-fed cracker in Appalachia would unlock significant gas production in the Marcellus region by providing a local outlet for the ethane," Shell executive vice president Ben van Beurden said at the time.

Regarding when the company planned to announce a decision, media relations coordinator Kayla Macke would only say, "We expect to make the decision on the site selection in early 2012."

Shell not the only player

West Virginia-based Aither Chemicals also is looking to establish ethane-processing plants in the Marcellus shale region, and could now turn its focus to the Aliquippa site.

Aither and its Pittsburgh-based partner, Renewable Manufacturing Gateway, a nonprofit job-creation group, have identified suitable sites in western Pennsylvania, Ohio and West Virginia.

Originally at least, Aither's plant would not be on so large of a scale as the plant proposed by Shell.

Bayer Corp. officials are hoping to lure a cracker plant to one of two West Virginia sites Bayer owns: one near New Martinsville and the other at Institute, which is near Charleston.
Shell chooses former Horsehead site for cracker
What is cracking?

Cracking is the process whereby complex organic molecules such as hydrocarbons are broken down into simpler molecules.

More loosely, outside the field of petroleum chemistry, the term "cracking" is used to describe any type of splitting of molecules under the influence of heat, catalysts and solvents.

An ethane cracker converts natural gas into the basic elements of plastic, such as ethane, ethylene and polyethylene.

The abundant supply of natural gas rising from drilling in the Marcellus shale formation is a signifcant issue driving the construction of cracker plants.

And while the market for ethylene has been known to fluctuate, it remains the major petrochemical in the world based on high demand.

(Sept. 18, 2012)

Should Shell Oil ultimately decide to build an ethane “cracker” plant on the Horsehead Corp. property in Beaver County for which it holds an option, it will mean $4.8 billion a year in economic activity to the region for a single year of operation, according to a new study.

The findings of the study done by the Pennsylvania Economy League of Greater Pittsburgh -- outlined Sept. 18 at a gathering at the Central Valley High School auditorium -- project a wide estimate of between 2,000 and 8,000 permanent jobs, including the 400 permanent full-time workers at the plant.

The study assumes a peak of 10,000 workers directly employed in the construction phase plus 8,000 jobs that support the project and the people working on it.

Dennis Yablonsky, chief executive officer of the Allegheny Conference of Community Development, said the plant represents the largest single industrial investment ever in the 10-county Pittsburgh region.
The region’s economy has already shown signs of improvement, he said. “This project just adds significantly to that.”

After decades of decline, the 10-county region’s population has actually increased over the past two years, Yablonsky said. It has gotten both younger and better educated.

Yablonsky noted the difference between “dry” methane gas that can be used for power generation, home heating and vehicle fuel, as opposed to this region’s “wet” gas which is largely ethane, which can be made into “a building block in the petrochemical industry.”

Most cracker plants are located in the Gulf Coast or Canada. A plant in the center of the Marcellus shale gas region would mean reduced transportation costs, he said.

Shell is still in a “decision phase” regarding the Horsehead site in Potter and Center townships, and has until the end of the year to exercise its option on the property, Yablonsky said.

Larry Nelson of the Beaver County Building Trades Council said his group is currently doing a labor study for Shell. “We’re going to show them that we can man that project,” he said.

Mike Williams of NOVA Chemicals, said “Right now, Marcellus (shale gas drilling) is really doing a lot of good for this area.” Regarding Shell Oil, he said: “They say that they work with all sizes of businesses.”
Williams added that Shell, like NOVA, is a “responsible care” company that puts a priority on safety.

CLICK HERE to learn more about the league’s study.


Study projects economic impact of cracker plant in county
The potential economic impact of an ethane cracker plant is discussed by, from left, Mike Williams of NOVA Chemical, Larry Nelson of the Beaver County Building Trades Council and Dennis Yablonsky, chief executive officer of the Allegheny Conference on Communty Develpment.
bvtoday photo
It's official: Shell buying Horsehead site
(Nov. 7, 2014)

After a pair of extensions,Shell  has at last exercised its option to buy a former zinc plant in Potter Township, on which it intends to build a facility known commonly as a "cracker" plant.

Horsehead Holding Corp.announced the deal on Nov. 7, saying  that it hopes Shell will close on the sale next year.

Shell hasn't formally committed to building the plant, which would convert ethane from Marcellus Shale natural gas liquids into chemicals used to make plastics and other products. 

Shell has said it may take years to decide whether to build the facility.