Cracker plant has potential to transform regional economy
It’s hard to imagine the birth of a job-creating industry rivaling the role played by the steel industry in Western Pennsylvania decades ago, but that’s part of the message from supporters of a huge chemical processing plant, called a cracker, planned by the Shell Oil Company on a former industrial site in Beaver County.
Supporters say the plant could lead to the creation of plastics and manufacturing companies that create enough jobs to rival the steel industry in the middle of the 1900s. While it’s clear that such lofty job estimates are part hopeful thinking, so is the construction of the plant itself.
Shell Oil Co. officials visited the region this week and hosted two community meetings to answer questions about the proposed $2 billion cracker plant and offer updates.
At this point, Shell has signed an option on the land of a former zinc smelter. The company is trying to ensure that the plant will have an adequate supply of ethane, a component in the so-called wet natural gas found in Western Pennsylvania and nearby areas of Ohio and West Virginia. The location of a cracker plant in Western Pennsylvania is tied to the area’s rich supply of natural gas, just as the development of the steel industry here was partially tied to rich coal reserves.
The company also is reportedly studying transportation, infrastructure and regulatory issues before committing to building the plant. It’s been reported that another step forward could happen by the end of the year, when the land option expires.
Shell officials say that once a decision is made to begin construction, it will take four to five years to complete. The construction process is expected to employ as many as 10,000 workers.
Just as the steel industry created spinoff or support jobs, the cracker plant is predicted to have a similar multiplier effect. Once constructed, the massive gas-processing plant will be operated by only about 400 full-time employees. But when a group of economic development officials from Pittsburgh visited a Shell cracker plant in Louisiana they saw the spinoff jobs picture. While there, the officials say they saw a wide range of indirect jobs supported by the large plant.
According to Dewitt Peart, president of the Pittsburgh Regional Alliance, who spoke at a recent energy conference organized by the Pittsburgh Business Times, for every job at a big cracker plant, there are 20 other jobs created in support, maintenance, and by other companies located in the area because of the big petrochemical plant.
A cracker plant takes wet-gas and breaks the bonds of the ethane molecules using high pressure and temperatures to create ethylene, a raw material for many types of plastics.
Gov. Tom Corbett, a strong advocate for the Shell plant pushed tax breaks and other financial incentives through the Legislature to keep Shell focused on the Pennsylvania site.
Another strong supporter is John Hanger, former secretary of the state Department of Environmental Protection, who said at the energy conference that the cracker plant could “transform the quality of life and economy of the region.”
Since the announcement in March that Shell selected the site in Beaver County rather than competing sites in Ohio and West Virginia, there has been excitement about what it could mean to the area’s economy.
While this week’s updates from Shell are encouraging, company and state officials still warn that the cracker plant is not a done deal. Future updates and ongoing cooperation between the company, state and regional officials is needed to keep the project on track.
The plant’s full economic impact could be a decade away, but the potential to create hundreds of direct jobs — and thousands of indirect jobs — while giving birth to a new plastics manufacturing industry in the region makes Shell’s cracker plant the most exciting jobs story in the region in decades.