‘Cracker’ plant decision could have major impact on region
A highly anticipated business decision expected in a few weeks could provide a big economic spark to Western Pennsylvania that creates thousands of jobs and possibly spawns related, spinoff companies.
The decision involves the location of a natural gas “cracker” plant. Oil company Royal Dutch Shell’s chemical division is eyeing locations in West Virginia, Western Pennsylvania and eastern Ohio for a plant to process ethane, called a cracker plant. The new chemical processing plant would cover hundreds of acres and involve a $2 billion investment. In addition to Shell, one other company reportedly is looking to locate a cracker plant in the region.
With such a massive investment, the three target states are aggressively competing for the plant, offering tax breaks and other inducements. West Virginia passed a law that would slash property taxes by hundreds of millions of dollars for any business that invests $2 billion toward building a cracker plant in the state.
Ohio and Pennsylvania have also made sales pitches to Shell officials. U.S. Sen. Robert Casey sent a letter to Shell in support of locating the facility in Pennsylvania.
The governors of West Virginia and Ohio have traveled to Shell headquarters, prompting some people to fear that Pennsylvania’s effort and Gov. Tom Corbett are not aggressive enough. But considering the successful effort to bring Westinghouse to Cranberry Township, preventing it from being lured to another state, there is reason to believe that state officials will do whatever is possible to land Shell’s plant.
Steven Kratz, of the state Department of Community and Economic Development, said Corbett is “personally involved and engaged in this project.”
There has been speculation about what areas are best suited for the plant. Abundance of the “wet” or rich natural gas found in this area of the Marcellus Shale region and good access to both water and transportation top the list. Underground storage is also a factor.
Officials in Western Pennsylvania support the idea of using abandoned industrial sites along the Ohio River for a new cracker plant. A former steel mill site in Aliquippa is being touted as an ideal location for Shell’s cracker plant, with its combination of the river and on-site rail lines.
The Pittsburgh region also offers top-notch universities that might appeal to Shell in terms of chemical engineers, skilled plant workers and possibly research options.
A cracker plant uses natural gas with ethane that is processed to produce the basic ingredient for plastics.
The $2 billion plant would create between 5,000 and 10,000 construction jobs. According to Kent Moors of Duquesne University’s Institute for Energy and the Environment, the plant would create several thousand permanent jobs, with hundreds in the plant itself and hundreds more companies connected to the plant. An article in a Pittsburgh newspaper reported that industry studies say each job at a cracker plant creates 5.5 jobs in other companies related to or supporting the plant. Other chemical plants, plastic manufacturers and makers of plastic pipe are most often mentioned.
Some regional and state officials move beyond regional cheerleading and slip into hyperbole, saying a cracker plant – or two – in the region would reindustrialize Southwestern Pennsylvania. More than a few people view the arrival of one or two cracker plants as a true game-changer for the region. It’s exciting to consider the possibilities.
The combination of construction jobs, a $2 billion investment, thousands of potential supply chain and spinoff jobs, plus the possibility of building up a plastics industry in the region are powerful incentives for state and regional officials to bring Shell’s cracker plant to Southwestern Pennsylvania. With plenty of brownfield sites in the region, a cracker plant would be a nearly ideal fit here and could trigger a major economic boost to a region with a proud manufacturing history.
– Butler Eagle