On a road overlooking the Ohio River, Michael McDonald gazes out over swarms of backhoes, bulldozers and piledrivers. He points to a large patch of bare ground. “That’s where the actual cracker units will be,” he says.
This site is the future home of Shell’s new “ethane cracker”—a multi-billion dollar petrochemical complex the company is building near Monaca, Pennsylvania, about 30 miles west of Pittsburgh. The facility will make plastic from the region’s vast natural gas resources.
The plant will stand along a stretch of the Ohio River in Beaver County that once housed miles of steel mills. In those days, there were plenty of jobs for people like McDonald, who’s now a business manager with the Beaver County Laborers’ Union Local 833.
“When I got into the business in ‘74, we had 1,400 members,” McDonald says. “In my local, we’re down to about 400 now. And half of them are retirees.”
So McDonald was breathing a sigh of relief when Shell announced it would be building the new plant. His union will supply many of the workers to build it.
“I was waiting to retire, and I was hoping it would happen before I retired,” he says.
McDonald thinks this single plant could breathe life back into his union—and bring industry back to the river in Beaver County. This is no ordinary plant—it will take upwards of 6,000 people to build. And Shell will receive what could be a $1.7-billion tax break from the state over the next 25 years.
LISTEN: “What an Ethane Cracker Means for the Region”
The cracker will take ethane, a type of natural gas found in abundance in the region’s shale formations, and convert it into polyethylene—the type of plastic found in everything from food packaging to auto parts to kids toys.
How will it do this? Chemistry. The plant will heat up the ethane to such high temperatures that it rearranges—or ‘cracks’—its molecular bonds.
“It gets the molecules very, very hot, breaks the single bonds and then creates double bonds,” says Kendall Puig of Platts Analytics.
Puig was surprised that Shell decided to build the plant now—given that low oil and gas prices have reduced profits for oil companies.
She said one thing Shell has going for it with the Pennsylvania cracker is a dirt cheap supply of ethane. Appalachian ethane production has surged from 66,000 barrels a year in 2005 to 31 million barrels in 2015, according to the U.S. Energy Information Administration. The fracking boom has created such a glut of ethane in Pennsylvania that about half of it is currently sent into the natural gas grid to be used as fuel—a process called “ethane rejection.”
“It’s almost two crackers worth of ethane that is currently being rejected and could be recovered,” Puig says.
Pennsylvania’s natural gas drilling industry, currently slumping from low gas prices, expects the plant will help boost its business.
“Certainly, it creates a demand for the product when there is not a demand for the product today,” says Dave Spigelmyer, president of the Marcellus Shale Coalition, an industry group.
Spigelmyer thinks the cracker will also help the industry in the court of public opinion.
“I feel like this is the ‘aha’ that folks will realize in western Pennsylvania,” he says. “There’s been a lot of talk over the last seven or eight years over natural gas development—some for, some against. Very few folks are against building trades jobs, very few folks are against the development of new manufacturing. I would tell you that both the manufacturing investment that’ll occur here, the supply chain jobs that’ll be created here are enormous for our region.”
In some small ways, Spigelmyer’s prediction is already being borne out in Monaca, an old mill town about a mile down the river from the cracker. Some businesses in town are still boarded up after the decline in the steel industry led to hard times here. But Charlene Hollibaugh’s dog grooming shop, Clip and Cuddle, is still open.
She thinks the millions Shell has spent preparing the site for construction has already helped her business. She’s seen new customers with out-of-town area codes—something she didn’t see much of before.
“I think, already, it’s started to help me because I’ve picked up a lot of new people that have moved to this area,” she says. “I haven’t asked them why they’ve moved here, but I’m thinking this is what it is.”
But not everyone here is happy about the cracker. Brandon Ambrose grew up in Beaver County. He now lives near Pittsburgh, where he works as an ICU nurse.
“I don’t agree with it. I think the environmental concerns are way too high for my liking to put something like that in this area,” Ambrose says.
Environmental groups are worried about the plant’s potential impacts on air quality.
Myron Arnowitt of Clean Water Action says the cracker will be one of the region’s biggest sources of volatile organic compounds (VOCs). These are compounds that can form ozone, or ground-level smog, which can exacerbate breathing problems for people with asthma and other lung problems.
“There’s been a lot of talk over the last seven or eight years over natural gas development—some for, some against. Very few folks are against building trades jobs, very few folks are against the development of new manufacturing. I would tell you that both the manufacturing investment that’ll occur here, the supply chain jobs that’ll be created here are enormous for our region.”
Since Pittsburgh fails to meet the EPA’s air quality standards for smog, Shell is required to offset its pollution by buying so-called Emissions Reduction Credits (ERCs). These are basically allowances the company buys from other facilities that are cutting their own pollution footprint, sometimes by closing down entirely.
It sounds good, but there’s a catch. So far, all of the credits Shell has bought are from facilities that are already closed—many of them shuttered coal-fired power plants. In some cases, the plants have been closed for four years.
Arnowitt says counting these emissions against Shell’s pollution allotment means that smog the region is no longer breathing today will be coming back—via Shell’s new plant.
“It is very difficult for a region like ours to continue to improve our air quality if we allow [new] companies to essentially keep emitting the same amount of pollution long after the [old] companies have closed,” Arnowitt says.
Being able to backdate these pollution credits is legal. And some argue it’s the only way for companies to bring new projects online. Clean Air Council’s Joe Minott says backdating ERCs can also encourage older plants to shut down, rather than hang on.
“These are incentives to close inefficient and polluting plants,” Minott says. “One of those incentives is they have something of value to sell.”
Minnott says this kind of trade-off is at the heart of environmental laws like the Clean Air Act, which sets regulations for plants like the cracker.
“The Clean Air Act is always a balance between looking for ways to improve air quality and environmental health but allowing for economic development to continue.”
Minnott’s group is appealing Shell’s state air permit on the grounds that the company should conduct fence-line monitoring of its emissions.
So far, the company has not agreed to the monitoring, and the Pennsylvania DEP isn’t requiring it.
He said he was “perplexed” that DEP wouldn’t make Shell install the monitoring, which the EPA has required of a similar cracker near Houston. He was also disappointed that his pleas for the requirement fell on deaf ears among Pennsylvania politicians.
“We literally couldn’t get any public official to talk to us about fence-line monitoring,” Minnott says. “It does cost something to install. But the flip side is Shell is going to have a public health impact on that community.”
