Opening of Shell’s mammoth ethane cracker facility in Western PA: CEG

Mon, November 21, 2022 – Northeast Edition
Pittsburgh Post-Gazette & State Impact Pennsylvania

Shell Chemical’s long-awaited petrochemical complex in Beaver County, Pennsylvania is now operational, the company announced on November 15, capping a decade of anticipation.

Known as the ethane cracker, the sprawling $6 billion facility extracts ethane, a component of natural gas, from shale fracking operations in the Appalachian Mountains and processes it into 1.6 million tons of plastic per year. In fact, it’s already converting liquid ethane into lentil-sized polyethylene pellets at its site on the banks of the Ohio River in Potter Township, according to the Pittsburgh Post-Gazette.

Shell has spent the last six years building the huge facility, which currently employs about 600 workers, the news outlet reported.

Since the company announced plans for an ethane cracker in the region, the project has enjoyed support from several governors and more than $1.6 billion in public incentives.

Hilary Mercer, senior vice president of Shell Polymers, said in a company Facebook message, “Shell Polymers will use our polyethylene to make products that we see and use every day – consumer packaging, tubing, tubing and many more lifestyle solutions .

“The safe construction and commissioning of this world-class facility is a special, once-in-a-lifetime opportunity and we could not have done this without a truly collaborative approach between teams around the world and the support of the community.”

At the height of the plant’s construction, about 8,000 workers were on site.

According to Gov. Tom Wolf’s office, construction of the plant was Pennsylvania’s largest industrial project since World War II and benefited from the largest federal subsidy ever — a $1.65 billion tax credit and various state and local tax breaks, StateImpact reported Pennsylvania, a medium cooperation in the country’s energy industry.

The Wolf administration recalled on Shell’s announcement that the governor called the petrochemical project a “game changer” in 2016 when the petrochemical company made the decision to invest in it.

“And he’s absolutely right,” Neil Weaver, acting secretary of the state’s Department of Community and Economic Development, told the Post-Gazette. “This project will really boost the economy of western Pennsylvania.”

Full production should occur in about a year

When a regulated facility in Pennsylvania is ready to start, the state Department of Environmental Protection (DEP) typically conducts an initial inspection of the permit to operate. However, due to the size of the Shell site and more specifically the number of emission sources there, the DEP started these inspection activities in phases a few months ago.

The Post-Gazette noted that Shell had always said that the start of commercial operations was not the type of event that could be seen with the naked eye. Its great metal towers have been belching out steam for months, while its flares have been turning the skies on and off for just as long. The sewage treatment plant and a 250-megawatt natural gas power plant on the site have been in operation since 2021.

“The systems and infrastructure are already producing product,” Shell spokesman Curtis Thomas told Steel City newspaper. “Along the way we check and verify system integrity, optimize and make steady progress towards full production.”

The full production target of 3.5 billion pounds of polyethylene pellets per year is expected to be reached in the second half of 2023, according to the company. The complex will supply its products to customers who will then process these pellets into specialty sheet, pipe, blow molded containers and injection molded parts.

Stefani Pashman, CEO of the Allegheny Conference on Community Development, told the Post-Gazette the ethane cracker project “shows the power to make big bets that are positioning the Pittsburgh area for the future.”

“From the world-class facility operating today, to the commitment to ensure the region secures a leadership position in decarbonization through carbon capture and clean hydrogen, Shell is a valuable partner in the economic future and quality of life of our region 10 counties,” she added.

Environmentalists are skeptical of Shell’s claims

Shell’s ethane cracker plant comes on stream at a time when greenhouse gas emissions are of increasing concern.

According to StateImpact Pennsylvania, environmental groups are concerned about the facility’s pollution potential. State-issued permits allowed it to be Pennsylvania’s second-largest emitter of volatile organic compounds, precursors to smog, as well as allowing the state to release a major source of greenhouse gas pollution, with the climate impact of 400,000 more cars on the road.

However, as part of an agreement with environmental groups, Shell agreed to install and use fence line monitors at the facility to check emissions.

The energy company, which built its facility on 384 acres of the 700 acres it has secured for the project, has said there is room on its campus and nearby land to accommodate the at the facility and other facilities in the area To capture carbon dioxide emitted by the region, pump it underground for long-term storage. The company has partnered with Equinor, a Norwegian energy company, to achieve carbon capture, storage and a hydrogen hub at the new facility.

The two companies submitted their intentions to the US Department of Energy in early November, and the state approved the concept as Pennsylvania’s entry into the contest for $8 billion in federal funding for such nodes.

Incentives helped build Ethane Cracker

The path to construction of the facility began in 2012 with the passage of the project’s tax credits under the government’s resource manufacturing tax credit program.

“I can honestly tell you that we would not have made this investment decision without these incentives,” said a Shell executive in 2016.

Gov. Tom Corbett, who campaigned for Shell’s tax credit, said at the time: “If you look at the investment, you have to look at what it would have cost us if we hadn’t done anything, we would have let these companies go.”

The earlier tax credits were believed to have sparked a regional boom in plastics manufacturing. So far, StateImpact Pennsylvania reported that this has not happened because the Shell plant is the only one of its kind in the region. A Thai company considering building an ethane cracker in Belmont County, Ohio has yet to get the green light on the project.