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What's An Ethane Cracker?

Background

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Since Shell Chemical announced in July 2011 that it planned to build an ethane cracker in the northeast, Pennsylvania, Ohio and West Virginia officials all did their best to woo the company to build the multi-billion dollar facility in their state.

On March 15, 2012, Shell announced Pennsylvania had won the “cracker sweepstakes,” naming a site near Monaca, Beaver County as the possible future location for  the chemical plant.

That’s not to say the deal is final. Shell only agreed to consider the Beaver County site, and has not signed any final commitment yet. Pennsylvania wooed Shell by granting the company a fifteen-year tax amnesty window. In June, Governor Corbett successfully pushed for an additional tax break that will grant Shell a $2.10 credit for every gallon of ethane it purchases from Pennsylvania-based natural gas drillers. Over a 25-year window, the credit has been valued at $1.65 billion, making it the largest tax break in state history.

What’s an ethane cracker? As a January NPR report explained:

“Cracker” is industry lingo for a plant that takes oil and gas and breaks them up into smaller molecules. An ethane cracker creates ethylene, a compound used in the manufacture of plastic. There’s much more ethane in Appalachia these days thanks to controversial drilling techniques known colloquially as “fracking.”

Governor Corbett is convinced the petrochemical plant will kick-start a corridor of plastics processing plants in Beaver County, and predicts up to 20,000 new jobs could be generated by the plant. But that figure comes from a chemical industry-funded study, and the majority of those anticipated jobs are “indirect or induced.” The cracker itself would only employ between 400 and 600 people.

The direct jobs are pretty easy to describe: They’re the peo­ple who would be employed at the cracker and other plas­tics man­u­fac­tur­ing facil­i­ties, accord­ing to Smith. The indi­rect jobs are the “peo­ple who sup­ply the valves and motors” and other mate­ri­als needed dur­ing man­u­fac­tur­ing, he explained.

[The American Chemistry Council's] model pre­dicts a cracker would cre­ate 2,396 “direct” jobs, even though just 400 to 600 peo­ple would be employed at the Shell plant itself. The study antic­i­pates 8,194 indi­rect new jobs. The remain­ing 6,951 jobs would come from the “rip­ple effect” of increased eco­nomic activ­ity dri­ven by the peo­ple who move into the Beaver County area.

Latest Posts

Shell seeks to build docks for barges near proposed petrochemical plant

The Beaver County Times reports Shell Chemicals has filed a permit with the U.S. Army Corps of Engineers to build two docks and 24 smaller structures to moor barges near the site of its proposed ethane cracker in western Pennsylvania. From the article: When asked whether the application signaled a new level of commitment from Shell, [spokesman [...]

Shell’s proposed ethane cracker could be a big emitter

The Pittsburgh Tribune-Review reports Shell’s proposed ethane cracker in western Pennsylvania could be a significant new source of air pollution. The company has not yet committed to building the multi-billion dollar petrochemical plant, but has applied to the Department of Environmental Protection for an air quality permit for the site in Monaca, Beaver County. More from [...]

Shell holds public meetings on proposed cracker plant

Shell is still weighing whether to build a multibillion dollar petrochemical plant in Beaver County. A spokesman for the company says it may spend another one or two years deciding. Although Shell first announced its interest in an industrial site outside Monaca over two years ago, Dan Carlson, who is general manager for new business [...]

Shell to hold public meetings on ethane cracker plant

Shell plans to host two public meetings tomorrow about its proposed ethane cracker plant in Beaver County. From the Associated Press: Two public meetings are scheduled for Wednesday at the Shadow Lakes club in Hopewell, about 30 miles northwest of Pittsburgh. That’s near the proposed plant site. One will be from 11 a.m. to 2 [...]

Businesses already betting on proposed ethane cracker in Beaver County

Royal Dutch Shell is still mulling over its proposal for a multi-billion dollar ethane cracker in Beaver County. However, businesses are already betting on the plant that would break down natural gas liquids into building blocks for manufacturing. The Pittsburgh Tribune-Review reports new hotels and housing could be on the way to Beaver County as engineering [...]

Shell seeks to move Pa. highway for proposed ethane cracker

The Associated Press is reporting that Shell Chemical LP is seeking to relocate a state highway in western Pennsylvania as part of its proposal to build a multibillion-dollar ethane cracker. From the AP: PennDOT spokesman Dan Cessna says Shell would pay for the changes, which include moving a section of Route 18 in Beaver County [...]

Shell issues profit warning: bad news for Pa. ethane cracker?

Royal Dutch Shell warned its investors Friday that the oil giant made “significantly” less money than expected in the last quarter of 2013. It’s the first time Shell has issued a profit warning in a decade and comes at a time when the company is being choosey about where to invest capital. Last month, Shell abandoned [...]

Shell takes final extension on Pa. site for proposed ethane cracker

Shell Chemical has signed a deal with the owners of a Beaver County industrial site that would give the company more time to decide whether to buy the land and build a multi-billion dollar petrochemical plant called an ethane cracker. It is the third time Shell has extended a land option with Horsehead Corporation, the [...]

Shell abandons plans for natural gas-to-liquids plant in Louisiana

Royal Dutch Shell will not be going ahead with plans for a $12.5 billion gas-to-liquids plant in Louisiana, the company announced today. The plant would have used natural gas feedstocks to make more valuable diesel and gasoline, and is one of three major projects the company was exploring in North America. Shell has also proposed building [...]

Shell actively exploring Western Pa. cracker project

Royal Dutch Shell’s decision about whether to build a multibillion dollar ethane cracker in Beaver County could still be several years off, but the Associated Press has found that the company is actively taking steps to explore the site. More from the Associated Press: Shell has an option to buy the industrial site in Monaca [...]

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