What's An Ethane Cracker?

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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.