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StateImpact Pennsylvania’s Reid Frazier: Why I’m following Pa.’s Marcellus shale gas to Scotland

  • Reid Frazier
This 2008 file photo shows a view of the INEOS refinery at Grangemouth, Scotland, where ethane imported from Pennsylvania is processed and turned into plastic.

Scott Heppell / AP Photo

This 2008 file photo shows a view of the INEOS refinery at Grangemouth, Scotland, where ethane imported from Pennsylvania is processed and turned into plastic.

StateImpact Pennsylvania’s Reid Frazier is in Scotland as he follows the Marcellus shale gas overseas. Listen for his reports on the radio beginning later this month. In the meantime, follow what he’s up to through these occasional dispatches. Scroll to the bottom to see earlier entries.

Oct. 2, 2019: Read the first of Reid’s reports: Shale gas off-ramp: Pa.’s fracking boom produces a glut of ethane that’s helping fuel plastics production overseas

In Scotland, a town evolved with its refinery. Shale gas arrived to help the plant, but the town could benefit more, one resident says

Sept. 24, 2019: Anne and Stuart Kennedy live about a mile from the Grangemouth refinery, next door to the guest house Anne runs in the home where she grew up. I met her as she was watering a flower pot attached to the handlebars of an old bicycle, across the street from Grangemouth’s sleepy town center. Anne is part of a group that helps keep the flowers watered and bright in a town ringed by industrial plants. It’s a small effort, she says, to keep up appearances.

Living a mile from Scotland’s largest refinery doesn’t really bother her, she said.

“I was born in ‘59, so I’ve just lived with it. Living with it tends to give you a certain amount of acceptance,” she said.

For the past 16 years, she has run a bed and breakfast — the Grangeburn Guest House — in a stone Victorian her family lived in growing up. Her father worked at Grangemouth’s port, Scotland’s biggest container terminal.

Stuart worked as an engineer at a shipyard and in later years, owned a local pub. His major claim to fame is as a local soccer legend. He played on Scotland’s 1978 World Cup team and professionally for a team in the Scottish city of Aberdeen.

Stuart, who’s retired, recently worked for three weeks at the INEOS plant as a mechanical fitter — putting valves and pipes together along steam lines. “Nothin’ creative,” he said. He said he did the job more “out of curiosity” than anything else.

The couple watched the town evolve around the Grangemouth refinery and chemical plant, first under BP, and later under its current owner, INEOS.

They watched as more and more of the plant’s workforce came from outside, either from surrounding towns, or other parts of the UK. The refinery was at one point publicly owned before it was privatized in the 1980s. The plant’s success was tied to the prosperity of the town — BP retirees took home a pension equal to their outgoing salary — ”unheard of today,” she said.

Anne often rents rooms at her guest house to out-of-town engineers and employees at the plant, so she sees her business tied to its prosperity.

When INEOS CEO Jim Ratcliffe threatened to shut the plant down six years ago during a labor dispute, Anne says “people started to panic” because of the potential impact to the town’s economy. The government stepped in and helped engineer a plan to keep the plant running.

Part of the plan was to import American shale gas to make up for declining ethane production in the North Sea. With grants and a loan guarantee from the Scottish and UK governments, INEOS built an ethane import terminal to receive shale gas from Pennsylvania. Anne says she’s glad the refinery and chemical plant didn’t shut down.

“I have a business here that is partly dependent on the oil industry being here and I do like to live in a place where local people work,” she said.

But she said the town center of Grangemouth, which is pocked with vacant buildings, and a town hall in need of repair, should benefit more from its proximity to the plant. “It should be more vibrant,” she said.

She doesn’t blame INEOS so much as local government — she wishes more of the local coffers went to beautifying the town.

“People here work, so that’s not a bad thing. So the benefit is there’s employment in the area. But the rest of the town’s neglected and I don’t feel our town of Grangemouth benefits as much as it should, with an oil refinery on our doorstep.”

In the UK, fracking is not a thing — so shale gas from the U.S. has become their workaround

Sept. 17, 2019: In a University building near the center of Glasgow, I visited Zoe Shipton one afternoon last week. Shipton is a geologist and head of civil and environmental engineering at the University of Strathclyde. She’s been around the world to study rocks of varying shapes and sizes. Her office is decorated with succulents and cacti, and of course, a lot of rocks.

When I showed up one late afternoon, she pulled out her favorite, a granite-based hunk from California’s Sierra Nevada. It was a pseudotachylite — a rock with a white base pocked with dark clumps. She said it was, essentially, a “fossilized earthquake” —the dark parts are the remnants of rocks that were melted during a seismic episode 15 kilometers below the earth’s surface.

Shipton has paid close attention to the issue of oil and gas in the British isles. In 2011, she was on a panel of the British Geological Survey to study the question of fracking in the UK. She said one reason why shale gas from Pennsylvania is being shipped to Scotland has to do with what is going on with fracking in Great Britain.

For decades, the United Kingdom has relied on oil and gas from the North Sea. Those fields, first developed in the 1960s and 70s, are declining. Grangemouth, the largest refinery in Scotland, is fed by a pipeline from those fields.

Shipton says INEOS has been looking for a closer domestic supply, and it’s pushed for fracking in Great Britain. But some of the first exploratory wells in the North of England caused earthquakes, and the fracking effort slowed.

The Scottish parliament has put in place a moratorium on fracking, and public sentiment in the UK is generally lukewarm to the process.

If fracking were to ever advance in the UK, Shipton said it’s an open question as to how much gas there is in British shale. That’s partially because there are many faults in Britain’s geology, making geological prediction harder.

Some of those faults are related to the pulling apart of the European and American continents. Millions of years ago, they were stuck together, but have been moving apart ever since.

“So we’ve got a bit of Maine stuck on to Scotland,” she said. “Basically anything north of Glasgow kind of is American. But we nicked it off you millions of years ago.”

(That separation is ongoing, she said — the Atlantic Ocean is widening at the same rate “as your toenails grow”.)

Another factor in assessing how much gas Britain’s shale holds, she said, is that it’s just very hard to predict where a “sweet spot” for oil and gas is.

“There is potentially quite a lot of gas underneath the UK,” she said, but until companies drill and hydraulically fracture wells in Britain, they won’t know for sure.

For now, Shipton said, INEOS has found a workaround to produce its plastics, fertilizers, and medicines: American shale.

At Grangemouth refinery in Scotland, a plastics evangelist says U.S. shale gas is vital

Sept. 16, 2019: The massive refinery and petrochemical complex in Grangemouth, Scotland, run by INEOS, was one of the first overseas plants to receive Pennsylvania ethane. The refinery and petrochemical plant, a seemingly unending complex of cooling towers, pipes and valves, is nudged up against the town of Grangemouth, on the Firth of Forth, a long estuary that stretches into the North Sea. It was first built up in the 1850s to process oil from shale found nearby, and has grown in the century and a half since.

I was given a tour of the area around the refinery by Kevin Ross, president of the Scottish Plastics and Rubber Association. Ross once worked at Grangemouth, back when it was run by British Petroleum (BP); some people in the town still refer to the plant as the ‘BP’ refinery. Now he runs his own company and advocates for his industry.

Kevin Ross, president of the Scottish Plastic and Rubber Association, in front of the INEOS Grangemouth refinery and chemical plant.

Reid R. Frazier / StateImpact Pennsylvania

Kevin Ross, president of the Scottish Plastic and Rubber Association, in front of the INEOS Grangemouth refinery and chemical plant.

“I can’t underestimate the importance of the American shale gas and the feedstock costs for INEOS,” Ross said. “It is driving investment decisions into Grangemouth which wouldn’t have been made if it wasn’t for the availability of the shale gas.”

Ross is a mild-mannered evangelist for the plastics industry, and he’s enthusiastic about recycling. He runs a company that’s come up with a way to recycle plastic out of mixed streams, one of the biggest hurdles of plastics recycling, and its first plant is in operation in England.

After touring the plant, Ross took me to the offices of his company, Impact Solutions, in an industrial park a few blocks from the refinery. The company tests products for plastics manufacturers, and on the ground floor is its lab: a kind of torture chamber for inanimate objects. The company’s technicians drop, heat, freeze, pressurize, and artificially weather plastic and metal products in a variety of machines. Some of those products need to be certified for certain weights and pressures, or to keep their color, as in the case of reflective signs. His company tests the products to make sure they work the way they’re intended to.

Ross said the shale gas that INEOS is importing to Grangemouth from Marcus Hook near Philadelphia will be processed into plastic products. They include food packaging, but also include more industrial plastics, like those used in cars, and those automobiles will be sent abroad, possibly to the U.S.

“Business is global,” he said.

The U.K. and the EU are moving away from single-use plastic, because of concerns about the ubiquity of plastic debris in the oceans, and micro-plastics in the environment. There is a plastic bag fee of around 7 cents at most stores in the UK, so many customers bring their own bags. But Ross says plastic isn’t going away anytime soon. He says it’s still the best material for some things.

‘Take a cucumber,” he said. “If you wrap it in plastic, it will last for 15 days. If you don’t, it will go bad in just a few days.”

Modern life, he said, would be unrecognizable were it not for the things made out of oil and gas at places like Grangemouth.

Why I’m following Pa.’s Marcellus shale gas to Scotland

Sept. 11, 2019The deep shale gas deposits beneath Pennsylvania, Ohio and West Virginia are rich in ethane, a key byproduct of natural gas. It can be used to heat homes and power electric plants, but ethane’s chief use in today’s world is to make plastic. Not just plastic, but chemicals, coatings, fabrics — a cornucopia of the modern world’s most basic materials come from manipulating ethane.  

Reid Frazier

Reid Frazier

The fracking boom in the U.S. has brought vast quantities of this ethane to the surface. In the U.S., ethane production has doubled since 2010; by 2025, the ethane supply in Appalachia is expected to be 20 times what it was in 2013. 

The chemical industry is building several massive chemical plants to refine the U.S.’s burgeoning stock of ethane, like the one Shell is building in Beaver County, Pennsylvania. But even with these new plants, the supply of ethane coming from Western Pennsylvania, and the adjoining areas of Ohio and West Virginia, is expected to far outstrip demand for the foreseeable future. As one analysts put it to me recently, this gas “has to find a home.” 

So where is it all going? Increasingly, overseas. In 2016, the British chemicals company INEOS began shipping ethane across the Atlantic to chemical plants it operates in Norway and Scotland. Plastics plants in India, Brazil, and China have started to take American ethane shipments. This trade in ethane is part of a worldwide plastics boom that is expected in the coming decades. 

That’s why I’m traveling to Scotland this month: to look at where America’s shale gas is going, and what happens to it once it gets there. I arrived in Glasgow on Tuesday to begin my trip. I’ll report on why these companies are shipping this gas around the world, and the impact it’s having on the overseas plants, and the communities and economies around them.

I want to see what happens to the gas coming out of the ground in Pennsylvania, after it gets past the wellhead, transmission station, and pipeline. I’ll bring back stories for the radio, and will post updates on this page about what I find here.  

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