Shell ethane cracker polyethylene facility in Ohio River valley of southwestern PA

From the Staff, Youngstown Business Journal, June 15, 2020

PITTSBURGH, Pa. – A group of economists and engineers from seven universities in West Virginia, Ohio and Pennsylvania, including Ted Boettner and John Russo, have published a letter sent to the governors of these states warning that the projected impact of the petrochemical industry won’t be as great as initially thought.

The letter follows a recent report by Institute for Energy Economics and Financial Analysis stating the Royal Dutch Shell ethane cracker plant in Monaca, Pa., “faces a combination of risks that weaken its anticipated financial performance.” Among the risks cited by the analysis group are overall economic uncertainty; the number of similar plants built worldwide, leading to a potential oversupply of ethane crackers and plastics manufacturing; and the decreasing price of plastics.

A similar report was released by the institute in regards to the proposed PTT Global Chemical cracker plant in Belmont County. A final investment decision on that project has been delayed indefinitely.

“We also see additional economic and technological barriers, which are likely to outlast the current economic crisis and make the construction of more crackers in the Ohio Valley and southwestern Pennsylvania highly unlikely,” the group writes. “Consequently, projects that depend on a build-out of four to five crackers, including development of large natural gas liquids storage facilities such as the proposed [Appalachian Storage Hub] and a major expansion of the downstream plastics manufacturing sector, are also unlikely to be realized as are the jobs they are expected to provide.”

Signing the letter are Ted Boettner, executive director of the West Virginia Center of Budget and Policy; University of Akron economics professor Amanda Weinstein; James Van Nostrand, professor at the West Virginia College of Law and director of the Center for Energy and Sustainable Development; Bethany College economics professor Wilfrid Csaplar Jr.; Nicholas Muller, professor of economics, engineering and public policy at Carnegie Mellon University; Mark Partridge, professor at chairman of Rural-Urban Policy at Ohio State University and John Russo, founder and former director of the Center for Working Class Studies at Youngstown State University.

The group cited the cancellation of the Ascent ethane cracker plant in West Virginia, the indefinite postponement of the PTT cracker plant in Belmont County, Ohio, and the failure of China to follow through on an announced $84 billion investment in the region as signs that interest in such developments in the region are fading, while interest in other parts of the world are increasing.

In urging leaders to move away from focusing on petrochemical projects, the group also pointed to technological barriers, environmental concerns and health considerations.

“In addition to being major emitters of greenhouse gases, ethane cracker plants, processing facilities, and downstream manufacturers are also emitters of fine particulate matter as well as volatile organic compounds,” the letter said. “Residents in our region already suffer higher than average rates of cancer, cardiovascular disease, upper respiratory disease, obesity, diabetes, and other conditions that make our region’s population among the nation’s most vulnerable to adverse health consequences from these substances.”

The group urged the governors of Ohio, Pennsylvania and West Virginia to instead direct more attention at renewable energy sources, such as solar power.

“The clean energy economy offers large-scale, high-visibility opportunities, like the Lordstown Motors electric truck plant in Ohio as well as new opportunities for existing businesses in communities all over our region in fields like lighting, HVAC, construction, building maintenance, and energy efficiency retrofits,” the letter said. “The construction of high-efficiency buildings and the retrofitting of existing buildings and homes generates knock-on benefits, including reduced demand for electricity, lower utility bills for ratepayers, greater comfort for workers and residents, and fewer greenhouse gas emissions.”

Will a push for plastics turn Appalachia into next ‘Cancer Alley’?

From an Article by Emily Holden, The Guardian, October 11, 2019

Critics say ethane expansion will not only prolong fracking but could also trigger a public health disaster.

Construction cranes climb into the sky and sprawl across the massive petrochemical facility that will turn a byproduct of fracked gas into plastic on the banks of the Ohio River, just outside Pittsburgh. Even at a distance, from the car park of a cancer treatment centre on a nearby hilltop, Royal Dutch Shell’s 386-acre site is a behemoth. It will anchor yet more gas, plastics and chemicals infrastructure in the tristate region of Pennsylvania, Ohio and West Virginia.

The plant would solidify demand for fracked natural gas and the ethane that comes with it out of the ground. It would make 1.6m tons of plastic and 2.2m tons of globe-heating carbon dioxide annually – roughly the same amount the city of Pittsburgh is trying to eliminate. The facility would also release hundreds of tons of toxic compounds into the air.

As global demand for plastics grows, the buildout of this industry threatens US progress on the climate crisis and clean air.

Opponents say the vast plastics industry will prolong fracking, even after power companies shift further towards renewable power, such as solar and wind. “To me, it’s so obvious that they are trying to lock us into fossil fuels,” said Terrie Baumgardner, a member of the Beaver County Marcellus Awareness Community.

At a time when scientists warn humans must stop pulling fossil fuels out of the ground and spewing plastics into the environment, natural gas drilling is booming in Appalachia and the ethane-to-plastics industry there is just getting started.

In a tall office building on a hazy Pittsburgh day, Matt Mehalik, the executive director of a public health collaboration called the Breathe Project, slammed his hand on a table. “This region has been down this path before and we should know better,” he said. “I grew up in Pittsburgh at the time the steel industry unravelled. It has taken 30 years to recover.”

Dangerous air is already present and more coming

Opposed residents have myriad concerns. The Shell ethane facility, or “cracker” plant, would use extreme heat to turn ethane into ethylene, which becomes the polyethylene in plastic bottles, bags and food packaging. It will be fed by thousands of fracking wells that dot local communities, including next to day-care facilities and school bus stops.

Pipelines run under neighbourhoods that have previously been affected by explosions and fires. Trucks overwhelm the roads.

Residents opposing the ever-growing expansion say they worry about illnesses and dozens of cases of rare cancers they never saw in generations past.

Pittsburgh already has some of the most dangerous air in America. The city received a double-F rating from the American Lung Association for smog and particle pollution from fossil fuels. And Allegheny County, which includes Pittsburgh, has ranked in the top 2% for cancer risks from air pollution.

And a report by the Conservation Voters of Pennsylvania last year found that since 2007, companies profiting from fracking had spent nearly $70m lobbying the state government, in part to insist the method was safe.

“Fracking money has undermined the voice of the people in comparison to the voice of the desire for fracking in the region,” said Mark Dixon, a film-maker and activist.

The pro-business group the Allegheny Conference on Community Development has boasted the plastics boom could turn Appalachia into a petrochemical hub similar to the Gulf Coast. But there, Louisiana residents have long tried to draw attention to the stretch of communities between New Orleans and Baton Rouge known as “Cancer Alley”.

The conference argues its goal is to attract business and that government regulators are responsible for keeping residents healthy. A spokesman, Philip Cynar, said: “We have to think about the holistic approach … we can do a lot more for the overall benefit of the region if we have a good economy.”

The fear of health risks is misplaced, according to Pennsylvania Department of Environmental Protection. In consultation with US regulators, it approved Shell’s air pollution plan in 2015. Allegheny County’s health department considered the effects of the plant’s releases of benzene, toluene, hexane, formaldehyde and ammonia – which cause cancer and other serious health problems. The department found the levels would be “well below the health-based risk value” for an individual.

Shell has said it designed the facility to “obtain the lowest achievable emissions.”

Aside from air pollution, the Shell plant will be as bad for global heating as putting a further 424,000 cars on the road each year. “It’s a huge paradox,” said Grant Ervin, Pittsburgh’s chief resilience officer. Oil and gas jobs pay well, even for people straight out of high school, he said. But the climate crisis puts humans “at the precipice of a public health disaster.”

Job creation has been a priority

Republicans and Democrats have supported the Shell plant, saying it will bring work to an area that has been hit hard by a downturn in US-made steel and coal.

Shell says it will create 6,000 construction jobs in the short term and 600 over the longer term. It is unclear exactly how many will go to locals. State lawmakers offered the company a $1.65bn, 25-year tax cut, the biggest break in Pennsylvania history.

Republican legislators have proposed a package of bills to encourage the natural gas industry, including by speeding the process for permitting projects and providing huge financial incentives.

Pennsylvania’s governor, the Democrat Tom Wolf, inherited the project from a Republican predecessor and now supports it.

But the facility and others like it are antithetical to Wolf’s plans to shrink the climate footprint of Pennsylvania, the country’s fourth-largest emitter of carbon dioxide. He wants to cut carbon pollution in Pennsylvania 26% by 2025, and 80% by 2050. His Department of Environmental Protection said the state is requiring the plant to reduce its climate footprint as possible “to help ensure that economic development and environmental protection can go hand in hand.”

Pittsburgh’s mayor, the Democrat Bill Peduto, famously challenged Trump on climate change, saying Pittsburgh would abide by an international pledge to limit heat-trapping pollution, even if Trump would not. But Peduto has stayed silent about the plant.

Construction continues (temporary stop work underway)

Hailed by Barack Obama as a “bridge fuel”, natural gas has become a nightmare for climate advocates. It has spurred a transition from coal, which emits twice as much carbon dioxide. But the bridge does not seem to be ending, and the natural gas production process leaks methane, a potent greenhouse gas.

The industry has continued to build wells, plants and pipelines – about 27% of natural gas in the US comes from the Marcellus and Utica shales under Appalachia. By 2040, the area will produce 37% of the country’s natural gas, according to the data firm IHS Markit.

Appalachia has wet gas, meaning it produces both the methane mixture that is used for power and stovetops and natural gas liquids, including ethane and propane. Drillers want a local market at which to sell them all.

Of the Democratic frontrunners for president, senators Elizabeth Warren and Bernie Sanders have pledged to ban fracking. Joe Biden, the former vice-president, has not. But the Trump administration is supporting the build-out.

Ken Humphreys, a senior adviser for regional economic development at the US Department of Energy, said: “Broadly this is about creating the conditions for private capital to flow into the region.

Between 2018 and 2040, the US’s capacity for making ethylene and intermediate petrochemical products is expected to nearly double. The energy department argues that global demand for plastic is rising, and it will either be produced in the US or in countries with more lax environmental standards.

Humphreys said there were 7,500 businesses within 300 miles of Pittsburgh, employing 900,000 people to make products that incorporated petrochemicals – most of which came from the Gulf Coast. Producing plastic locally would be more efficient, the department said.

Rare cancers in southwestern Pennsylvania

In Washington County, Pennsylvania, south-west of Pittsburgh, fracking well pads sit alongside neighbourhoods. One, called a super-frack pad because of its dozens of wellheads, sits in a valley next to the former coal community of Marianna.

A school bus stop overlooks the site and the children who wait there each morning live in brick homes that were built for coalminers and then abandoned.

Four counties in south-western Pennsylvania have been afflicted by a rash of rare cancers, including 27 cases of Ewing sarcoma over 10 years in a population of about 750,000. The bone cancer usually occurs in children and young adults.

A retired paediatrician, Ned Ketyer, said: “Ewing sarcoma is a nightmare for the families that are given that diagnosis, and certainly for the patients and also for the physicians that diagnose it. It starts very quietly but by the time the diagnosis is made it has deepened and spread.”

There are dozens of other rare cancer cases in the area too. The Pennsylvania Department of Health studied rates of the disease in two school districts and said there was no evidence of a cluster.

But people are still worried. Last week, 50 environmental advocacy and public health groups as well as hundreds of individuals signed a letter to the Pennsylvania governor asking him to attend a public meeting to hear their health concerns. The state’s epidemiologist attended instead.

The region has a toxic legacy that predates natural gas – including hundreds of years of coal-mining and agriculture pesticide use. But Ketyer said the cancers did not begin until fracking arrived.

Pennsylvania’s Department of Environmental Protection found the Shell plant’s hazardous air pollutants–which cause cancer and other serious sicknesses–“will not threaten public health and safety,” spokesman Neil Shader said.

Residents also worry about gas industry accidents. One September morning in 2018, Karen Gdula awoke to an explosion and flames shooting into the air from a 24-inch pipeline buried a few houses away. Her neighbours narrowly escaped with several of their dogs, but they lost their home, another dog and four cats in the fire.

Another neighbour, who was celebrating her birthday, had trouble convincing an emergency services operator that the pipeline had exploded until the operator heard the fire roar. The flames were so hot they melted a nearby transmission tower.

A second pipeline is under construction that will cross over the one that exploded. Gdula has been working with the construction company to make it safer for the neighbourhood. “My goal is safety,” she said. “We don’t believe we can stop them but we can do what we can to be safe.”

Global climate change

Natural gas from shale – the type that is extracted with fracking – is expected to double in the US in the coming decades, mostly in the east, according to the US Energy Information Administration. And the energy department expects an enormous 20-fold surge in ethane production in the eastern US by 2025.

Scientists say to avoid catastrophe from rising temperatures, people must rapidly reduce their emissions from fossil fuels to net zero by 2050.

The world is already 1C hotter than before industrialisation, and it is on track to warm an additional 2C – worsening extreme weather and poverty and leading to rapidly rising seas.

The Center for International Environmental Law, a pro-environment group, estimates that by 2050 climate-harming emissions from the production and incineration of plastics could reach 56 gigatons per year, or 10-13% of the budget allowed for keeping temperatures from rising more than 1.5C.

There is no way of knowing how much a plastics hub in Appalachia will exacerbate global warming and offset the work of states and cities trying to cut heat-trapping emissions. The ethane boom will, however, stretch beyond western Pennsylvania into Ohio and West Virginia.

In nearby Barnesville, Jill Hunkler said she was driven from her home by fracking. As gas wells were constructed around her, Hunkler said she started to experience headaches, breathing problems, burning eyes and a metallic taste in her mouth.

Hunkler counts 78 producing wells within five miles of her house, according to data from FracTracker. “There’s just no respect for the local community’s health,” she claimed.

Bev Reed, a nursing graduate and intern at the Sierra Club, a grassroots environmental organisation, said the community had no say over whether the facility was built.

“We already know it’s not sustainable and that Appalachia has been pillaged and plundered and raped for pretty much as long as its existed,” Reed said. “We’ve seen enough and we deserve better.”

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See also: The Ohio River Defines the Borders of Five States—But Its Pollution Doesn’t Stop at State Lines, Susan Cosier, Natural Resources Defense Council (NRDC), August 21, 2019

In a move that could open the door to industrial waste and interstate squabbles, the Ohio River Valley Water Sanitation Commission is making its water quality standards voluntary.

[The Ohio River consistently is ranked as the most polluted in the country, with an estimated 30 million pounds of toxic chemicals illegally dumped into its waters each year.] dgn

‘Cancer Alley’ on Mississippi River in Louisiana

From an Article by Elaine Schattner, National Public Radio, July 12, 2019

PHOTO: A stretch of the Mississippi River from New Orleans to Baton Rouge, La., that is crowded with chemical plants has been called “Cancer Alley” because of the health problems there.

We already know how to stop many cancers before they start, scientists say. But there’s a lot more work to be done.

“Around half of cancers could be prevented,” said Christopher Wild in the opening session of an international scientific meeting on cancer’s environmental causes held in June. Wild is the former director of the World Health Organization’s International Agency for Research on Cancer.

“Cancer biology and treatment is where most of the money goes,” he said, but prevention warrants greater attention. “I’m not saying that we shouldn’t work to improve treatment, but we haven’t balanced it properly.”

Perhaps no question about cancer is more contentious than its causes. People wonder, and scientists debate, if most malignancies stem from random DNA mutations and other chance events or from exposure to carcinogens, or from behaviors that might be avoided.

At the conference in Charlotte, N.C., scientists pressed for a reassessment of the role of environmental exposures by applying modern molecular techniques to toxicology. They called for more aggressive collection of examples of human pathology and environmental samples, including water and air, so that cellular responses to chemicals can be elucidated.

The hope is that by identifying specific traces of exposures in human cancer specimens, scientists can identify environmental causes of disease that might be prevented.

“Over 80,000 chemicals are used in the United States, but only a few have been tested for carcinogenic activity,” said Margaret Kripke, an immunologist and professor emeritus at MD Anderson Cancer Center, in an interview at the meeting.

“This has been a very neglected area of cancer research for the last several decades,” said Kripke, the driving force behind the conference, which was put on by the American Association for Cancer Research. “Environmental toxicology was very popular in the 1950s and 1960s,” she said, but genetics then began to overshadow studies of cancer’s environmental causes. “Toxicology fell by the wayside.”

While the incidence of tobacco-linked cancers has been falling, malignancies not associated with smoking are rising, Kripke said. Recent evidence suggests an escalating rate of lung cancer in nonsmokers. That trend implicates other environmental factors.

Around the globe, cancer’s overall incidence is climbing. This year, 18 million people will be diagnosed with some form of cancer and over 9 million will die from it.

Infections — many preventable, such as by human papillomavirus —account for 15% of new cases.

Another rising cause is obesity, along with urbanization. People generally get less physical activity and eat differently in cities, and pollution is heavier there, too. “As people move into cities, that will drive up cancer rates,” Wild said.

One of the biggest obstacles to preventing cancer is that many people just don’t think it’s feasible. Progress “requires long-term vision and commitment,” Wild said. “Funding is limited, and there’s little private sector investment.”

A change in the way benefits of cancer prevention are framed could help. “When I was at the IARC, one thing that struck me was the power of economic arguments over health arguments for preventing cancer,” Wild said.

Cancer treatment costs can be prohibitive. But productivity lost from premature deaths in Brazil, Russia, India, China and South Africa alone runs $46.3 Abillion annually, he said. “Developing countries are not prepared to deal with the rising cancer burden.”

The precise proportion of cancers arising from environmental and occupational exposure to carcinogens is uncertain. In 2009, a report by the President’s Cancer Panel called prior approximations of around 6% “woefully out of date” and low. A 2015 paper by over a hundred concerned scientists cited “credible” estimates of 7% to 19%.

Scientist at the Charlotte meeting emphasized the complexity of cancer’s causes and the need for toxicologists to update methods to reflect that complexity, such as by studying interactions of environmental and genetic risks, and by examining cells after a mix of exposures. “Most toxic exposures do not occur singly,” said Rick Woychik, deputy director of the National Institute of Environmental Health Sciences.

Until recently, many toxicology tests were performed in rodents, because it would be unethical to deliberately evaluate possible carcinogens in people. But these animal experiments are labor-intensive and slow, he said.

New alternatives are now being tried. “We learned from pharma that with robotics and high-throughput technology you can interrogate a lot of biology quickly and at lower costs,” he said.

Epidemiological research of human exposures has been stymied by the difficulty of proving cause-and-effect — that a particular substance actually causes cancer — and by shortcomings of survey data from questionnaires.

At the conference, scientists offered glimpses of new technology that is helping fill informational gaps.

Bogdan Fedeles of MIT explained how DNA serves as a lifelong “recording device.” He and others use duplex sequencing to examine human samples for genetic “fingerprints of exposure.”

Allan Balmain, a geneticist at University of California, San Francisco, spoke about mutational signatures in malignancies. In liver cancer, for instance, these signatures can offer causal clues—such as smoking, alcohol or aflatoxin, a product of mold that grows on some foods.

Many chemicals that cause or stimulate cancer growth are produced inside our bodies. “It’s not all about the environment,” Balmain said.

Others highlighted a conceptual shift in how scientists define carcinogens. Key characteristics may include a substance’s capacity to stimulate growth of malignant cells, or to induce inflammation—without necessarily causing DNA damage, long seen as the necessary.

“The answer to ‘What is a carcinogen?’ is changing” said Ruthann Rudel, a toxicologist at the Silent Spring Institute who has published extensively on breast carcinogens. She detailed new techniques to screen breast cancer cells for changes in response to specific chemical exposures.

The public health stakes for the field are high.

Professor Polly Hoppin, of the University of Massachusetts, Lowell, discussed cancer-causing industrial contamination of drinking water at Camp Lejune, N.C., air pollution in St. John the Baptist Parish, La., and potential exposures to carcinogens from fracking and planned plastics production in Pennsylvania.

Hoppin reflected on the U.S. experience with tobacco cessation. Scientists knew that smoking causes cancer by the 1950s, she said. Implementing that knowledge required policy and incentives — like high cigarette taxes and public smoking bans — and took decades.

“The science wasn’t enough,” Hoppin said. “How many lives could have been saved if we’d acted sooner?”

>>> Elaine Schattner is a physician in New York writing a book on cancer attitudes that will be published by Columbia University Press.

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See Also: Louisiana’s Cancer Alley Residents Take the Fight for Environmental Justice on the Road | DeSmogBlog, July 8, 2019

Plastic waste in ocean plankton an extreme problem

From an Article by Julia Conley, Common Dreams, April 17, 2019

The equipment was towed across millions of miles of ocean for six decades by marine scientists, meant to collect plankton — but its journeys have also given researchers a treasure trove of data on plastic pollution.

The continuous plankton reporter (CPR) was first deployed in 1931 to analyze the presence of plankton near the surface of the world’s oceans. In recent decades, however, its travels have increasingly been disrupted by entanglements with plastic, according to a study published in Nature Communications on Tuesday.

“The message is that marine plastic has increased significantly and we are seeing it all over the world, even in places where you would not want to, like the Northwest Passage and other parts of the Arctic,” Clare Ostle, a researcher at the Marine Biological Association in Plymouth, England, told The Guardian.

The CPR originated in northern England and has been continuously towed by boats across more than 6.5 million miles of ocean for more than 60 years.

It was first disrupted by plastic entanglement in 1957, when a fishing line got in its way. Eight years later the CPR ran into a plastic bag. The disruptions became increasingly common in the following years.

By the 1990s, two percent of the CPR’s missions were disrupted by plastic pollution — mainly discarded nets and other fishing equipment, as well as other plastic products.

The rate of disruption is now between three and four percent, according to scientists at the Marine Biological Association and the University of Plymouth, who compiled the research.

The CPR is pulled by boats at a depth of about 22 feet (7 meters) below the ocean surface, where many marine creatures live — confirming earlier studies which have found that marine life has been increasingly threatened by plastic pollution.

“The realization that plastics are ubiquitous, and that the consequent health impacts are yet to be fully understood, has increased the awareness surrounding plastics,” the report reads. “There is a need for re-education, continued research, and awareness campaigns, in order to drive action from the individual as well as large-scale decisions on waste-management and product design.”

“The dataset presented here,” the authors said, “is an important historical record for the continued monitoring of plastics in the ocean, and confirms the importance of actions to reduce and improve plastic waste.”

Plastics may be the new coal in Appalachia. But at what cost to health and climate?

From an Article by James Bruggers, InsideClimate News, March 6, 2019

MONACA, Pa. — Along the banks of the Ohio River here, thousands of workers are assembling the region’s first ethane cracker plant. It’s a conspicuous symbol of a petrochemical and plastics future looming across the Appalachian region.

More than 70 construction cranes tower over hundreds of acres where zinc was smelted for nearly a century. In a year or two, Shell Polymers, part of the global energy company Royal Dutch Shell, plans to turn what’s called “wet gas” into plastic pellets that can be used to make a myriad of products, from bottles to car parts.

Two Asian companies could also announce any day that they plan to invest as much as $6 billion in a similar plant in Ohio. There’s a third plastics plant proposed for West Virginia.

With little notice nationally, a new petrochemical and plastics manufacturing hub may be taking shape along 300 miles of the upper reaches of the Ohio River, from outside Pittsburgh southwest to Ohio, West Virginia and Kentucky. It would be fueled by a natural gas boom brought on by more than a decade of hydraulic fracturing, or fracking, a drilling process that has already dramatically altered the nation’s energy landscape—and helped cripple coal.

But there’s a climate price to be paid. Planet-warming greenhouse gas emissions from the Shell plant alone would more or less wipe out all the reductions in carbon dioxide that Pittsburgh, just 25 miles away, is planning to achieve by 2030. Drilling for natural gas leaks methane, a potent climate pollutant; and oil consumption for petrochemicals and plastics may account for half the global growth in petroleum demand between now and 2050.

A look at ethane cracker plants along the Ohio River

Despite the climate and environmental risks, state and business leaders and the Trump administration are promoting plastics and petrochemical development as the next big thing, more than three decades after the region’s steel industry collapsed and as Appalachian coal mining slumps.

“We have been digging our way out of a very deep hole for decades,” said Jack Manning, president and executive director of the Beaver County Chamber of Commerce.

“When Shell came along with a $6 to $7 billion investment … we were in the right spot at the right time,” he said.

Everyone wants jobs and economic growth, said Cat Lodge, who works with communities in the Ohio River Valley affected by the shale gas industry for the Environmental Integrity Project, a national environmental group. But not everyone wants them to be based on another form of polluting, fossil fuels, she said.

“While the rest of the world is dealing with global warming, Pennsylvania and Ohio and West Virginia are embracing developing plastics, and that just appalls me,” Lodge says. “It’s just not something I see as the future and unfortunately that seems to be the push to make that the future. And that’s upsetting.”

Lodge and her husband moved from Pittsburgh to the countryside 18 years ago in search of fresh air and open land. They have a small farm in a corner of rural western Pennsylvania, where winding roads trace the contours of Appalachian hills and a stark transition fueled by a shale gas boom is underway.

“We still love it, but little by little, and quickly over the last several years, we have become totally surrounded by the oil and gas industry,” she said.

Rising demand, but also pushback on plastics

The natural gas that’s pulled from deep underground in the Utica and Marcellus shale formations has done more than outcompete coal for electricity generation.
Drilling companies have also extracted a lot of natural gas liquids, particularly ethane, also called wet gas. It’s used to produce ethylene, which then gets turned into plastics, providing an additional revenue stream for the oil and gas industry. It’s the industry’s latest play, and it comes at a time when industry analysts and the federal government say the demand for plastics is skyrocketing.

“These materials are hooked into just about every part of the economy, from housing to electronics to packaging,” said Dave Witte, a senior vice president at IHS Markit, a global data and information service. “Today, the world needs six of these plants to be built every year to keep up with demand growth.”

IHS Markit calls the Appalachian or upper Ohio River region “the Shale Crescent.” Last year, it reported that the region’s gas supplies could support as many as five large cracker plants, like the one Shell is building. The plants “crack” ethane molecules to make ethylene and polyethylene resin pellets and would be in close proximity to a number of manufacturers that use those products to make everything from paints to plastic bags.

IHS does see some headwinds, including an international backlash against plastics. It published a report last summer that found that worldwide pressure to reduce plastic use and increase recycling was one of the biggest potential disruptors for the plastics industry and was “putting future plastics resin demand and billions of dollars of industry investments at risk.”

The oil and gas industry might find themselves with stranded assets, needing to abandon Ohio River valley communities, said Lisa Graves-Marcucci, a Pennsylvania-based organizer for the Environmental Integrity Project.

“Do they really care,” she asked, “if they can make money for the first 10 years or 20 years of their operation, but then plastic goes away in the world? What happens to the communities that are left behind?”

She said she is also worried about such a major investment in oil and gas as the world grapples with the effects of climate change.

Visions of an Appalachian plastics hub

The idea for a plastics hub in Appalachia got a lift in December with a report to Congress from the U.S. Department of Energy. It described a proposal for the development of regional underground storage of ethane along or underneath the upper Ohio River.

Storage is needed to help provide a steady and reliable stream of ethane to ethane cracking plants, and it would be important for the development of a regional petrochemical complex in the upper Ohio River valley, the report concluded.

A West Virginia business, Appalachia Development Group LLC, has proposed developing storage for ethane, possibly in mined salt or limestone caverns deep underground. It’s in the second phase of an application process for $1.9 billion in loan guarantees from the Department of Energy for the project, according to the department.

“We have sites of interest in Pennsylvania, Ohio and West Virginia,” said Jamie Altman, a representative of Appalachia Development Group. “We are aggressively pursuing private capital.”

Its report projects ethane production in the Appalachian basin would continue rapid growth through 2025 to a total of 640,000 barrels per day, more than 20 times greater than five years ago. By 2050, the agency said ethane production in the region is projected to reach 950,000 barrels per day.

China Energy signed an agreement with West Virginia in 2017 to potentially invest $84 billion in shale gas development and chemical manufacturing projects in the state. Late in January, West Virginia’s development director, Mike Graney, told state senators that China Energy was looking at three undisclosed “energy and petrochemical” projects. An announcement could be made later this year, he said, though President Donald Trump’s trade war with China was causing delays.

Other experts see a natural gas industry that’s subject to booms and busts and question whether the region is headed down another unsustainable path, like coal.

“We are less optimistic than the industry that this will really boom out,” said Cathy Kunkel, an energy analyst with Institute for Energy Economics and Financial Analysis, an environmental think tank that just published a report detailing how the natural gas industry in West Virginia hasn’t lived up to earlier expectations for jobs and tax revenue.

There is a huge amount of international competition for plastic production, she said. “All of the major oil exporting countries in the Middle East are talking about making massive investments in petrochemicals over the next five years or so,” she said. “That contains the risk that you will be exporting into a market that would be oversaturated with products.”

IHS Markit, a global data and information service, published a report last summer that said worldwide pressure to reduce plastic use and increase recycling was one of the biggest potential disruptors for the plastics industry and was “putting future plastics resin demand and billions of dollars of industry investments at risk.” Credit: Rosemary Calvert via Getty Images

The Energy Department report also cited “security and supply diversity” as a benefit of developing a new plastics and petrochemicals hub in Appalachia. The bulk of U.S. plastics and petrochemical plants are currently along the Gulf Coast, where they face supply disruptions caused by hurricanes, it said.

Vivian Stockman, the interim director of the Ohio Valley Environmental Coalition based in West Virginia, called that a “hugely ironic” justification for an Appalachian plastics hub, since science is showing that global warming can intensify hurricanes.

Economic benefits, with health concerns

The Shell plant was lured to Beaver County by Pennsylvania officials with some $1.65 billion in tax incentives. It’s scheduled to open “early next decade,” company spokesman Ray Fisher said. This year, as many as 6,000 construction workers will be working on it, and Shell says it plans 600 permanent jobs to run the plant.

It’s in Potter Township, a community with fewer than 700 residents. Rebecca Matsco, who chairs the township commission that gave Shell the local zoning permits, said she sees the plastics plant as an industrial upgrade from a dirty zinc smelter that had stood on the property for about a century, and that Shell cleaned up.

“It had become a real environmental burden, and we do feel like Shell has been a real partner in lifting that burden,” Matsco said.

Others, however, see the cracker plant as its own environmental burden — a new source of emissions that cause lung-damaging smog and heat the planet.

People in Pittsburgh were sad to see so much of the steel industry go, but they don’t miss the dirty skies, said Graves-Marcucci, an Allegheny County resident. The economic resurgence that followed was centered on health care, academic institutions and cleaner industries, she said.

Pittsburgh has been brushing off its sooty steel city past and is now pledging to slash its carbon emissions. But the Shell cracker plant alone, just 25 miles away, would emit 2.25 million tons of carbon dioxide a year, effectively wiping out nearly all the gains in carbon reduction that Pittsburgh plans to achieve by 2030, said Grant Ervin, Pittsburgh’s chief resilience officer.

The Shell plant will also emit as much smog-forming pollution as 36,000 cars driving 12,000 miles year; that would equate to about a 25 percent increase in the number of cars in Beaver County, said James Fabisiak, an associate professor and director of the Center for Healthy Environments and Communities at the University of Pittsburgh.

The environmental and health threats will only increase with a plastics hub buildout, and no regulators are looking at those potential cumulative impacts, Graves-Marcucci said.

Two more communities could get cracker plants

About 70 miles southeast of the Shell plant, another community waits for news about what could be the region’s second major ethane cracker plant, in Belmont County, Ohio.

PTT Global Chemical, based in Thailand, and its Korean partner, Daelim Industrial Co., Ltd., could announce any day whether they intend to proceed with an ethane cracker plant after getting state permits in late December. That plant would be along a section of the Ohio River in Belmont County where hulking old manufacturing plants and shuttered businesses paint the very picture of the nation’s Rust Belt.

“Do you know what the biggest export is from Belmont County? Our youth,” said Larry Merry, an economic development officer with the Belmont County Port Authority, overlooking the Ohio River bottomlands where the cracker plant would be constructed on the cleared-away site of a former coal-fired power plant.

Merry, who has been working to secure the plastics plant, called the oil and gas industry “a great employer for us that’s provided a lot of investment that’s helped.”

But it’s not fully made up for losses in steel and coal, and this cracker plant “is about jobs and opportunities so people can make the most of their lives,” he said.

He brushed aside any concerns about climate change or too much plastics. “How are we going to live and have products? Until you come up with a solution, don’t expect the world to shut down,” he said.

A spokesman for PTT American said he could not say when an investment decision will be made.

A third potential cracker plant is planned for Wood County, West Virginia, but it has been delayed because of unspecified “challenges” with its parent company, the Department of Energy report said.

“It just blows my mind that there could be three or four cracker plants, or even one,” said Steve White, a western Pennsylvania builder. “That’s some serious investment. It just shows you where everything is headed and how much development is coming.”

White is also a pilot, and he said he has observed from the cabin of a Cessna 3,000 feet aloft the spread of oil wells, pipelines and processing plants across shale drilling zones in Pennsylvania, Ohio and West Virginia, slicing up farms and encroaching on homes, schools and businesses.

“We are just in the way,” he said.

>>> InsideClimate News is a nonprofit, nonpartisan news outlet that covers climate, energy and the environment.

Dilles Bottom in Ohio River Valley

Dilles Bottom Site in Ohio River Valley Cleared for Cracker

Decision on R.E. Burger Property Expected by March

From an Article by Casey Junkins, Wheeling Intelligencer, December 4, 2016

PHOTO: Approximately eight months ago, FirstEnergy’s R.E. Burger Plant stood prominently along the Ohio River. Today, the site has been cleared for development of the PTT Global Chemical America ethane cracker.

Dilles Bottom, OH – Site preparation for PTT Global Chemical’s planned multi-billion-dollar ethane cracker project in Belmont County is nearly complete, as all signs of the former R.E. Burger power plant along the Ohio River are now nothing more than a memory.

After more than a year of evaluating the viability of the project — which would create thousands of construction jobs in the construction phase and hundreds of permanent jobs once it’s up and running — officials expect the Thailand-based chemical giant to make a final investment decision by the end of March.

“So far, all the signs we see are positive,” Belmont County Commissioner Mark Thomas said. “We anticipate them making their final decision by the end of March.”

In September 2015, Ohio Gov. John Kasich joined PTT President and CEO Supattanapong Punmeechaow at the Statehouse in Columbus to confirm plans to spend at least $100 million for engineering and design plans for the plant, which some estimate would cost about $5.7 billion to complete. In July, FirstEnergy Corp. officials blew up the 854-foot-tall smoke stack at the former Burger plant to make room for the giant ethane cracker, which will also include a significant number of acres to the south and west.

“It’s a very good sign that FirstEnergy worked so quickly to remediate the site,” Belmont County Commissioner Ginny Favede said. “They have worked with Jobs Ohio on this.”

Jobs Ohio is the private economic development corporation Kasich and Republican legislators created in 2011. Matt Englehart, spokesman for Jobs Ohio, said Friday that officials are close to being able to make some announcements, but couldn’t provide more details. PTT spokesman Dan Williamson also said he had no new information.

“Things are moving very smoothly. The company’s due diligence continues,” Thomas said. “The remediation of the FirstEnergy site is, in effect, complete.”

Thomas said the company continues working its way through the Ohio Environmental Protection Agency permitting process for both water discharge and air emission certificates.

If PTT makes an affirmative final investment decision, the construction project will require thousands of construction workers.

“The majority of the contracting work will be done by those from the local area,” Favede said.

“All the local labor that can be provided will be working,” Thomas added. “The project is so big that, at times, there will not be sufficient labor here.”

Although several new hotels and apartment complexes have opened across the Upper Ohio Valley during the last few years, Thomas and Favede said most of these will fill up rather quickly.

“You are going to have a lot of out of town people here. Those who have private apartments and hotels, they are going to be full for four years,” Thomas said.

Royal Dutch Shell is already building its giant ethane cracker north of Pittsburgh, but the majority of industry leaders believe there is so much ethane in the Marcellus and Utica shale region that it can both support multiple new cracker plants and provide feedstock to other established plants around the globe. Ethane now flows across Pennsylvania to the Marcus Hook refinery via the Sunoco Logistics Mariner East 1 project. The material then goes to Europe for processing in trans-Atlantic sea vessels.

Sunoco is now working on the Mariner East 2 pipeline, which the company plans to have carry additional ethane, propane, butane and other natural gas liquids through Pennsylvania by next year. The company estimates the total cost of its Mariner East project at $3 billion. Pipeline giant Kinder Morgan is also working on the $500 million Utopia Pipeline, which would send the ethane from MarkWest’s Cadiz plant to a connection with existing infrastructure in Michigan. The ethane would then go onward to Corunna, Ontario, Canada for processing by Nova Chemicals Corp.

These pipeline projects are in addition to the active ATEX Express pipeline that sends Marcellus and Utica ethane to the Gulf Coast, as well as Sunoco’s Mariner West project that already ships the material to the Nova Chemicals facility in Canada.

“This entire region is going to be a major player in the energy sector for a long time to come,” Thomas added.“And Belmont County is right in the heart of it all.”

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US ethane cracker updates in petrochemical Q3 earnings calls

From an Article by Kristen Hays, Platts News, November 3, 2016

The first in a wave of US Gulf Coast ethane cracker projects is slated to start up in the first quarter of 2017 when Occidental Petroleum Corp. and MexiChem’s new joint-venture 550,000 mt/year project near Corpus Christi, Texas, wraps up commissioning by mid-January. Mexichem Chief Executive Antonio Carrillo said the plant will ramp up throughout 2017, reaching 100% capacity in late 2017.

Here is a roundup of other major cracker project updates provided during third-quarter earnings calls:

Chevron Phillips Chemical’s ethane cracker, a 50/50 JV of Phillips 66 and Chevron Corp., likely will cost another $250 million to $500 million because a months-long delay has pushed its target startup to the second half of 2017. Phillips 66 Chief Executive Greg Garland told analysts last week that the delay will probably raise the cost of the project in Baytown, Texas, by 5%-10% “just due to delays we are seeing in construction,” though two associated polyethylene plants 86 miles away in Sweeny, Texas, are expected to be mechanically complete in the second quarter and start up by mid-2017 as planned. About $5 billion of the combined $6 billion project is related to the cracker. Phillips 66 President Tim Taylor said the main push behind the delay is construction amid a tight craft labor squeeze.

ExxonMobil Corp and Saudi Basic Industries Corp (SABIC) are continuing their evaluation of Texas and Louisiana coastal sites for a new 1.8 million mt/year ethylene plant, in addition to a new 1.5 million mt/year cracker at ExxonMobil’s Baytown, Texas, refining and chemical complex slated to start up 2017. ExxonMobil expects global chemical demand to grow 1% above gross domestic product through 2040, which will need about 5 million tons per year of new capacity. “To put that into hardware, that would be three to four world-scale crackers per year,” said Jeff Woodbury, vice president of investor relations and secretary. “That sets up the value proposition.”

Enterprise Products Partners has “gained some traction” on adding ethylene export capability with potential customers seeking access to more markets, namely Asia, Chief Executive Jim Teague told analysts last week. He also hinted that Enterprise is likely to build adjacent to the company’s new ethane terminal on the Houston Ship Channel that started up in September. “You can imagine, if we do it at Morgan’s Point, we are sticking it right next to our ethane export” facility, he said. “So it kind of ties together.”

Teague also said the wave of new US ethane crackers slated to begin starting up along next year will need supply from the Rocky Mountain and Northeast regions as well as the Gulf Coast, and those volumes will be competitive despite added transportation costs. “It’s still about the gas-to-crude spread. You can have ethane prices go up so that it supports transport out of the Northeast or the Rockies, and then ethylene plants can still be advantaged here relative to the rest of the world.”

Dow Chemical’s new 1.5 million mt/year cracker in Freeport, Texas, is 85% mechanically complete and remains on track to begin start up in mid-2017, Chief Operating Officer Jim Fitterling told analysts last week. A cracker and three polyethylene units have started up at the company’s joint-venture Sadara project in Jubail, Saudi Arabia, with 2017 being the “big start-up year” for another 22 units and reliability tests in 2018, Chief Executive Andrew Liveris said.

He also said the company sees weakness in the global industrial economy, but strength in consumer, safety, hygiene and environmental products. Fitterling said the recent minor energy sector rebound with oil prices surpassing $50/b only to fall back to the high $40s/b range has been too small to make a significant impact on industrial chemicals.

Williams Companies expects to decide by the end of the first quarter 2017 whether to sell its 88.5% share of its 1.95 billion pounds per year olefins complex in Geismar, Louisiana, or forge a long-term, fee-based deal to operate it while a partner buys all the output and assumes all the commodity risk. In September Williams announced plans to exit the merchant petrochemical business with a sale or tolling agreement, though Chief Executive Alan Armstrong said that month a sale was likely most favorable. During a quarterly earnings call this week, he said Williams is open to either option as long as a sale is swift or a tolling deal is struck with a reliable partner with strong credit.

Lyondell Basell Industries’ Corpus Christi, Texas ethylene complex is being commissioned after a turnaround and a 363,000 mt/year ethylene expansion that will boost capacity to 1.15 mt/year. Chief Executive Bob Patel told analysts this week he expects the plant to operate at its expanded capacity during November.