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.”