The Shell workers were paid to rally for Trump

From an Article by Reid Frazier, Allegheny Front, September 21, 2020

At a marina in Moundsville, West Virginia, Dan Williamson looked out across the Ohio River at a quiet stretch of land on the other side. “There’s a little activity going on,” said Williamson, a spokesman for PTT — an oil and gas company based in Thailand that wants to build an ethane cracker on the far side of the river, in Dilles Bottom, Ohio. “But really we’re kind of in between phases right now.”

The plant would turn the region’s plentiful natural gas into plastics. It’s taken years to develop, and a final decision on whether the company would build the plant was due this summer. But then came the pandemic. “It just kind of changed the game for all industries, including this one. And so they have had to put off their announcement of a decision,” Williamson said.

For years, industry boosters in Appalachia have promoted the idea of a building boom for petrochemical plants like the PTT ethane cracker. Oil and gas backers have said there’s enough gas in the region for four or five chemical plants like this. But so far, only one of those plants is a ‘go’ — Shell, with the help of $1.65 billion in state tax breaks, is building a giant plastics plant in western Pennsylvania.

But other projects have either been dropped or put on hold, and now the pandemic has left some some communities in the Ohio River Valley wondering if those plants will ever get built.

A project in West Virginia was canceled last summer when its Brazilian owners backed out. A planned $84 billion Chinese investment in West Virginia’s gas and chemical industry has yet to materialize. And PTT has watched as potential partners backed away from the project. Matsubeni, a Japaneese company, initially signed on as a partner but was out of the picture by 2016.

In July, Daelim, a Korean chemical company that had agreed to invest in the PTT plant, cited the pandemic when it backed out of the project, which could be the largest of its kind ever built in the U.S. according to PTT.

Williamson says PTT is still looking for investors, but he says the real barrier for the plant is simple: COVID-19. “I believe and the project leaders believe that if not for the pandemic, it would be under construction right now,” Williamson said.

Problems Before the Pandemic

Some aren’t so sure. “Don’t believe company announcements — believe the ribbon cutting,” said Kathy Hipple, an analyst with the Institute for Energy Economics and Financial Analysis, a left-leaning think tank that works toward sustainable energy.

She says Daelim’s decision to pull out of the PTT project is a red flag. “We view this as a market signal that the project has possibly become far too risky for them to continue,” Hipple said. “The other possibility is that the economics of building a petrochemical complex have changed tremendously.”

Hipple said the price of plastic has fallen by around 40 percent since PTT first announced its interest in the site five years ago, pushed down by new supply from new plants built on the Gulf Coast. She thinks a wave of environmental policies around the globe — like bans on single-use plastics — could threaten the industry’s bottom line.

Steve Lewandowski, an analyst at the research firm IHS Markit, thinks there will still be demand for plastic in the next few decades. But he also wonders if delays in the Ohio project might be a sign that the $10 billion plant is looking too expensive for investors.

“If it was such a compelling case to build there, that cracker would have been approved under construction and then it probably would be another one on top of that — and it’s not,” Lewandowski said. “So there’s something going on that is causing companies to say, ‘That’s probably not the right place to be.’”

Advantages for Appalachia

Lewandowski said Northern Appalachia has advantages — Ohio, West Virginia and Pennsylvania sit atop the Marcellus Shale, the biggest natural gas formation in the country. And it’s close to East Coast and Midwest manufacturers that would use the plastic. But he thinks companies might want to keep their production centered on the Gulf Coast, where dozens of similar plants have been running for decades.

“We’re assessing that the cost to build [in Ohio] is higher than on the Gulf Coast. And we would we would argue it’s probably going to be a bit more expensive to operate only because they’re not really in a cluster of industry.”

If a part breaks down at a plant in Louisiana, there’s a better chance that a supplier nearby will be able to replace or repair it than there would be in Ohio, he said.

But closer to the proposed Ohio plant site, there are fewer doubts. In August, a senior Trump administration official visited the site and said it would boost the Ohio River valley’s economy.

‘100 Percent Positive That This Will Be a Go’

That has people like Matt Coffland confident. “I’m 100 percent positive that this will be a go,” Coffland said. “No doubt about it.”

Coffland is a big proponent of the PTT project — and it’s easy to see why. He owns Matt’s Tiger Pub — a tavern in the town of Shadyside, Ohio, a few miles from where thousands of hungry construction workers could one day build the project. “I mean, it’s three miles away from my doorstep. And you’re talking an influx of close to ten thousand people at one point,” Coffland said.

Coffland sees the plant as a good thing not just for his restaurant but for his part of southeastern Ohio — which he says has been neglected by the state in favor of the ‘three Cs” — Cleveland, Cincinnati and Columbus. “I think we deserve it by now,” he said. “Finally, something is going to land right here in our lap. You know, it’s about time.”

Someone else who’s hoping the project moves ahead works in a school building a few blocks away. John Haswell is superintendent of the Shadyside Local School District.

On the wall of his office hangs a set of drawings showing what a K-12 school complex would look like. If PTT builds its chemical plant, the company agreed to pay for the new building. “Any time that I can build something or we can build something for $30 million and it does not cost our taxpayers a cent — that’s a pretty good deal,” Haswell said.

The district’s 700 students are in a school built 1932, and Haswell says a new building is badly needed. Uncertainty over whether the PTT project will go forward — or whether he’ll have to ask taxpayers for more money to build a new school — has made him anxious.

“I would really love to get really busy on a building project, but until we have that final investment decision, I can’t do anything but sit. Sit and wait and wait and wait,” Haswell said.

Opposition to Cracker

If the delay has made Haswell antsy, it’s been a reprieve for Amanda Petrucci. She and her husband live with their four children and seven goats on a hillside across the Ohio river in Moundsville, West Virginia.

On a recent afternoon, she pointed out a few landmarks — a hilltop across the river where a well owned by an ExxonMobil subsidiary blew out in 2018, releasing 60,000 tons of the potent greenhouse gas methane, a natural gas processing plant a half-mile from her front door, which flares gas at all hours, and a Superfund site just down the hill.

The site used to house a chemical plant. In the 1990s, the U.S. EPA declared it a superfund site, and began a cleanup. Around that time, her family endured a spate of health problems — her son developed a rare blood disorder, her husband was diagnosed with asthma, and she developed Tourette’s syndrome and migraines.

Petrucci blamed dust from the Superfund site for their health problems. (The EPA says dust levels at the site never endangered human health.) She worries about the oil and gas infrastructure that ring her property, and isn’t happy about PTT’s proposed ethane cracker a mile from her house.

“I think we’re going to get hit with more toxic air. How many more layers can we throw on everybody in the community?” Petrucci said. She says she’s been thinking about moving somewhere where the air and water are clean, and there’s no oil and gas. But she hasn’t found anywhere that fits that bill just yet.

So it was welcome news for her when she heard PTT was delaying a final decision on its ethane cracker. “I [felt] like I could kind of just hang out here for a little bit longer and enjoy life here,” she said. “I feel relieved and feel like I can enjoy my property a little more.”

NOTE: John Haswell is superintendent of the Shadyside Local School District in Shadyside, Ohio. His district would get a $30 million school building if PTT builds a proposed ethane cracker in Belmont County, Ohio.

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See also: Project Design Planning for Ethane Cracker Complex at Belmont County, Ohio, FrackCheckWV, June 21, 2020

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See also: THE SHELL ETHANE CRACKER, As the world grapples with plastic pollution, Pa.’s ethane cracker promises more plastic, Reid Frazier, StateImpact Penna., YouTube, September 21, 2020

https://www.youtube.com/watch?v=R01yOnk_ynw

Braskem petrochemical plant lighted up at night

News Briefs from PetroChem Update, June 4, 2020

1. Thailand’s PTT Global Chemical sets new FID deadline by March 2021

Thailand-based PTT Global Chemical’s Final Investment Decision (FID) on whether to build an ethylene-polyethylene complex in Belmont County, Ohio will be announced by the end of March 2021, PTTGC America said on June 1, 2020.

“While the pandemic has prevented us from moving as quickly as we would like within our previous timeline, our best estimate is for an FID by the end of this year or in the first quarter of next year,” said PTTGC America President and CEO Toasaporn Boonyapipat.

The new date is a postponement of the FID of up to nine months. A report by the Thai embassy in Washington D.C. had estimated in February an FID “by the middle of this year.”

As the mid-2020 date approached and following industry commentary related to an indefinite postponement, a company spokesperson replied in mid-May to an e-mail inquiry saying PTTGCA could not provide at that time any firm timeline for an FID decision.

2. Dow’s Fort Saskatchewan PE expansion timeline unchanged

(Story was updated on June 12 to include a reply from Dow saying project timeline unchanged.)

Dow Canada’s project to incrementally expand capacity at its ethylene facility in Fort Saskatchewan, Alberta through the addition of another furnace remains ongoing, a company official said by email on June 12.

“We have not announced any changes to the project timeline,” a company spokesperson said.

The comment follows a request for an update following reports that the company was likely to delay construction work for an expansion of an existing polyethylene plant in Western Canada due to Covid-19 contagion concerns.

Bob Masterson, CEO of the Chemistry Industry Association of Canada, estimated the project investment at about C$250 million. He had said early in the month in an interview that a potential delay was likely due to safety concerns as bringing contract workers could be a risk to adjacent operations.

The expansion will add 130,000 tonnes of annual polyethylene capacity to current production.

Dow announced the expansion on January 29, 2020 saying at the time that 700 workers were going to participate in the construction. It didn’t provide a cost but estimated completion by end of the first half of 2021. The Canadian Press estimated at the time the investment at C$200 million.

3. Braskem widens net losses in first quarter 2020

Brazil-based Braskem posted on June 3 a net financial result loss of 6.2 billion reais (about $1.2 billion) or more than double compared with a net financial result loss of 2.9 billion reais in the fourth quarter of 2019, as it cited currency depreciation.

The first quarter net financial result loss is several times deeper compared with the Latin America’s biggest petrochemical company net financial result loss of 923 million reais in the first quarter of 2019.

Braskem also said the net loss attributable to shareholders for the first quarter of 2020 was only 3.6 billion reais. This compares with a similar net loss attributable to shareholders of 2.9 billion reais in the previous quarter.

Braskem also said its first quarter 2020 EBITDA (earnings before interest, taxes, depreciation and amortization) was $294 million, 22% higher than in the fourth quarter of 2019.

The on-quarter EBITDA increase resulted from higher sales volume of resins in the Brazilian market, polypropylene (PP) in the United States and Europe, and polyethylene (PE) in Mexico.

However, total EBITDA decreased on-year by 34% in dollar terms. The decline from the first quarter of 2019 was due to lower spreads in the international market, Braskem said.

EBITDA just for the United States and Europe was $62 million, up 33% from the fourth quarter of 2019 because of “capacity utilization rates normalization in the U.S. and the re-stocking trend in the chain in Europe due to (Covid-19) uncertainties.”

As for Mexico alone, the EBITDA was $79 million or 2% higher than in the fourth quarter of 2019. This represented 21% of the company’s consolidated EBITDA.

“The increase in (Mexico’s) EBITDA is mainly explained by the growth in PE sales volume supported by the higher supply of ethane,” the company said.

Braskem Idesa imported 12,600 tons of ethane from the United States during the first quarter.

This helped to offset in part a reduction in the supply of ethane by Pemex. Braskem said that resin demand in the Brazilian market (PE, PP and PVC) grew 3% compared with the first quarter of 2019, reflecting the recovery in construction, consumer goods, packaging and agriculture.

In relation to the fourth quarter of 2019, demand growth of 7% was due to seasonality, it said.

Braskem also reported an unscheduled shutdown of its Rio Grande do Sul polyethylene integrated unit, which resulted in lower capacity utilization rate of its cracker.

Ethylene production increased at the cracker in Bahia compared with the fourth quarter of 2019, when it underwent maintenance.

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A threat from above: Plastic rains down on US National Parks and Wilderness areas

From an Article by Kate S. Petersen, Environmental Health News, June 9, 2020

New research estimates more than 1,000 tons of microplastic particles, potentially circulating in global atmospheric currents, are deposited at conservation sites each year.

Last August, scientists delivered the chilling news that microplastics suspended in the Earth’s atmosphere were being deposited in remote areas of the Arctic and Europe. Now researchers report similar microplastic accumulation in iconic American protected areas including the Grand Canyon and Joshua Tree.

Publishing their results today in Science, the researchers estimate total yearly plastics deposition over their study area to be the equivalent of 123 to 300 million discarded water bottles.

The study is the first to calculate rates of microplastic pollution from the atmosphere onto American protected areas and adds to a growing body of research suggesting that microplastics are traveling long distances in the atmosphere. Microplastic pollution can harm wildlife health, and the researchers expressed concern about potential impacts to ecosystem stability in fragile and unique protected areas of the U.S.

Janice Brahney, an assistant professor at Utah State University and lead scientist on the new report, made the discovery while analyzing atmospheric dust—particles that get swept up into the atmosphere and then settle out again.

Examining the dust under a microscope, she found something she did not expect. “Scrolling around these samples, I started to see all these colorful pieces,” Brahney told EHN. “Nearly every single sample had plastic in it.”

See the westernvaluesproject.org

From the FracTracker Alliance, March 30, 2020

The COVID-19 health crisis is setting off major changes in the oil and gas industry. The situation may thwart plans for additional petrochemical expansion and cause investors to turn away from fracking for good.

Persistent Negative Returns

Oil, gas, and petrochemical producers were facing financial uncertainties even before COVID-19 began to spread internationally. Now, the economics have never been worse.

In 2019, shale-focused oil and gas producers ended the year with net losses of $6.7 billion. This capped off the decade of the “shale revolution,” during which oil and gas companies spent $189 billion more on drilling and other capital expenses than they brought in through sales. This negative cash flow is a huge red flag for investors.

“North America’s shale industry has never succeeded in producing positive free cash flows for any full year since the practice of fracking became widespread.” IEEFA

Plummeting Prices of oil AND natural gas are BOTH problematic

Shale companies in the United States produce more natural gas than they can sell, to the extent that they frequently resort to burning gas straight into the atmosphere. This oversupply drives down prices, a phenomenon that industry refers to as a “price glut.”

The oil-price war between Russia and Saudi Arabia has been taking a toll on oil and gas prices as well. Saudi Arabia plans to increase oil production by 2 – 3 million barrels per day in April, bringing the global total to 102 million barrels produced per day. But with the global COVID-19 lockdown, transportation has decreased considerably, and the world may only need 90 million barrels per day.

If you’ve taken Econ 101, you know that when production increases as demand decreases, prices plummet. Some analysts estimate that the price of oil will soon fall to as low as $5 per barrel, (compared to the OPEC+ intended price of $60 per barrel).

Corporate welfare vs. public health and safety

Oil and gas industry lobbyists have asked Congress for financial support in response to COVID-19. Two stimulus bills in both the House and Senate are currently competing for aid.

Speaker McConnell’s bill seeks to provide corporate welfare with a $415 billion fund. This would largely benefit industries like oil and gas, airlines, and cruise ships. Friends of the Earth gauged the potential bailout to the fracking industry at $26.287 billion. In another approach, the GOP Senate is seeking to raise oil prices by directly purchasing for the Strategic Petroleum Reserve, the nation’s emergency oil supply.

Speaker Pelosi’s proposed stimulus bill includes $250 billion in emergency funding with stricter conditions on corporate use, but doesn’t contain strong enough language to prevent a massive bailout to oil and gas companies.

Hopefully with public pressure, Democrats will take a firmer stance and push for economic stimulus to be directed to healthcare, paid sick leave, stronger unemployment insurance, free COVID-19 testing, and food security.

The industry is now grasping at straws

Fracking companies were struggling to stay afloat before COVID-19 even with generous government subsidies. It’s becoming very clear that the fracking boom is finally busting. In an attempt to make use of the oversupply of gas and win back investors, the petrochemical industry is expanding rapidly. There are currently plans for $164 billion of new infrastructure in the United States that would turn fracked natural gas into plastic.

There are several fundamental flaws with this plan.

One is that the price of plastic is falling. A new report by the Institute for Energy Economics and Financial Analysis (IEEFA) states that the price of plastic today is 40% lower than industry projections in 2010-2013. This is around the time that plans started for a $5.7 billion petrochemical complex in Belmont County, Ohio. This would be the second major infrastructural addition to the planned petrochemical buildout in the Ohio River Valley, the first being the multi-billion dollar ethane cracker plant in Beaver County, Pennsylvania.

Secondly, there is more national and global competition than anticipated, both in supply and production. Natural gas and petrochemical companies have invested in infrastructure in an attempt to take advantage of cheap natural gas, creating an oversupply of plastic, again decreasing prices and revenue. Plus, governments around the world are banning single-use plastics, and McKinsey & Company estimates that up to 60% of plastic production could be based on reuse and recycling by 2050.

Sharp declines in feedstock prices do not lead to rising demand for petrochemical end products.

Third, oil and gas companies were overly optimistic in their projections of national economic growth. The IMF recently projected that GDP growth will slow down in China and the United States in the coming years. And this was before the historic drop in oil prices and the COVID-19 outbreak.

“The risks are becoming insurmountable. The price of plastics is sinking and the market is already oversupplied due to industry overbuilding and increased competition,” said Tom Sanzillo, IEEFA’s director of finance and author of the report.

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See also: Proposed PTTGC Petrochemical Complex in Ohio Faces Significant Risks, Institute for Energy Economics and Financial Analysis, March 2020

“Financial outlook dims as financial and policy pressures mount”

The PTTGC Petrochemical Complex planned for Belmont County, Ohio by Thailand-based PTT Global Chemical (“PTTGC”) and Daimler of South Korea promises jobs, taxes and spinoff benefits to the State of Ohio and the people of southeastern Ohio. The project is also a critical element of a larger plan to establish a second U.S. petrochemical hub in the Ohio River Valley, akin to the Gulf Coast. This report highlights risks to the PTTGC project. The risks, left unheeded, strongly suggest that the plant will face financial distress when it opens and into the foreseeable future, reducing potential economic benefits.

Ethane cracker chemical complex in planning for Ohio Valley

From a Pulse Item by Choi Jae-won and Choi Mira, Maeil Business News (Korea), January 30, 2018

Daelim Industrial Co., a South Korean construction and petrochemical company, will put up about $131 million to establish a petrochemical complex in Ohio, the United States, in partnership with Thailand’s largest petrochemical and refining firm PTT Global Chemical (PTTGC).

The company announced in a disclosure that it plans to sign an investment agreement with PTTGC’s U.S. subsidiary PTTGC America to construct and jointly operate an ethane cracking center (ECC) that discomposes ethane to produce ethylene and a polyethylene plant. It said it would invest up to 140 billion won ($130.7 million) in the joint project. Details of the plan including the size of investment and stake share will be worked out by the end of this year.

Ohio is home to shale gas reserves and rich in ethane. Its geographic proximity to the U.S. eastern region that takes up 70 percent of the country’s polyethylene market also could save logistics cost.

Once operation begins four to five years later, the complex will produce 1.5 million tons of ethylene and polyethylene a year.

Shares of Daelim Industrial are publicly traded in Seoul (South Korea).

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See also the reports on Plastics and Toxic Chemicals at “Living on Earth” (loe.org)