Not everyone agrees with the air quality plan!

From the Press Release, Shell Global Web-Site Post, November 22, 2017

BP, Eni, ExxonMobil, Repsol, Shell, Statoil, Total and Wintershall today committed to further reduce methane emissions from the natural gas assets they operate around the world. The energy companies also agreed to encourage others across the natural gas value chain – from production to the final consumer – to do the same.

The commitment was made as part of wider efforts by the global energy industry to ensure that natural gas continues to play a critical role in helping meet future energy demand while addressing climate change. Since natural gas consists mainly of methane, a potent greenhouse gas, its role in the transition to a low-carbon future will be influenced by the extent to which methane emissions are reduced.

The eight energy companies today signed a Guiding Principles document, which focuses on: continually reducing methane emissions; advancing strong performance across gas value chains; improving accuracy of methane emissions data; advocating sound policies and regulations on methane emissions; and increasing transparency.

“Numerous studies have shown the importance of quickly reducing methane emissions if we’re to meet growing energy demand and multiple environmental goals,” said Mark Radka, Head of UN Environment’s Energy and Climate Branch. “The Guiding Principles provide an excellent framework for doing so across the entire natural gas value chain, particularly if they’re linked to reporting on the emissions reductions achieved.”

The Guiding Principles were developed in collaboration with the Environmental Defense Fund, the International Energy Agency (IEA), the International Gas Union, the Oil and Gas Climate Initiative Climate Investments, the Rocky Mountain Institute, the Sustainable Gas Institute, The Energy and Resources Institute, and United Nations Environment.

“Our analysis at IEA shows that credible action to minimise methane emissions is essential to the achievement of global climate goals, and to the outlook for natural gas,” said Tim Gould, Head of Supply Division, World Energy Outlook, IEA.

“The commitment by companies to the Guiding Principles is a very important step; we look forward to seeing the results of their implementation and wider application. The opportunity is considerable – implementing all of the cost-effective methane abatement measures worldwide would have the same effect on long-term climate change as closing all existing coal-fired power plants in China.”

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Shell’s Pennsylvania Ethane cracker project enters main construction phase

From an Article by Sara Welch, Shale Gas Reporter, November 16, 2017

Shell Chemical Appalachia LLC has officially entered its main construction phase in the Ohio River valley in Beaver County, PA.

The new complex will use low-cost ethane from Marcellus and Utica shale gas producers to manufacture 1.6 million tonnes per year of polyethylene, which is used in products such as food packaging, furniture and automotive components. The facility will have three polyethylene units and an ethane cracker.

The complex will also have a 900-foot long cooling tower, rail and truck loading facilities, a water treatment facility, an office building, a laboratory and a 250-megawatt natural gas-fired power plant.

During operations, Shell expects the project to support up to 6,000 construction jobs and about 600 permanent employee positions. This Beaver County project is a $6 billion investment by the company.

Hillary Mercer assumed the role of vice president for the local Shell project, replacing its former vice president since 2014, Ate Visser. Mercer’s previous experience includes 30 years working for Royal Dutch Shell in a variety of roles. As vice president for the ethane “cracker” project, she will oversee all aspects of the project, from the construction of the plant and safety issues to production and customer relations.

Horsehead plant site on Ohio River

Beaver County firms place wager on Shell building petrochemical plant

From an Article by Timothy Puko and David Conti, Pittsburgh Tribune-Review,  March 18, 2014

After eight years of up and down business, Ed Vescovi is hoping the best is yet to come for the dormant biodiesel plant he oversees on the banks of the Ohio River in Beaver County. There are plans to revive the site with as many as 85 new workers, including a new river dock and wastewater treatment plant for Marcellus shale gas drillers. The ultimate bet is even bigger, that a multibillion-dollar petrochemical plant Royal Dutch Shell may build just down the road could help turn the largely wooded and hilly site into a booming industrial park.

The chance to get an early position on spin-off business from what would be a largely new industry in Western Pennsylvania was a big motivator for the site’s new owner, Weavertown Transport Leasing Inc. It paid more than $2 million to buy the 125 acres in October.

All around Beaver County leaders are seeing a similar push: Industrial parks are beefing up, engineering companies are moving in, and new offices, hotels and housing are on the way. While many Pittsburgh businesses are still hanging back until Shell decides, it’s clear that some are already moving fast to try and make it big.

Shell leaders have never committed to building during two years of deliberating since they picked Pennsylvania as the potential host. It has an option to buy the Horsehead Holding Corp. zinc smelter site, and, after three extensions, its final deadline to buy is coming next month, County Commissioner Joe Spanik said.

Shell leaders will be updating a working group of local and state officials in Hopewell, Spanik and Commissioner Dennis Nichols said. The parent company has been facing sagging profits and last week its global leaders said they will cut capital spending by a fifth and pull back from some shale development in the United States.

Shell has, however, continued to invest millions into Beaver County. It spent $1.87 million in December to buy the 5.5 acres home of Cubbyhole Self Storage on Frankfort Road to help reroute Route 18 along the Horsehead site. Shell talked to other property owners in the area, the seller said. Shell is also paying for ongoing demolition work to help clear part of the Horsehead site, both companies have said.

At Ambridge Regional Distribution & Manufacturing Center, 11 miles up the Ohio River from the Shell site, they’re planning for a 25 to 30 mile zone for spin-off businesses, said Gene Pash, president of site owner Value Ambridge Properties Inc. Its new plan maps out the addition of as many as six new buildings to provide top-class office and workspace for expanding industry, Pash said.  “We’re moving forward at warp speed,” he said..

The region’s drilling boom has helped give business a foundation to build on. The Weavertown corporation is moving up emergency spill response equipment and some of its stone business into a satellite operation to serve the drillers increasingly working north of Pittsburgh. That type of business is growing enough to justify a somewhat speculative investment, fostering belief that it will turn a profit even if Shell never builds, Weavertown’s CEO Fuchs said.

The company is planning $15 million to $20 million more to develop the whole site, according to county commissioners who helped Weavertown apply for state grants. “With any growth strategy, you have to be in early because then you’ll get short-listed more quickly.” Fuchs said. “We’re opportunistic.”

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Shell’s newly completed analysis of its second half of 2013 performance in Pennsylvania’s Marcellus shale gas operation, acquired in 2010 for a reported $4.7 billion, showed that the “vast majority” of its 630 wells are underperforming compared to its peers. In one county, its wells were producing at half the rate of competitors. An independent energy analyst, who estimated that Shell’s wells are likely to be uneconomic even with a recent rise in US gas prices, has meanwhile predicted that the international oil and petrochemicals group will not proceed with its proposed ethane cracker in Pennsylvania, according to www.Plasteurope.com

Shell Seeks Ethane Supplies from “Wet” Frack Gas for Cracker Plant

From the Article by Jim Ross, State Journal, August 27, 2013

As Shell Chemical Co. moves closer to a decision on whether it will build a multi-billion-dollar ethane cracker plant in Pennsylvania, it is seeking more suppliers of raw materials from the Marcellus and Utica shale regions.

In an announcement issued August 27th, Shell said it is accepting bids from ethane suppliers through October 4^th. The site of the plant is near the town of Monaca in Beaver County, Pa., near West Virginia’s Northern Panhandle. “Securing additional ethane supply is one of the key components in determining next steps as part of the ongoing site evaluation process,” the company said in the statement issued this week.

If the complex is built, Shell Chemical expects that its upstream affiliate, Shell Western Exploration and Production Inc., would provide a portion of the ethane supply for the proposed petrochemical complex, the statement said. Shell said it has secured commitments from four companies already: CNX Gas Co. LLC, a subsidiary of Consol Energy; Hilcorp Energy Co.; Noble Energy; and ∫

“Shell Chemical still has several critical milestones to achieve before making a final investment decision on whether to proceed with construction of this proposed complex,” the statement said. The site Shell is considering is a zinc smelter owned by Horsehead Corp. On June 28, Horsehead said it had signed an agreement with Shell to extend Shell’s option on the property until the end of this year.

“The option that was in place expired at the end of June, but we’ve negotiated another six-month option through the end of the year. So we think that’s a very likely outcome, that they will exercise that option,” Horsehead Holding Corp. CEO James M. Hensler said in a conference call with investors several weeks ago, according to a transcript of the call by the website seekingalpha.com.

Ethane is a liquid that is a byproduct of drilling for natural gas in the shale gas region that includes northern West Virginia. The ethane molecule can be broken apart, or “cracked,” and put back together to form chemicals that are useful in various manufacturing processes and products.

Not all Marcellus shale regions produce liquids along with gas. Those that do are known as “wet gas” areas, and companies that produce gas are concentrating their efforts in those areas instead of “dray gas” areas, which produce less or no liquids.

In June 2011, Shell announced plans to assess the building of a world-scale petrochemical complex in the US Appalachian region that would upgrade locally produced ethane from shale gas production.

West Virginia, Pennsylvania and Ohio competed to be designated as the preferred site for the plant. On March 15, 2012, Shell signed a land option agreement to evaluate the Monaca site.

Shell said it looked at various factors to select the preferred site. Among them:

•     Good access to liquids-rich natural gas resources and water;
•     Road and rail transportation infrastructure;
•     Power grids;
•     Economics;
•     Sufficient land to accommodate facilities for a world-scale petrochemical complex and potential future expansions.

In addition to an ethane cracker, Shell is also considering polyethylene (PE) and mono-ethylene glycol (MEG) units to help meet increasing demands in the North American market. The company anticipates that much of the PE and MEG production would be used by industries in the northeastern US.

The Shell plant would be the first by a major corporation in Appalachia, although other companies have announced plans to build smaller cracker plants. Some gas liquids are being taken (or plans are in place) from the shale regions by pipelines to crackers in other areas, including the Gulf Coast, .. (as well as Canada and the East Coast).

See also the recent post here on Shell’s favored treatment in Pennsylvania.  For more on this proposed cracker plant see here and here.

Fracking Friends in Pennsylvania

Commentary by Walter Brasch, Wanderings Blog, August 10, 2013

Royal Dutch Shell, which owns or leases about 900,000 acres in the Marcellus Shale, had a great idea. It wanted to frack the Ukraine. But, there was opposition. So, Royal Dutch Shell decided to create a junket for some of the Ukrainians opposed to fracking to show them just how wonderful fracking is.

They were going to bring the Ukrainians to northeastern Pennsylvania, and give them an all-expenses-paid four day tour. The tour was to begin at the end of July. Other shale gas corporations have created press junkets, where they lay out a nice day or two of activities, complete with handouts, trinkets, meals, and lodging. Members of the establishment press often go on these junkets. Some take what they’re told, rework it, and put it into print or on the air.

Now, the people of the Ukraine anti-fracking movement aren’t idiots. They weren’t just going to take whatever they were shown and told. So, they contacted the state’s leading fractivists and anti-fracking organizations. They wanted to learn all the facts—not just what was spoon-fed to them. They were willing to talk to anti-fracking activists when there were no other scheduled activities.

But Royal Dutch Shell was monitoring FaceBook and the Internet, and saw that the Ukrainians were trying to talk to the grassroots movement in Pennsylvania to get all sides of the issue.

What a company with solid PR would do would be to just deal with it—and hope that its side could be presented, and the people would make reasonable decisions. But, Royal Dutch Shell, apparently, has some rather lame six-figure income PR people and administrators.

Royal Dutch Shell decided it didn’t want to deal with having any opposition to its PR tour. So, the company that has about $360 billion in assets–and made about a $27 billion profit last year, placing it No. 1 on the Fortune 500 list—cancelled the tour less than a week before it was to begin.

But the story doesn’t end with a cancelled press junket. Royal Dutch Shell is embedded into Pennsylvania politics.

The foreign-owned company was thinking about building an ethane cracker plant about 30 miles northwest of Pittsburgh. A cracker plant takes natural gas and breaks it up to create ethylene, primarily used in plastics. Royal Dutch Shell considered placing the plant beside the Ohio River in Pennsylvania, Ohio, or West Virginia. All three states were interested, but Pennsylvania held out the most lucrative corporate welfare check for the company, which had spent $14.5 million in lobbying during 2012, about 10 percent of all lobbying costs for all gas and oil corporations.

The Pennsylvania legislature handed over a 15 year exemption from local and state taxes, apparently without consulting local officials in Beaver County’s Potter and Center townships. Tom Corbett, who never met a gas driller he didn’t like, then approved a $1.65 billion tax credit over 25 years, tweeting, “A crackerplant would create up to 20,000 permanent jobs in Southwest PA.” The reality is considerably lower.

Shell stated it planned to hire only 400 to 600 persons; because of the location, many new employees would probably be Ohio and West Virginia residents. Even if all possible indirect jobs—including more low-wage clerks at local fast food restaurants—were added, the most would be about 6,000–7,000 employees.

Pennsylvania may have been able to attract the plant without giving up so much corporate welfare. A Shell news release stated the company “looked at various factors to select the preferred site, including good access to liquids rich natural gas resources, water, road and rail transportation infrastructure, power grids, economics, and sufficient acreage to accommodate facilities for a world scale petrochemical complex and potential future expansions.” Even then, Shell said it could be “several years” before construction would begin. At the proposed location, the Horsehead Corp., which signed an agreement with Shell to sell the land, has until April 30, 2014, before Shell could begin construction.

Corbett may have believed that extending corporate welfare to Royal Dutch Shell was just good business, and would spur job creation and the economy. But, there is another probability for his generosity, and it’s both personal and political.

Dory Hippauf’s “Connecting the Dots” series explains why Corbett may have been so generous with extending tax credits and subsidies, and it begins with billionaire Terrance (Terry) Pegula, who sold East Resources to Royal Dutch Shell in 2010 for $4.7 billion. East Resources, according to reporting in the Buffalo News, had “a less-than-stellar track record in the environmental dicey business of drilling for natural gas.”

Terry and Kim Pegula donated $280,000, and Shell donated about $358,000, to Corbett’s political campaign for governor. As governor, Corbett appointed Pegula in March 2011 to the newly-formed Marcellus Shale Advisory Commission, which was loaded with pro-fracking energy company executives prior to being disbanded after fulfilling Corbett’s vision to produce a pro-industry report.

The story continues at Penn State, where the Marcellus Center for Outreach and Research (MCOR) announced that with funding provided by General Electric and ExxonMobil—which donated a combined $2 million to Penn State, the University of Texas, and the Colorado School of Mines—it would offer a “Shale Gas Regulators Training Program.” The Center had previously said it wasn’t taking funding from private industry. However, the Center’s objectivity may have already been influenced by two people—Tom Corbett, who sits on the university’s board of trustees, and Terry Pegula.

Hippauf made a few more connections. Pegula is full owner of the Buffalo Sabres of the National Hockey League. Penn State had Division II ice hockey teams that played in a 1,350 seat stadium. That would change. In September 2010, Penn State announced that Pegula and his wife, Kim, donated $88 million, the largest individual gift in Penn State’s history, to fund a world-class 6,000-seat ice hockey arena; the men’s and women’s ice hockey teams would now become Division I athletics; the arena will be completed this Fall. While understanding a person’s motives is difficult, it’s possible the Pegulas wanted to do something nice for Penn State. It’s also possible they saw Penn State as a feeder school to the NHL, especially the Sabres. There is also another possibility.

On the day Pegula gave the money to Penn State, he said, “[T]his contribution could be just the tip of the iceberg, the first of many such gifts, if the development of the Marcellus Shale is allowed to proceed.”

So, now we have connections between Penn State, a billionaire with connections to Penn State and Pennsylvania’s governor, and the world’s largest gas and oil multi-nation corporation, which has substantial holdings in Pennsylvania—and is afraid to allow Ukrainians to hear about the negative effects of shale gas drilling.

[Dr. Brasch’s latest book is Fracking Pennsylvania, an in-depth look at the effects of fracking upon health, the environment, and the economy; he also discusses the politics of fracking.]