"Baytown, Texas in the distance. Baytown is the location of large oil and petrochemical refineries."
Crossing Pennsyltucky, enroute to Pittsburgh, I commonly see pickups with Oklahoma and Texas plates. Has to be Gulf Coast expats working the fracking fields of Penn's woods. So effective have they been at their work, US natural gas prices remain at a record low.
State politicians say the fracking and pipe laying jobs are what's needed to get the Pennsylvania economy back on its feet. On the other hand, mid-state papers report there are not enough places to stay for the numerous expat rig workers and that local governmental services are stressed by so many newcomers. It's a mixed bag.
Shell wants to build an ethylene 'cracker' close to the feedstock.
It's uncertain as to whether fracking will be a long term employment positive for the Pittsburgh area. Adding value by cracking the natural gas produced by fracking would go well beyond mere resource extraction, producing jobs for educated workers. On the other hand, I doubt there are many skilled petrochemical plant workers to be found in northern Appalachia - workers already trained and able to safely build and operate a massive petrochemical complex of the sort Shell is talking about.
What is a 'cracker?'
'Cracking' is how you make ethylene from raw natural gas: breaking the longer carbon chains down to make the base feedstock for polyethylene and other commodity plastics: ethylene. One market expert quoted by ICIS.com states that "more than 80% of North American ethylene production relied on natural gas liquids as a feedstock in 2011.
Take home messages: without a steady source of cheap natural gas, plastics get more expensive and petrochem profits go down. Once Shell vests in a northern Appalachian cracking plant, pressure to keep the fracking going would accelerate. This decision is, therefore, a very big deal.
Pittsburgh area may get cracking.
While Shell is creating quite a local stir with it's plans for a billion-dollar+ ethylene cracker - organized labor doing dances of joy- I doubt they'll l ignore resumes from the experienced, non-union petrochemical plant workers currently residing on the Gulf Coast, where most operating US ethylene crackers are lcoated. This cite from an NPR report needs to be looked at in that perspective.
"Cracker" is industry lingo for a plant that takes oil and gas and breaks them up into smaller molecules. An ethane cracker creates ethylene, a compound used in the manufacture of plastic. There's much more ethane in Appalachia these days thanks to controversial drilling techniques known colloquially as "fracking."
Beverly Saylor, a geologist at Case Western Reserve University, says it has been awhile since companies looked to build new crackers in the U.S.
"Plastic was made overseas, and that's because there wasn't enough natural gas," she says. "But now with all the shale gas development, the price has come down on that, and so it's now worth it."
Construction of a cracker facility could cost several billion dollars and employ as many as 10,000 construction workers at its peak. Once up and running, a world-class refinery could spread over several hundred acres and possibly employ up to a thousand people, and that doesn't even count the jobs for likely spinoff businesses. It's enough to have state officials seeing stars.
Where would Pittsburgh-made ethylene go?
Ethylene gas could be shipped back to plastic making plants on the US Gulf Coast, a fairly hazardous undertaking. It could be made into polyethylene pellets and shipped anywhere in that benign form. Both could happen. If it scales up significantly, the result would be quite a Texification,. Here's the analogous condition: from a from Wikipedia cite.
Houston is one of the world’s largest manufacturing centers for petrochemicals, and the $15 billion petrochemical complex at the Houston Ship Channel is the largest in the country. Supporting the industry is a complex of several thousand miles of pipeline connecting 200 chemical plants, refinery, salt domes and fractionation plants along the Texas Gulf Coast, which allows transfer of feedstocks, fuel and chemical products among plants, storage terminals and transportation facilities. Houston has more than 400 chemical manufacturing establishments with more than 35,000 employees. Houston has two of four largest U.S. refineries. ExxonMobil’s complex in Baytown is one of the oldest in the area and one of the largest of its kind in the world
More than 235 establishments in the Houston metro area manufacture plastic and rubber products. Houston dominates the U.S. production of three major resins: polyethylene (38.7% of U.S. capacity); polyvinyl chloride (35.9% of U.S. capacity) and polypropylene (48.4% of U.S. capacity).
Air quality scenarios.
Speaking of Houston, where air quality currently sucks, deniers not withstanding - see No Child Left Unpolluted In Texas: School Absence Rates Linked To Air Quality, for background. - a big chunk of of the ground-level smog along the Gulf coast is attributed to industrial emissions. A range of similar adverse air quality impacts could come to the Pittsburgh area via several equally plausible scenarios, reviewed below. Each scenario would play out over a 10 to 20 year time frame.
Note: I don't view any one scenario as more realistic. It's up to voters and citizen activists and corporate lobbyists to shape the future.
President Obama, this scenario assumes. does not get a second Presidential term. The resulting Tea-PA Agency, successor to the former USEPA, defers entirely to individual States on permitting requirements. That air emissions cross state boundaries matters not to the new Administrator.
Whichever Appalacian governor delivers the easiest permit compliance conditions gets the plant. Citizens of the hosting state might as well go live in the Niger Delta.
Shell Does The Right Thing
Shell, the only oil major that uses scenario planning to evaluate strategic business decisions, decides Republican Way is far too risky a path to take for such a massive investment. Instead, they require that states vying for the new cracking plant collaborate with the Shell engineering team on preliminary air quality modeling assessments before the finalists are selected. The goal is to identify sites for the new plant that would have the least possible impact on air quality limited developed areas. Shell cares about quality of life for surrounding communities and wants to bring that message forward at the get go. Moreover, they announce, EPA will have to be at the table and participating actively.
Republicans Governors are shocked but decide they have no recourse, and are thus forced to keep state permitting staffs around long enough to comply with Shell's requirements.
Lawyers & Think Tanks Win, People Lose.
This is too depressing to explain in full. I'm just going to leave you with a hint. Shell gets fed up with partisan-fired legal delays and leans toward a fourth scenario: Pipelines To The Gulf