Shell Oil May 'Crack' Land Northwest Of Pittsburgh

While the $2-billion Marcellus, Devon and Utica natural gas plant mega-deal is still in the option phase, it could spur greater economic development.

Published on: Mar 19, 2012

Land and property values got a lift in Beaver, Butler and Washington counties, Pa., last week. On Thursday, Shell Oil announced that it had taken an option on the Horsehead Corporation's zinc smelting plant on the Ohio River at Monaca, Pa., to build Shell's first U.S. natural gas ethylene cracking plant.

The site is 35 miles northwest of Pittsburgh, 12 miles from West Virginia's border and about 15 miles from Ohio. It has easy access to rail and river transportation. Don't look for construction to begin anytime soon, though.

A Horsehead spokesman says the zinc smelter would have to vacate the over 300-acre site by April 30, 2014, under the terms of the Shell option agreement. But it's already closing down operations and moving to a new site in North Carolina.

Shell Oil May Crack Land Northwest Of Pittsburgh
Shell Oil May 'Crack' Land Northwest Of Pittsburgh

While Shell refers to Horsehead as its preferred site, environmental and technical reviews must be completed before the project moves forward. The company produces ethylene from oil in Texas and Louisiana, according to Kayla Macke, a spokeswoman for the Houston-based company. Shell's only other natural gas ethylene cracking plant is a joint venture in China.

The plant could produce more than 1 million tons of ethylene each year, using "wet gas" extracted from wells in the Marcellus, Devon and Utica shale formations in Pennsylvania, Ohio and West Virginia, she says. It reportedly could cost up to $2-billion to build and employ up to 500 people.

Ethylene made from ethane is used to manufacture petrochemical products such as plastics and fertilizer. But state officials are already rubbing their hands together in eager anticipation of industry-multiplier effects. One estimate is that it could attract some $16 billion in associated industry expenditures and with more than 17,000 jobs.

Environmentalists are already weighing in with negative concerns. "It's going to be a very big pollution source," worries Myron Arnowitt, Pennsylvania state director of Clean Water Action. A strong western Pennsylvania voice against shale gas fracking, this group warns of the dangers of bringing heavy industry back to the Ohio Valley. "What are the emissions from this plant going to be? What kind of controls is this company willing to put in?"

Pennsylvania offered 15 years of tax breaks. And as extra incentive, Act 13, signed into law in February, directed 5% of shale gas impact fee rev­enue toward "infra­struc­ture projects related to the nat­ural gas indus­try."

The region needs to work together to develop the Marcellus shale and attract more than one cracker,  points out U.S. Senator Joe Manchin, D-W.Va. "Whether its built in Pennsylvania, West Virginia or Ohio, the plant is going to create good-paying manufacturing jobs and revitalize our chemical industry."