Roundtable takes long-term look at cracker plant's economic impact here

It will be some time before Shell Oil begins constructing its ethane cracker plant in Beaver County, and it could be several years before it begins production.

But on Wednesday, about 25 people, including state and local politicians, as well as representatives of Washington County’s economic and workforce development agencies, were asked to consider the potential long-term impact of Shell’s project here.

The request came from Dennis Davin, secretary of the state Department of Economic and Community Development.

“Our communities should prepare for changes ahead and consider the revitalization needs that will support their future growth,” said Davin, whose stop here was part of several he began making this week in several counties, including Beaver and Lawrence, with more planned, including one in Greene County.

Before the 90-minute roundtable discussion at Courthouse Square was over, participants also got an assignment from Davin.

“Send me lists of what you think you’ll need,” Davin told the roundtable, explaining his department will soon begin preparing for next year’s state budget, and needs to make legislators aware of the types of funding the agency will need for economic and community projects.

Those lists could be extensive, given the size and scope of Shell’s project, whose buildout could be somewhere between $2 billion and $6 billion. According to Davin, that expenditure could create a ripple effect of another $6 billion in related development projects spread across Southwestern Pennsylvania.

He stressed officials need to take a long-term view of development for “five, 10, 15 or 20 years out."
Those projects will probably involve everything from making pad-ready sites available to ensuring the local workforce is adequately trained for the jobs expected to be created from the ripple effect.

The lists will probably be subject to changes, as Davin explained the Shell project – the largest industrial development in the region in generations – is still in the planning process.

On June 7, Shell Chemical Appalachia LLC announced it will build an ethane cracker plant in Monaca that will create as many as 6,000 construction jobs and 600 permanent jobs once it begins production early in the next decade. Construction is expected to begin in December 2017.

Davin and others at DCED have been working with Shell, but he acknowledged the company isn’t able to tell him everything about the project.

The plant will crack ethane molecules into petrochemical building blocks that can be refined to create polyethylene, a plastic used in everything from food packaging to automotive parts.

When asked by Mary Stollar of Washington County Chamber of Commerce if the company could identify its end-users and their site requirements, Davin said that information isn’t available.

“Shell has been tremendous to work with, but there are things they can’t share with us yet,” he said.

Washington Mayor Scott Putnam said while the city once had a large manufacturing base of glass and steel, those industrial assets are gone.

“We won’t have jobs in downtown Washington” as a result of the cracker plant, Putnam said, adding the city could have housing stock for some of the workers that might be moving to the area.

Davin noted his agency already learned some things about the project since Shell green-lighted it:

• The cracker plant may not attract as many plastics manufacturing operations to the region as originally anticipated, but there will be some.

Despite that prospect, Davin said, “There are tremendous opportunities for other businesses to come in because this is the first ethane cracker plant to be built outside (of the Southeast).”

• DCED has begun discussion with utilities that have shuttered several coal-fired power plants in the region about the potential of repurposing them for other operations. “They’re on the rivers, they have rail connections and they’re flat,” he said.

• Davin also said that other companies are considering plans to build other ethane crackers in the region, with a current focus on one in West Virginia and another in Ohio.

Another area that drew discussion Wednesday was workforce development and the ability to retrain those who have lost jobs in coal and natural gas over the past two years.

Ami Gatts, who heads Washington-Greene Job Training Agency, also said workforce development officials need to make a concerted effort to promote manufacturing as a career goal for students.

State Rep. Brandon Neuman, D-North Strabane Township, said he wants to ensure the area’s residents will have the opportunity for any jobs created as a result of the cracker’s proximity.

“I don’t want the Marcellus Shale to create another job in Louisiana,” he said. “I want the Marcellus Shale to create another job in Western Pennsylvania.”