Shell Oil Co. has announced plans to develop an ethane cracker making the plastic feedstock ethylene — and possibly downstream polyethylene units — at an undisclosed location in Appalachia, which includes parts of Pennsylvania, West Virginia and Ohio. In a June 6 news release, officials with Houston-based Shell said polyethylene (PE) is “the leading option” for downstream derivative choices. They described PE as “an important raw material for countless everyday items” and added that most of the resulting PE production will be used by Northeastern industries.
Shell Oil President Marvin Odum said, “With this investment, we would use feedstock from Marcellus to locally produce chemicals for the region and create more American jobs. A cracker and derivatives complex “typically takes at least five years to build, from the early definition of the project to being on-stream.”
It’s possible Shell would want to work with international firms that have been eyeing the North American market — such as Saudi Basic Industries Corp. of Saudi Arabia or Brazil’s Braskem SA — to develop new PE sites. Other firms such as Dow Chemical Co. and Westlake Chemical Corp. have announced ethylene expansions to take advantage of the new natural gas, but Shell is the first to place such a project in the Northeast. The Shell project would be the first new ethylene cracker to be built in North America since 2001.
Shell owns or leases the natural gas rights for 700,000 gross acres in the Marcellus. Most of that acreage is in Pennsylvania, which makes it likely the new cracker would be located there. The firm operates an office in Warrendale, Pa., about 30 miles north of Pittsburgh, and employs almost 250 in natural-gas-related businesses across Pennsylvania. In July, Shell acquired East Resources Inc., a Warrendale-based oil and gas supplier.
Among those who follow plastics and chemicals markets, reaction to Shell’s big news was mixed. One observer who was less than thrilled with the announcement was Emily Wurth, water policy director for Food & Water Watch, a non-profit organization in Washington. Wurth’s group and other environmental organizations have questioned the hydraulic fracturing process — know as “fracking” — used to access shale gas because of the possibility of groundwater contamination. “We have a lot of concerns about the new technologies around fracking and the risk it poses,” Wurth said in a phone interview. “There’s a risk to public health and to the environment.”
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