Ohio Now in the Hunt for an Ethane Cracker

You can add Ohio to both Pennsylvania and West Virginia on the official list of eastern states actively courting the investment of Shell and others who seek to build an multi-billion dollar ethane cracker plant.

With Chesapeake Energy Chief Executive Officer Aubrey McClendon estimating the value of the state’s Utica Shale gas reserves at about $500 billion, some believe Ohio may be a prime location for a multi-billion-dollar ethane cracker.

"Shale gas is a game-changer for the chemistry industry – and Ohio," said American Chemistry Council Chief Executive Officer Cal Dooley in addressing the Ohio Governor’s 21st Century Energy and Economic Summit last week. Ohio is home to some Marcellus Shale, but mostly Utica Shale.

As West Virginia officials continue their efforts to attract an ethane cracker – possibly to property owned by Bayer Corp. near New Martinsville – chemical and natural gas industry leaders are touting the Ohio Utica Shale as potentially being able to supply enough ethane to support a cracker.

The ethane is produced when processing plants strip the natural gas liquids found in "wet" gas away from the methane natural gas. This ethane can then be "cracked" to form ethylene, the basis of plastic. Other liquids found in the wet gas include propane, butane and pentane.*

State officials from all three states are working hard to attract the cracker plant to their states because the economic payoff will be huge:

Dooley said a recent chemistry council study found a new petrochemical plant, such as an ethane cracker, in Ohio would generate $7.5 billion in chemical industry output in the state, as well as 17,000 Ohio jobs in chemistry and supplier industries, $1 billion in Ohio wages and $169 million in state tax revenue.

Dooley has also said attracting an ethane cracker would help generate 12,000 direct and related jobs for West Virginia, generating about $729 million in annual wages.*

*The Intelligencer/Wheeling News-Register (Oct 2, 2011) – Ethane Cracker May Come to Ohio