MDN Weekly Update – Feb 12, 2012: Shell’s Cracker Plant

poll resultsThis week MDN asks the poll question, “Where will Shell build its new cracker plant?” MDN reported some three weeks ago that the timing for Shell’s announcement had changed from January to February (see this MDN story). Unless the timeline changes again, which is not beyond the realm of possibility, we should find out very soon where Shell has decided to build a plant.

Since there are new MDN readers each week, a very brief petrochemical lesson in case you’re not quite sure what a cracker plant is, and why it’s important. When natural gas is drilled, the primary chemical compound that comes out of the bore hole is methane, what you typically think of as “natural gas.” But other chemical compounds come out as well, along with the methane. The second largest chemical component by volume is a chemical called ethane (one of the natural gas liquids, see this MDN story for more on NGLs). Anywhere from one to six percent of what is mined is ethane. All of the gas that is mined needs processing to separate it into its components. What happens with ethane?

Ethane can be further processed, or chemically “cracked” into ethylene, which is a raw material used to make plastics. When Shell builds its $1.5-$2.0 billion ethane cracker plant, it means that dozens, perhaps hundreds of other businesses that manufacture plastics will locate around the plant like satellites orbiting a planet. All of sudden, what is a great opportunity—two billion dollars of investments and thousands of jobs—becomes 15 to 20 billion dollars of economic activity, tens of thousands of jobs, and billions in new tax revenue. It is truly a mind-blowing opportunity for the state that lands the cracker plant.

So now you have an inkling why West Virginia voted to eliminate property tax for any plant that invests at least $2 billion. And why Ohio is offering $1.4 billion in incentives. And why the governors of both WV and OH have flown to Houston to meet with Shell to try and convince them to select their state (see this MDN story).  Lately, Pennsylvania is also getting in on the action, with Sen. Bob Casey calling and issuing press releases every other day (see this MDN story). And as everyone knows, PA has a pro-drilling governor, Tom Corbett.

So where will it go? It’s truly anyone’s guess. We know this much: It will be built in either West Virginia, Ohio or Pennsylvania. Shell has stated they have certain requirements, like easy access to a river and railroad lines. WV has all but promised to build new short line railroads and bridges if necessary. All of the states are “bidding” to get the plant by offering various deals.

What do you think? Not, “what do you hope.” From reading various accounts of who’s trying the hardest to attract the plant, where do you think Shell will end up building it? Register your vote along the right side of any page on the site. Let’s have some fun and see if the MDN readership can accurately guess the outcome.

Last Week’s Poll

Last week’s MDN poll asked your opinion of the documentary file Gasland. A sizable number, nearly one quarter, have not yet seen it. Of those who have watched it, a majority of MDN readers believe Josh Fox is not playing fair with his viewers. MDN doesn’t think so either. Here are the results:

Is the documentary Gasland:

Mostly inaccurate/propaganda (56%, 132 Votes)
Haven’t watched it (23%, 53 Votes)
Mostly accurate/truthful (21%, 49 Votes)

Total Voters: 234

Below are the most recent “top 5” lists and the calendar of Marcellus-related events for the next two weeks.

Happy reading,
Jim Willis, Editor

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