Stop Press: Shell Chemical has selected a location in Beaver County, Pennsylvania to potentially build an ethane cracker plant. Shell announced yesterday afternoon that the company has signed a land option agreement with Horsehead Corporation to “evaluate a site” near Monaca, PA, which is about 35 miles northwest of Pittsburgh, along the Ohio River (see the inset map). The site is about 15 miles from the borders of both West Virginia and Ohio, so Shell chose a location about as close to the tri-state border as it could get.
This is headliner news because the facility itself will mean at least $2 billion of investment to build, creating some 10,000 jobs both to build it and to operate it after it’s built. One of the components of “wet gas” or natural gas liquids found more often in western Pennsylvania and eastern Ohio is ethane. An ethane cracker plant chemically “cracks” the ethane into ethylene, which is a raw material used to make plastics and other materials. With an abundant supply of wet Marcellus and Utica Shale gas, the plant will have plenty of cheap ethane to crack.
Once the plant is built, other businesses that use cheap ethylene to manufacture plastics will also locate in the vicinity of the plant. The multiplier effect will be huge in the entire region—some estimates are as high as $15-$20 billion of new economic activity could come as a result of the plant.
All three states lobbied Shell heavily, offering various incentives to locate the plant in their state. A few weeks ago, MDN readers and MDN editor Jim Willis had some fun predicting where the plant may go. Jim was wrong! He predicted it would be built in West Virginia’s panhandle for a variety of reasons (see this MDN story). However, MDN readers guessed correctly. In a poll taken Feb. 12-18, 42 percent of MDN readers said the plant would be built in PA, 31 percent said OH and 27 percent said WV. Kudos to MDN’s readers!
Water test results from the federal Environmental Protection Agency confirm what the Pennsylvania Department of Environment Protection has said all along: Well water in Dimock, PA has not been contaminated by hydraulic fracturing chemicals. The PA DEP investigated claims from some Dimock residents that their water had been contaminated by gas drilling done by Cabot Oil & Gas.
In 2010 the DEP found that Cabot’s drilling had led to methane (natural gas) migration into 19 area water wells—something that Cabot still disputes as the area has been known for decades to contain methane in its water supplies. Methane is harmless to drink, but it is an explosion hazard, so the DEP ordered Cabot to pay the affected homeowners twice the value of their property and install a methane filtration system on each home’s water supply (wells or springs). Eleven of the 19 families affected refused the settlement and decided instead to sue Cabot, holding out for a bigger pay day.
If proposed new EPA air emissions regulations go into effect later this year as proposed, the number of wells drilled using hydraulic fracturing will drop by half, according to a study commissioned and just released by the American Petroleum Institute (a copy of the study is embedded below). The Obama administration has given lip service support for shale gas drilling, most notably in Obama’s recent State of the Union speech—but the administration’s actions don’t match their words.
According to the study, the new EPA regulations would result in an 11 percent drop in gas production, and a 37 percent drop in domestic oil production. The federal government will also receive $8.5 billion less in royalty payments from reduced drilling.
Yet another case of anti-drillers behaving badly. At yesterday’s meeting of commissioners of the Susquehanna River Basin Commission (SRBC) in Harrisburg, PA, demonstrators tried to stop the commissioners from doing their work during an open meeting. The commissioners were voting on water withdrawal requests for Marcellus drillers, among other items on the agenda. And protestors once again tried to stop an SRBC open and public meeting.