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Businesses Learn How to Get a Piece of $6B Shell Cracker Pie
As the mighty $6 billion Shell ethane cracker begins construction in Beaver County, PA, plenty of local (and regional) businesses are asking the question: How can we get in on the action? How can we win contracts for goods and services? The Beaver County Chamber of Commerce aimed to help answer that question yesterday at a 3-hour event held at the Club at Shadow Lakes. The “Doing Business in the Era of Shell” seminar drew a crowd of 300+. Some of the speakers were from Louisiana–where they went through a similar process when SASOL built an $11 billion petrochemical project there. Here is some of the wisdom passed along to those who attended…
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MDN has been tracking the prices paid by Shell to landowners to run an ethane pipeline under their land to feed the might cracker plant the company is just now beginning to build in Beaver County, PA. Why? So landowners in Beaver (and other locations) have a useful metric for judging the offers they receive. To be fair, a company that wants to run a local gathering pipeline across someone’s land will pay a lot less than Shell is willing to pay–given you can’t move the cracker plant. Interstate pipelines will likely pay something less too. But still, we find it interesting and useful to know what Shell is up to in Beaver. We don’t have a lot of data points, yet. In June, we learned that Shell paid roughly $75 per foot for 3,138 linear feet of pipeline space in Greene Township (see 
Shell officials held the fourth (so far) public meeting in Beaver, PA to talk with local residents about the mammoth, $6 billion ethane cracker plant the company is building in their midst. For the most part, the event was uneventful. More than 150 people came out to hear what the petrochemical giant had to say. A table at the event held polyethylene pellets–the stuff that will be manufactured by the plant. Also on the table were a variety of products made from those pellets, including bottles, food packaging and more. One local resident opposed to the plant told a reporter she had to restrain her potty mouth because Shell officials would not answer her questions from the floor–in front of the crowd. Shell (and others in the o&g industry) have wised up. They post representatives at tables who are happy to answer private questions privately, but they don’t throw open the floor to antis who want to bleat and blat in front of an audience. We think it’s a wise precaution. The woman could get her questions answered, and express her unhappiness–but she wanted to do it in front of a crowd and in front of cameras and microphones. No thanks. Organize your own meeting if you want to do that…
Good news if you’re a welder, or interested in a welding career, and you live in southwestern Pennsylvania. Shell needs you. Shell is in the process of building a massive, $6 billion ethane cracker plant in Beaver County, PA (northwest of Pittsburgh). Cracker plants have lots of pipes that need to be welded as the plant goes up. While these jobs are not long-term, as in “the rest of you career,” they’re long enough, likely lasting several years. Steamfitters Local 449 is right now recruiting new apprentices, offering a free 17-week apprentice training program. Local 449 is holding an open house this Saturday…
One would hope a $6 billion ethane cracker project like the one being built by Shell in Beaver County, PA would consist of 100% American-made parts. But alas, such is not the case. The biggest story to hit Beaver County, likely ever, keeps reporters at the Beaver County Times busy (“busy beavers”–groan). The ace reporting staff at the local newspaper noticed a job posting from Bechtel Corp., one of the major contractors on the project, on LinkedIn. The job posting advertised for a project superintendent for the Shell cracker plant–a position located in Houston and in Tampico, Mexico. The ace reporters followed it up and got confirmation that some of the components for the cracker plant will be manufactured in Mexico and shipped to PA. No doubt in an effort to tamp down what could become a firestorm, Shell quickly confirmed the Mexico connection and pointed out that “more than 80%” of the individual components for the plant will be built in the U.S. Will this news about Mexico parts make a difference in the larger scheme of things?…
An article published in the anti-drilling Pittsburgh Post-Gazette is quite bizarre–even by Post-Gazette standards. The article reports concerns expressed by residents in Beaver County, PA at a recent meeting of the Ambridge Water Authority. The opener quotes one resident this way: “‘No one knows what’s going to happen when the explosions are set off,’ said Bob Schmetzer, 70, of South Heights, referring to the underground blasting required in the fracking process. ‘God forbid that the dam would breach and take out human lives down Raccoon Valley … that would be a national catastrophe.'” Uh, Mr. Schmetzer sir…and “reporter” Eliza Fawcett…there IS NO FRACKING involved with installing a pipeline. Perhaps they’re both a bit confused? Mr. Schmetzer’s confusion likely comes from working with a local anti-fracking group, the Beaver County Marcellus Shale Awareness Committee. The meeting appeared to have gone downhill from there, with wild claims that “volatile compounds” from the Shell cracker plant will “settle” in the Ambridge Reservoir, endangering everyone who drinks water from it. And that the area will become “Cancer Valley”…
It was more than six months in the making, but finally the Pennsylvania Dept. of Environmental Protection has granted Shell a permit that allows the facility to discharge wastewater and storm water into the Ohio River. Which may sound like Shell just got a permit to pollute the Ohio River–but that’s not what is happening. Shell is building their mighty $6 billion ethane cracker on a site formerly used as a zinc smelter. The old Horsehead Corp. plant held a permit that allowed the plant to discharge wastewater with some total dissolved solids (TDS) into the Ohio. When Shell bought the site, they also inherited the Horsehead permit for wastewater discharge. Shell filed a plan back in December with the PA DEP to modify that permit for the forthcoming cracker plant (see 
Believe it or not, Shell previously hired a third-party consultant to perform a traffic study in the area where Shell plans to build a $6 billion ethane cracker in Beaver County, PA. Based on the findings and recommendations of that study, Shell has begun to secure parking spots for construction workers that will descend on that location to build the plant–beginning later this year. One of the recommendations is to limit the number of parking spots to no more than 1,500 at any one location. Shell currently has three locations lined up and (mostly) ready to go, enough for 3,100 parking spots. At its peak, the project will employ something like 6,000 workers. So either Shell will line up more spots, or maybe workers will carpool…
Whenever a big, important project like the Shell ethane cracker, reported to be a $6 billion investment, goes forward, a whole lotta people were involved before the decision was made. However, if there is one universal truth in business it is this: There is always a champion at the center of any important project. The one person who’s responsibility it is to propel that project forward. The person who, we like to say, has their “butt in a sling.” It is on their shoulders to ensure the projects success. When you dig down into the story of the multi-billion dollar Shell cracker plant now being built in Beaver County, PA, you will find that one person. His name is Brent Vernon. He worked for more than five years to lure Shell to the Keystone State. Vernon was senior project manager for energy for the state when he began working, full time, on the Shell project in 2011. Since then he was promoted, first to deputy director and eventually director of the Governor’s Action Team, a role he continues. Vernon is key–one of the linchpins without whom the Shell deal would not have happened…
The Pittsburgh, PA region has been truly blessed by the Marcellus Shale industry. Largely because of the Marcellus, last year (2016) saw the biggest year ever for capital investment in the 10-county Pittsburgh region–a mind-blowing $10.2 billion of investment! It is the highest capital investment in a single year ever. Now mind you, not all of that money actually got invested last year. Some of it will come in dribs and drabs over the next several years. But all of that $10.2 billion was committed to in 2016. Last week the Pittsburgh Regional Alliance (PRA) issued its annual Business Investment Scorecard. The report (read it below) finds that more than half of last year’s capital investments pledged to Pittsburgh region came from a single project–the $6 billion Shell ethane cracker. The report also found another $3.11 billion worth of investment related to shale gas (processing plants, gas-fired power plants, etc.). Add it all together, and over $9 billion of the $10.2 billion committed last year is due to the Marcellus industry. To which we say, Pittsburgh should bow down and kiss some shale rock…
It’s hard to keep track of all the Marcellus and Utica Shale-fired electric plants being planned, built and going online. We recently highlighted a list of 11 such projects getting built in Ohio (see 
Positive economic signs continue to pop up with respect to Shell’s multi-billion dollar ethane cracker project in Beaver County, PA. Here’s the latest major economic impact from the project. A local developer has filed for a state grant to build a massive new housing project 2.5 miles from the cracker site. The new project calls for 450 housing units, retail space, a golf course, swimming pool and parking garage. What’s that? What happens after the cracker is built and the “temporary” workers, who would be living in this new complex for the next 5-10 years, leave? Great question! Answer: Turn it into a retirement community…