Economic Impact | Energy Companies | Industrywide Issues | Pennsylvania | Processing Plants | Shell | Washington County
Intl Plastics Co Selects W PA for Regional HQ Thx to Shell Cracker
In June, Shell announced a final investment decision (FID) to move forward with building a multi-billion dollar ethane cracker plant in Pennsylvania (see Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!). While everyone is excited about the jobs and money that will be spent to build the plant, the much larger benefit will come when petrochemical manufacturers build new plants in the region to take advantage of low-cost polyethylene that will come from the cracker. We already have our first case of a major manufacturer announcing a new plant in the region, thanks to the Shell cracker…
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Peters Township, the most populous township in Washington County, PA, is one of the seven selfish towns that sued the state over the zoning provisions in the Act 13 law, eventually winning at the PA Supreme Court level (see 
A banker, a real estate developer and a natural gas drilling company rep walk into a bar… No wait! This isn’t a joke! A banker, a real estate developer and a natgas drilling rep were panelists at seminar held yesterday, organized by the Pittsburgh Business Times. Even though there has been a major slowdown in Marcellus/Utica drilling, all three panelists were upbeat and optimistic–in no small part because of the coming Shell ethane cracker in nearby Beaver County. One comment made about the Shell cracker: “We’re not just building a facility; we’re building an industry.” That’s just how major the Shell project will be in the greater Pittsburgh area. Another comment: “The Marcellus Shale is not in the tank…It has slowed down, which is typical of industries that are sensitive to price cycles, [but] it’s consistent, affordable and is stable.” More interesting tidbits from the PBT soiree…
The Pennsylvania Department of Environmental Protection (DEP) has fined two CONSOL Energy subsidiaries, CNX Gas (the drilling division) and CONE Midstream (co-owned by CONSOL and Noble Energy) for coloring outside the lines when they built some gathering pipelines in four western Pennsylvania counties. CNX was fined $139,000 and CONE was fined $45,000 for veering off the path officially filed with the DEP. According to DEP spokesman John Poister, the numskulls didn’t pay attention and were sloppy (our words, his sentiment). Here’s the official announcement from the DEP, along with comments from Poister…
We suppose we should have known, but we didn’t. We didn’t know that Pennsylvania has a Department of Community and Economic Development (DCED). In fact, the DCED has its own cabinet-level Secretary–Dennis Davin–appointed by Democrat Gov. Tom Wolf in January 2015 when Wolf assumed office. Davin has stayed largely under the radar–until now. Wolf has sent Davin out on a road show to promote the forthcoming Shell ethane cracker plant. Davin is conducting roundtable discussions in various communities around PA to generate ideas on how local businesses can benefit from the cracker. So far he’s visited Beaver County (where the cracker will be built), Lawrence County and Washington County. The DCED is flooding the airways with press releases about Davin’s cracker road show…
Unfortunately a Pittsburgh-area newspaper, the Washington (PA) Observer-Reporter, has fallen prey to a lie. Somehow the paper’s editors think because there’s not something called “severance tax” in the tax code of Pennsylvania, that means the state doesn’t have one–when in fact they do. It’s called an Impact Fee coupled with a corporate income tax. Add the two together, and PA’s drillers pay a “severance tax” rate that is higher than Texas and other shale states. In a recent editorial published in the Observer-Reporter, the editorial board admits that a severance tax is (for now) dead in PA. That’s the good news. When your opponent admits defeat, that’s a good sign. However, the editors still whine for a nosebleed-high severance tax anyway, accusing the drilling industry of getting a “sweetheart deal” that, they say, should end when gas prices go up again…
South Fayette (Washington County), PA is one of seven selfish PA towns that sued the state after the Act 13 law was enacted in 2012 (see 
In 2014, the Pennsylvania Dept. of Environmental Protection (DEP) fined Range Resources a whopping $4.15 million for violations related to several of Range’s wastewater impoundments in Washington County, PA (see 
In May 2015 MDN reported that after more than two years of acrimony and lawsuits between Range Resources and Mt. Pleasant (Washington County), PA., Range agreed to close four freshwater ponds (called “impoundments,” not to be confused with wastewater impoundments) the company was using to drill wells in nearby non-Mt. Pleasant locations (see 
Since 2012 MDN has had our eye on a “feel good” story–about a physician who immigrated from India to Bentleyville, PA and his son. The Gosais (doctor father and son) took to investing in hotels in western PA (they began building them in 2000). With the fracking boom, the Gosais began to cater to the Marcellus industry (see 
Details are just now coming to light of a new E&P (exploration and production, or drilling) company headquartered in Pittsburgh and focused totally on the Marcellus and Utica region. Until now the company has flown under our radar. The company is American Petroleum Partners (APP)–not to be confused with Aubrey McClendon’s American Energy Partners (AEP)–and is headed by Rice Energy alumnus Varun Mishra, who is the founder and CEO. The big news is that last September Mishra’s new company, founded in 2014, received a major injection of investment capital. Apollo Global Management invested $411 million in APP with the option to double it up to $800 million. MDN has it on very good authority that although APP quietly issued a press release about this last September (see it below), the company has intentionally kept the news quiet. Not any more! Big mouth MDN is blabbing it to the world. Below are the bits and pieces we’ve been able to put together about this newest Utica/Marcellus driller…