Latest News by Industry
MONACA, Pa. (AP) — Years in the works, a massive petrochemical refinery in western Pennsylvania fed by the vast natural gas reservoir underneath Appalachia became fully operational Tuesday, oil and gas giant Shell plc said.
The refinery, built on the site of a former zinc smelter along the Ohio River some 30 miles northwest of Pittsburgh, will produce 3.5 billion pounds of polyethylene annually when it ramps up to full production by the second half of 2023, Shell said.
The refinery brings in ethane from natural gas wells and chemically “cracks” the liquid fuel by heating it in furnaces to create ethylene, which is used to produce everything from plastics to tires to antifreeze.
Shell, the British multinational oil and gas company headquartered in London, had projected to spend $6 billion on the plant, making it one of the largest — if not the largest — industrial developments in Pennsylvania.
The plant’s promoters have promoted it as the key to reindustrializing Pennsylvania, where many towns and cities have suffered from the loss of the steel and coal industries.
Environmental advocacy groups, however, have fought it and predicted that it will generate more plastic pollution, compounds that form smog and planet-warming greenhouse gases.
A leading gas exploration trade association, the Marcellus Shale Coalition, hailed the opening of the refinery, calling it an “historic day for Pennsylvania.”
The natural gas boom in the vast Marcellus Shale gas reservoir beneath Appalachia attracted Shell to the area. In 2012, the state signed off on a tax break of up to $1.65 billion over 25 years to lure it, and later issued air and water permits to Shell, which began construction in 2017.
The plant looks very similar to a gasoline refinery, with miles of pipes and large storage tanks. The core manufacturing and logistics area covers about 385 acres (186 hectares), with an overall site footprint of about 800 acres. It includes its own power generation and water treatment plants.
The plant is the first major polyethylene manufacturing complex in the northeastern United States, according to Shell.
Most ethylene production is on the Gulf Coast in Texas and Louisiana. Shell says the location gives it a competitive advantage, with more than 70% of the U.S. polyethylene market within 700 miles (1,127 kilometers) of Pittsburgh.
Annual U.S. ethane consumption has doubled in the past decade as demand for ethylene has grown. Ethane consumption recently rose above 2 million barrels per day, according to the Energy Information Administration, an arm of the U.S. Department of Energy.
Shell's plant in western Pennsylvania is estimated to add 96,000 barrels per day of ethane feedstock capacity, the agency said.