Wednesday, July 12, 2017

Shale-gas boom leads to plastic-pellet plants, but Appalachian infrastructure for them is lacking

A planned cracker plant in Beaver County,
Pennsylvania. (Royal Dutch Shell rendering)
Appalachian states are poised to capitalize on the world's growing appetite for plastics, not only with shale gas and oil drilling, but with plants called "crackers" that turn natural gas byproducts into usable plastic pellets for manufacturers, Tom DiChristopher of CNBC reports.

Northern Appalachian states such as Pennsylvania and New York have large shale-gas deposits and are already profiting from drilling, but the petrochemicals boom has triggered increased investment in crackers. "Since 2010, 301 chemical industry projects worth $181 billion have been announced in the United States," writes DiChristopher. Appalachia saw $16 billion of that, but states such as Pennsylvania, Ohio, Kentucky and West Virginia could bring the region an even bigger slice of the pie.

Royal Dutch Shell will begin building a cracker plant next year along the Ohio River in Beaver County, Pennsylvania, next year. The project will create about 6,000 construction jobs and 600 permanent positions. A Thai petrochemical company, PTT, is considering building another such facility in economically distressed Belmont County, Ohio. 

Cracker plants are used because because plastic pellets are much easier to transport than raw petrochemicals, a critical factor since much of the output from cracker plants will be exported. But because of a lack of infrastructure, investors may be hesitant to locate crackers in much of Appalachia. The American Chemistry Council said that they're unsure how a transportation-and-storage hub in Appalachia could be created. "It's something of a chicken-and-egg situation: The region needs infrastructure to attract petrochemical facilities, but it's hard to get financing for infrastructure without the facilities," DiChristopher writes.

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