Shell, a multibillion dollar petroleum company headquartered in the Netherlands, announced eight years ago the location of a new ethane cracker plant in Potter Township Pennsylvania, the site of what was previously the Horsehead Corporation and Koppers plants.

And right across the river from us.

The term “cracker plant” comes from the process of converting natural gas into plastic. The process starts by breaking ethane, a type of natural gas, into ethylene using extreme temperatures. Ethylene is then further processed into a resin used to produce small plastic beads. These beads then are shipped to other plants and used to make numerous types of plastic products.

Shell announced the location in May of 2012 after Ohio, Pennsylvania, and West Virginia competed for the plant. Each state hoped that acquiring the plant would bring widespread economic prosperity to their communities.

Economic Concerns

Upon announcement of the plant, Shell promised numerous new jobs for the surrounding community. While initially the plant will require 6000 construction workers, upon completion only 600 full time positions will be filled. Some are worried that such a sudden expansion and subsequent decrease of jobs will provide false economic hope that will only benefit a select few in the end.

Additionally, while Shell promises these jobs will provide work to the community, some are concerned that many positions are being filled by transplants—workers hired from across the country to fill skilled trade jobs—and not locals. (It’s not hard to notice the profusion of Texas and other out-of-state license plates on the roads these days.)

Shell also is targeting other areas within the rust belt including counties in Ohio and West Virginia. The company is using similar tactics in these regions by selling a new plant to local governments on the promise of economic improvement. Shell promises that constructing more cracker plants within these communities will bring much needed economic prosperity to what was once the country’s great steel region.

There is data to back this up as “real mean earnings” within the cracker plant vicinity often increase by $5,627 according to research from Washington and Jefferson University. This increase, however, is often only temporary as salaries are likely to fall back to standard levels only a few years after a new plant opens.

Aside from potential changes to the job market, there are concerns surrounding the deal cut between Pennsylvania and Shell during plant location negotiations. In order to incentivize Shell, Pennsylvania offered the company a 20% tax reduction for 25 years, saving Shell around $1.65 billion and making it one of the largest tax incentives in Pennsylvania history according to a 2019 New York Times article.

Although Shell promises to invest $1 billion back into the Pennsylvania economy, doing so does little to provide for the main need of the community: taxes. By taking the tax break, Shell subsequently forces the tax load onto those in the surrounding communities and avoids taxes easily payable for a multibillion dollar company.

Since the Horsehead plant previously paid taxes on what is now Shell property, the new tax break will cause “Central Valley School District to lose $275,000 in property taxes” and Potter Township about “$40,000 in property tax revenue,” about 7% of their annual budget according to a 2012 study conducted by NPR.

Environmental Concerns

The plant poses numerous environmental concerns regarding both the plastics being produced by the plant and the natural gas used in production.

For years, natural gas prices have been on the decline due to an abundance of the natural resource. As a result, gas companies such as Shell have been looking for alternative ways to use the gas. This need was subsequently filled by cracker plants.

Construction of cracker plants in the U.S. boosted the natural gas industry. This rise led to an increase in the amount of natural gas extraction taking place in Western Pennsylvania and subsequently led to a variety of environmental concerns.

According to a Yale study, Pittsburgh has enjoyed improved air quality over the past few decades. However, the city still fails to meet federal air quality standards that limit the amount of fine particulate matter and sulfur dioxide allowed within the air systems.

An article published by alleghenyfront.org points to research conducted by Jim Fabisiak, a health professor at the University of Pittsburgh. In his research, Fabisiak notes the improvements seen in recent decades. However, he does have concerns with the construction of the cracker plant. Starting in 2016, the year construction began on the plant, an upward trend has been seen in the amount of particulate matter in the air. Such research puts continued pressure on Shell as surrounding communities are beginning to worry about the quality of air they are breathing.

The plant also possesses a second environmental concern: the plastic pellets it produces. These pellets are shipped to factories across the country to be made into shopping bags, clothes, and countless other plastic products. After use, however, these various products play a substantial role in today’s environmental issues due to the non-compostable nature of plastics.

Despite these issues, however, Shell is a prominent advocate for plastic usage due to their economic prosperity in the market. To cover up their part in potential environmental ruin, Shell claims that, although plastics pose a potential environmental risk, much of it is recycled after use. This notion is debunked, however, by a government funded study that concludes only 8.4% of plastic products are ever recycled.

What’s Next?

The cracker plant is expected to produce a million tons of plastic pellets per year upon completion in the early 2020s.

Already, construction is beginning to wrap up as temporary construction workers and supervisors are being laid off and permanent positions are being filled.

Shell expects a massive growth in the petrochemical industry and foresees opening up numerous other operations in the coming years. Only time will tell if this growth is an economic blessing or an environmental curse.