Meeting Minutes
Shell Ethane Cracker – Public Information Meeting
Central Valley HS – Monaca, PA
August 15, 2012
EKT Interactive representatives attended Shell’s public information meeting that Pittsburgh Regional Alliance (PRA) was coordinating at the Central Valley High School on August 15th. The auditorium has 400-500 seats but only about 100 people attended, the event was not well publicized.
Opening Remarks
Bill Flanagan was the MC for the event. Bill recapped the recent trip by a local delegation to Shell’s Cracker in Norco, LA and polyethylene plant in Geismar, LA about 50 miles away. The Norco Plant is about 90 years old, has 600 employees and is on a 1000 acre site. The Geismar Plant is about 45 years old, has 530 employees and is on an 800 acre site. Both facilities have additional permanent crews of subcontractors that handle much of the maintenance and small plant improvement projects. Shell has a similar plant in Thailand and Exxon Mobil has one in Singapore.
The PA Economy League is conducting a study to estimate the overall economic impact of the project on the local area. That study is due to be released later this year. (Study now available here.)
Dan Carlson’s Remarks
Dan Carlson is a Chemical Engineer who began his career with Shell 35 years ago and has been working in this cracker plant for the past 15 months. He still resides in Houston, but commutes to this area frequently.
The Horsehead facility in central Beaver County has been identified as a potential site for a new ethane cracker plant. The site is about 800 acres, but only about 300 are usable. The plant has excellent access with an interchange of I-376 less than a mile away, good rail access, and has extensive frontage on the Ohio River. N&W’s Conway Rail Yards (one of the largest in the country) is only a few miles away. The plant site is bordered by the Ohio River, a company-owned hillside, I-376, and a Nova Chemicals / BASF styrene plant.
Dan’s presentation included about 25 slides giving a layman’s overview of a typical ethane cracking process. Gas from Marcellus and Utica shale gas wells will enter a system of gathering lines and be sent to regional cryogenic separation plants where the methane will be separated from the heavier components. That ethane rich feedstock will be sent via pipeline to the new Monaca cracker. The plant consists of 3 departments:
- Thermal Cracking at about 1600 F and 20-25 psig
- Large compressors will compress the product to about 600 psig
- Distillation units operating at about -100F will separate the Ethylene from the hydrogen, methane, unreacted ethane, and heavier components.
Shell is also studying the possible addition of a polyethylene unit (producing small beads) and even an Ethylene Oxide unit that produces feed for a Mono-Ethylene Glycol unit. MEG is a feedstock for PET bottles, polyester fabrics, and glycol antifreeze.
Ethylene is world-wide commodity and its price is volatile, depending on the supply / demand balance. The Norco plant was shut down for 9 months in 2009 due to excess supply and low ethylene prices. Half of all the ethylene consumers in the US is within 500 miles of this plant site.
Shell is currently drilling exploratory wells for shale gas in Butler County, PA and working to determine the expected level of ethane that will be available from that source within a few years. It is likely that Shell will also buy ethane from other large gas producers in PA, OH and WV (Range, Consol, and EQT were mentioned).
Shell is looking at the logistics of building and staffing a plant of this size. The 400-600 workers needed for operating the plant should not be a problem in the large Pittsburgh metro area. The estimated 10,000 workers needed for 3 years will be an issue – where do they eat, sleep, park their cars, etc. Someone there from the Pittsburgh Airport wanted to discuss leasing Shell several thousand unused parking spaces at the airport and provide shuttle bus service to the site.
Q & A
What other local sites are available / were considered?
Jim Palmer of CED answered that Beaver County has identified 5 large brownfield sites that could be used for a major plant construction. In addition to Horsehead, we have the old J&L site in Aliquippa, the Crucible Steel Site in Midland, and several sites in the Beaver Falls area. CED has also identified several large greenfield sites that might be suitable for a major plant. All these are posted on the GIS tab on the county’s web site that is maintained by Michael Baker Corp.
How serious is Shell about this project?
If the project continues to move along without major roadblocks, Shell will spend several $ million on the project in 2012 and several $100 million on the project in 2013. There are currently about 50 shell employees working full time on the project, mostly at the Warrendale office but some telecommuting employees from other Shell locations worldwide. About 80% of Shell’s chemicals business is based on ethylene derivates. It is a serious business and this is a serious project.
How many gas wells will it take to support this facility?
The ethane content of shale gas varies greatly but Shell is estimating the need to process about 1 BCF of web gas per day from about 400 wells to provide the ethane needed by this plant.
Will the plant produce gasoline?
No.
What about the recently announced intention to convert Sunoco’s gasoline pipelines in PA into gas lines?
There are existing pipelines that could carry ethane either north to Canada, east to Philadelphia and NJ, or south to TX and LA. The cheapest place to produce ethylene is probably the Middle East; the 2nd best place is probably here in western PA where we are close to both supply and to customers. Transporting ethane to low labor cost countries like China then bringing the ethylene back is not economically viable.
What is the effect of PA’s Act 13 restrictions on the industry?
Those restrictions related mostly to drilling and fracking, a completely different process. Overall, Shell sees PA as a state as business friendly with a reasonable level environmental regulations.
What waste products will the plant produce?
In addition to ethylene, the plant will produce hydrogen, fuel gas (internal use?), ethane (recycled), propane, butane, and naphtha. All are commercial commodities with value and will be used either by Shell’s petrochem or refinery units or sold to others.
What types of air pollution controls will be used?
They will be state-of-the-art, best available technology but no specifics available yet.
What air and water permits will be needed to build and operate the plant?
Shell is talking to EPA and PA DEP about that, no details available yet.
What if something went wrong?
Shell is defining a “radius of concern”, doubts that any residential areas would be affected. Shell is always very concerned about being a good neighbor. One of the advantages of this site is that it is fairly isolated by the river, surrounding hills, and the adjacent Nova & BASF plants.
Is there any concern about the Shippingport nuclear plants being nearby?
No.
Are any state grants, loans, or subsidies being used for remediation of the site?
No – it will all be privately funded by Shell. (PRA added there is a conference Oct 29-31 in Monroeville about recycling brownfield sites and what types of financial and technical assistance are available for those sites, see http://www.eswp.com/brownfields .)
What skills will be needed by workers at the plant?
Shell is having discussions with CCBC, Geneva College and the local branch of Penn State about worker training programs. They are also talking to PA Career Link and local unions about possible apprentice programs but it is premature to begin any training programs now. They will need 3 types of workers:
- Management Team
- Operations – will probably need at least a high school diploma + related 2 year degree
- Maintenance – need several years of training and related experienceDennis Nichols added that the county is forming a county-wide training committee composed of representatives from most of these institutions.
How do I get a job there?
Operations positions are many years away. If Shell decides to proceed with the construction, they will hire an Engineering, Procurement, and Construction firm. This EPC will hire most of the craft people and local subcontractors needed to build the plant.
The PRA folks added that they have a web site www.powerofpittsburgh.com which is a searchable database of local jobs in the energy field within the 10 county SW PA region. The PRA also recently commissioned an occupational analysis that determined the most in-demand positions in the region. The job of petrochem engineer ranked 14th.
Items Shell is Studying to Determine whether to build the Cracker Plant
Below is a summary of the items Shell mentioned during the presentation that are being studied by the Ethane Cracker Project Team:
- Sources of ethane feed – Shell gas wells in Butler County + other E&P wells and separation plants • Feed pricing – what will be the market price for ethane in future years, can Shell be competitive?
- How to get the ethane feed to the cracker plant
- Will the purity of the ethane be adequate or will a feed separation unit be needed
- Plant size, operating conditions, equipment needed, capital cost for plant
- Equipment suppliers, transportation of large items to the site
- Physical plant layout, is the site large enough
- Just make ethylene or have additional production units – polyethylene, EO, etc.
- Possible partnerships with other local existing or proposed chemical plants – Nova, BASF, etc. • Transportation – can site handle expected volume of rail, pipeline, and highway
- Relationship with Horsehead – final price and conditions of sale, when will site be available • Construction schedule, how to select an EPC firm to build the plant
- Construction logistics – how to accommodate 10,000 workers for 3 years
- Customers for ethylene, how much will they buy at what price, how to get it there
- What to do with the by-products – hydrogen, propane, butane, naphtha, etc
- Plant operations – staffing, training
- Relationships with local subcontractors for the life of the plant, some to be located onsite • Extent of hazardous materials in soil on the existing site, how to remediate, time, cost
- Relationships with community and govt agencies
- Securing financing for this $2.0 – $2.5 billion investment
Attendees
PRA
• Bill Flanagan – EVP of Allegheny Conference, President of Pittsburgh C of C
• Dewitt Peart – President of PRA
• Patty Horvatich – VP of Business Investment for PRA
• Catherine DeLoughry – Director of Communications for PRA
• Brandon Mendoza – Govt Affairs Associate for PRA
Shell
• Dan Carlson – Gen Mgr – New Business Dev (Houston, TX)
• Asha Luthra, PhD – Social Performance Advisor (Warrendale, PA) • Shannon Debes – Community Liaison Officer
Beaver County Govt
• Tony Amadio – Chair of Board of Commissioners • Joe Spanik – Board of Commissioners
• Dennis Nichols – Board of Commissioners
• Jim Palmer – President of Corp for Econ Dev
Central Valley School District
• Dan Matsook – Superintendent
• Tom Mowad – President of School Board
Potter Twp Govt
• Rebecca Matsco – Vice Chair of Board of Supervisors • Earl Shamp – Member of Board of supervisors
PA Govt
• Jim Marshall – Member of PA House of Representatives, 14th District
Community College of Beaver County
• John Goberish – Dean of Continuing Education
Community Groups
• Sandy Curry – Franklin Center
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