Letter to Governors Questions Economic Impact of Cracker Plants
WHEELING — The prospect of a petrochemical buildout in the Ohio River Valley was already a divisive issue. It was ballyhooed by some as an economic generator and decried by others for greenhouse gas emissions.
That scenario became a bit more polarizing Monday when it got a resounding thumb’s down on economics.
Lacking a formal name but not a purpose, a group of economists and engineers sent letters to the governors of Pennsylvania (Tom Wolf), West Virginia (Jim Justice) and Ohio (Mike DeWine). Organizers, according to an emailed news release, said Monday the tri-state region is “not likely” to experience a major buildout or “the kind of job creation that some predict.”
The letter was cobbled together by eight college-affiliated economists and engineers and John Hanger, former head of the state Department of Environmental Protection. The missive also was distributed to the media, and it begins: “In Ohio, Pennsylvania and West Virginia, our goals for economic growth and job creation are being undermined by the mistaken belief that the region’s petrochemical and plastics manufacturing industries are poised to greatly expand and, in the process, generate large numbers of new jobs.
“In fact, no such expansion and jobs boom is likely. And, unless we adopt new and better development strategies, we risk squandering hundreds of millions of dollars in public funds in pursuit of a vision that will not materialize.”
Construction of an ethane cracker plant is well underway in Potter Township, Beaver County, Pa., a facility Shell Chemical Appalachia is erecting along the Ohio River. Production resumed six weeks ago following a shutdown due to the COVID-19 pandemic.
Two other petrochemical complexes had been discussed for the valley, until the ASCENT project in Wood County, W.Va., was canceled last summer. PTT-DLM still plans to build a cracker in Dilles Bottom, Ohio, but that endeavor is on hold after the company postponed a final investment decision.
Sean O’Leary, a Wheeling native, organized the letter campaign. He describes himself “as an energy analyst type of guy” who has a keen interest in this.
“You have folks who say this is an immense jobs creator and you have the opposing environmental perspective,” he said. “What’s left out is the fact that economics don’t support this. Even if jobs and economic growth were the objective, this is not the way to go there.
“It’s extremely unlikely we’d see the job growth proclaimed by (petrochemical) proponents. We had the sense that anyone who looked at the numbers would come to this conclusion.”
Hanger, the former DEP secretary and current national energy analyst, said in a statement: “Claims that the petrochemical industry will revitalize Western Pennsylvania and its neighbors give people false hope that cruelly build only disappointment and frustration. Fortunately, there is powerful economic development alternative: retrofitting buildings for energy efficiency, building electric vehicles and their parts, as well as manufacturing and installing wind, solar and battery storage.”
James Van Nostrand, director of the Center for Energy and Sustainable Development at West Virginia University’s College of Law, also weighed in. The professor said: “It’s time for the region to stop staking its future on fossil fuels, which has no future.
“The fastest growing sector of the economy is clean energy – energy efficiency and renewables. The region’s efforts are better directed toward establishing policies that attract clean energy investments as well as the large employers who increasingly demand renewable sources of electricity for their energy needs.”
Petrochemical has its supporters as well.
Mike Chadsey, director of public relations with the Ohio Oil and Gas Association, called it a “one-sided” and short-sighted view as the price of plastics are expected to increase in the future.
“We disagree with that letter,” Chadsey said. “It’s clear that the folks who wrote the letter don’t really understand the oil and gas industry, surely don’t understand the petrochemical industry. They don’t understand prices and the long-term view of the industry.
Dan Williamson, a spokesman for PTT-DLM, said in a statement: “The proposed petrochemical complex (in Belmont County) would be a multibillion-dollar investment that would yield a positive economic impact for generations to come. The project is supported by trade unions, economic development advocates and elected officials from both political parties.”
Tom Westfall, president of the West Virginia Oil and Natural Gas Association, said in a statement: “Natural gas is clean-burning, cost effective and dependable. Its byproducts are critical to everyday life. The industry employs thousands, and its economic impact is huge. Growing the industry means growing the region’s future and moving toward sustained prosperity.
“That includes expanding the petrochemical industry in this region. Cracker plants would bring much needed jobs and tax revenue, and those plants would use our product. We’re natural partners. The economic multipliers would be significant.”