Economic Development

Lawrence County Gets Set to Benefit from Shell Cracker

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NEW CASTLE, Pa. – Public officials, development specialists and businesses want to make sure Lawrence County is on the radar screen of any manufacturer or supplier that’s considering a home near Royal Dutch Shell’s $6 billion ethane cracker plant under construction in neighboring Beaver County.

“We are optimistic about the opportunities for Lawrence County that will result from the facility in Beaver County,” said Lawrence County Commissioner Dan Vogler.

Commissioners Vogler, Robert DelSignore Sr., and Stephen Craig joined business and civic leaders Tuesday to launch a marketing initiative that targets site selectors, brokers and companies related to the petrochemicals industry.

An open letter signed by 55 business and community leaders urges companies looking to relocate or build in the Appalachian Basin because of Shell’s ethane cracker to seriously consider Lawrence County for several reasons.

The most obvious reason is related to geography and highway access, Vogler said. The Shell project in Monaca is about 10 miles from the southern border of Lawrence County off Interstate 376, which runs south to Pittsburgh and north through the heart of Lawrence County, where it connects with Interstate 80.

“When you move north from that site into Lawrence County, you’re going to find opportunities that will be far less expensive than if you move in a southerly or easterly direction,” Vogler said. “It is cost-effective for a business to look in our direction because things are less expensive here. That will be true with business opportunities and housing opportunities.”

Kathryn Klaber, a member of the Lawrence County Shale Task Force, said her group examines not just the impact of oil and gas exploration in the county, but the economic potential of downstream development such as Shell’s ethane cracker as well.

Last June, Shell announced it would move ahead with its investment in the Monaca cracker, in part because it would sit atop the largest deposits of natural gas in the world – the Marcellus and Utica shale plays.

Cracker plants of this kind accept ethane – a wet gas found in the Marcellus and Utica shale plays in Ohio, Pennsylvania and West Virginia – from wells in the region. The plant then “cracks” the molecules into ethylene, then processes them into polyethylene pellets, which are used as a base ingredient for plastics and thus numerous commercial items.

Lawrence County has opportunities to attract new business in both the construction and operational phases of the Shell project, Klaber noted. “There are a lot of companies – some represented on the task force – that are already taking part in that construction phase – trucking companies, engineering firms, that kind of work,” she said.

It is estimated that 6,000 construction workers will build the plant. Preparation work is still underway and physical construction of the cracker isn’t scheduled to start until 2018.

While the Shell plant isn’t expected to become operational until the early 2020s, Klaber said decisions are being made about where to place the factories that would support or process plastic pellets the Shell plant manufactures.

“Proximity is huge,” Klaber said. “There’s also a lot more rail than I personally realized.”

Class I railroads such as CSX and Norfolk Southern serve the region, while the area boasts two Class II carriers – the New Castle Industrial Railroad and the Buffalo & Pittsburgh Railroad, a subsidiary of the Genesee & Wyoming, Klaber added.

The task force and development agencies also made it a priority to identify marketable, shovel-ready sites immediately available for development, said Linda Nitch, executive director of the Lawrence County Economic Development Corp. “We’ve gone out of our way to investigate 1,000 acres that we believe are shovel-ready for businesses to come locate here,” she said, “from the southern part of the county through the north.”

Above: Linda Nitch and Kathryn Klaber

All of the sites are accessible along the I-376 corridor and most are privately owned, Nitch said. Among the other infrastructure and service improvements is Pennsylvania American Water’s new eight-million-gallon treatment plant that will supply water to the southern portion of the county. “We’ve identified the fact that we have a lot of utilities and capacity,” she noted.

That project is significant, especially for plastics manufacturers, added Commissioner Craig. “It’s going to serve Elwood City and its surroundings and meet all the needs of plastics manufacturing,” which he noted is water-intensive.

Scott Wipke of RAR Engineering Group, one of the companies to sign the open letter and a member of the task force, reinforced that water is an important commodity when it comes to economic development. “We’re very blessed in this side of the country to have plenty of water available,” he said. “In the future, you’re going to see that our pipe capacity and water supply is very key to the development of this area.”

No companies have been identified as expressing interest, Nitch said, but she hopes the open letter will generate discussion as it makes its way to industry decision makers. “We’re going to be issuing it when we go to any and all conferences – such as plastics conferences and others,” she said. “We’re sharing it with the Pittsburgh Regional Alliance, the state of Pennsylvania’s Department of Community and Economic Development, as well as here locally.”

The three-page letter is likely to circulate among site selectors and brokers in Greater Cleveland and Greater Pittsburgh, possibly even Houston, the center of the country’s petrochemical industry, Nitch said.

And while the letter specifically addresses opportunities in Lawrence County, Vogler said officials here have joined in a regional approach to economic development. “This board of commissioners recognizes that the world does not end at our county borders,” he said. “We’ve made a conscientious effort to be involved with regional boards.”

In the end, the effort prepares Lawrence County for business related to the Shell cracker and the time to plan is now, Commissioner DelSignore said. “The time we’ve spent and the things we’ve learned is absolutely going to help us prepare ourselves for the coming of this cracker plant,” he said.

VIDEO:
“3 Minutes With” Linda Nitch, executive director of the Lawrence County Economic Development Corp.

Published by The Business Journal, Youngstown, Ohio.