Lawrence County Positioned for Cracker’s Impact

NEW CASTLE, Pa. – Businesses in Lawrence County could benefit from perhaps four ethane cracker plants that could be built in the western Pennsylvania-eastern Ohio region, Lawrence County business leaders learned Thursday.

Kathryn Klaber, founder The Klaber Group and former CEO of the Marcellus Shale Coalition, addressed the Lawrence County Economic Development Corp.’s 2016 Impact Awards luncheon at the New Castle Country Club. She provided an update on her company’s work with the local task force  formed following Royal Dutch Shell’s announcement that it would build an ethane cracker in neighboring Beaver County.

The task force – made up of a dozen local leaders with perspectives ranging from engineering and real estate to transportation and infrastructure, as well as local government representation — is meeting monthly to craft an implementation plan to capitalize on the economic opportunity, Klaber said.

“The cracker plant is still in its pre-construction phase and there are a lot of decisions being made right now about contracting and subcontracting,” she explained. “Clearly Shell is doing a lot of that on their own, but the question is what are other assets related to the supply chain, and that’s where Lawrence County has some real opportunity.”

The task force is focusing on assets to be touted as well as potential hurdles, including infrastructure gaps that may need to be filled, she said. Assets include abundant available sites, redundancies in terms of transportation, including rail access, water and sewer infrastructure upgrades and a “willing and motivated workforce,” she said.

One potential challenge that’s been identified is a risk of higher tolls on Interstate 376, which could discourage “what could otherwise be incredibly easy travel north from Beaver County into Lawrence County,” she cautioned.

“The opportunities are clear that Lawrence County sits in a great position relative to shale development and the downstream petrochemical industry that’s burgeoning here,” Klaber said.

The first shale gas well was drilled in Washington County a decade ago, launching what Klaber described as the North America’s largest natural gas play, the Marcellus shale. At the time, Pennsylvania imported three-fourths of the natural gas it used. Now the commonwealth is second only to Texas in natural gas production.

Along with that natural gas production comes natural gas liquids, including ethane, which can be converted to ethylene and then polyethylene, a raw material for the plastics, petrochemical and other industries. Because of costs, ethylene is replacing oil-based products in plastics, Klaber said.

“The vast majority of North American ethane production is located on the Gulf Coast,” although the nearest plant to Lawrence County is in Ontario, Canada, she said. “Now we are finding ourselves right here with our own nascent petrochemical industry.”

Among the plants in development in the tri-state area in addition to Shell’s project is one that should be announced “relatively soon,” PTT’s proposed ethane cracker in Belmont County, Ohio, Klaber said. Others include a back-burnered project near Parkersburg, W.Va., that could again become viable as well as other small projects mentioned over the years.

Linda Nitch, executive director of the Lawrence County Economic Development Corp., said her agency is working to maximize the county’s potential. “We recognize that we’re sitting on the edge of what could be the biggest boom in economic development in our community for the last 35 to 40 years,” she said.

During the luncheon, the development agency recognized five companies with Impact Awards: Castle Mold and Tool Inc., New Castle; Dairy Farmers of America, New Wilmington; Nick’s Auto Body, New Castle; Pennsylvania Power Co., an affiliate of FirstEnergy Corp.; and Posies by Patti, Ellwood City.

Castle Mold, which has 25 employees, has been investing in research and development through 3-D modeling software, Nitch said.

The company primarily manufactures plastic injection blow molds used to make rigid containers like bottles for dairy products, said its president, Joe Smarrelli Jr. It also does restoration work to put molds back in service and “general job shop manufacturing,” he said.

Dairy Farmers of America recently completed a $35 million expansion of its cheese-processing plant, plant manager Tim Sallmen said. The plant, which has operated since 1950 and has about 220 employees, ran at full capacity during the three-year project, he reported.

Nick’s Auto Body renovated the old Cally Club on the south side of New Castle as an annex to its South Mill Street shop, a $400,000 investment, Nitch said.

The collision shop opened in 1960, said Shane Caldararo, general manager. In recent years, the business added auto glass repair, vehicle rental and towing, he said.

Penn Power, which serves customers in Lawrence, Mercer and Crawford counties as well as parts of Beaver and Butler counties, is upgrading transmission lines to improve reliability, including a new $13 million line that connects substations in New Castle and Neshannock Township.

“We can loop feed that,” Charles Jackson, area manager, said. “If we lose one of the transmission lines we can loop it back through the other line and customers will only see a blink in their lights instead of hours of outages.”

Posies by Patti is completing a $100,000 investment in a new location that is opening soon, reported Patricia Kuhn, president.

“We’ve grown a lot over the last 15 years, and we are doing work everywhere from Erie to West Virginia,” she said. Much of the out-of-town work is for weddings, Kuhn noted.

The new location will be “spectacular,” she promised.

Pictured: Kathryn Klaber, luncheon speaker, and Linda Nitch, executive director of the Lawrence County Economic Development Corp.

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