Guarded Optimism Expressed For Cracker Plant

It’s been called a “game changer” as far as employment is considered, and an announcement made by Ohio Gov. John Kasich at the beginning of September has made many in this Upper Ohio Valley feel optimistic about a future in the petrochemical industry.

But no one is counting chickens just yet.

Kasich joined local lawmakers and officials from PTT Global Chemical of Thailand, a giant chemical and fuel-refining company, and Marubeni Corp. of Japan, in Columbus to announce that the partners agreed to conduct a $150 million design and engineering study to test the viability of a 500-acre riverfront stretch of land for a full-sized, $5 billion cracker plant. Such a facility takes ethane harvested by natural gas companies and breaks it down into a substance that can be used to make chemicals and plastics.

Ohio Sen. Lou Gentile
Ohio Sen. Lou Gentile

The deal, however, will not be finalized until sometime next year, according to Ohio Sen. Lou Gentile (D-30th).

“It was certainly very exciting news that we received during the first week of September when I joined many state and local officials in Columbus, and that excitement has continued ever since,” said Gentile. “I’ve been making the case that this will have a regional impact to not only Belmont County but to the people living in all of the surrounding counties on both sides of the river. We’re talking about a project that will need a lot of people to build it and then operate it.

“When you are talking about a $6 billion investment, you are talking about thousands of construction jobs and hundreds of permanent jobs, and those are good-paying petrochemical jobs,” he continued. “That’s what many grew used to in this valley with the steel industry, and these are the kinds of jobs that I’ve been working very hard to bring to this area because people want the opportunity to stay here and raise their families here.”

Gentile is optimistic, though, and he is confident the construction of such a facility would spark the birth of the region’s next big industry.

Large swaths of land similar to what is available in Belmont County are what is needed for such a facility.
Large swaths of land similar to what is available in Belmont County are what is needed for such a facility.

“This cracker plant could be the anchor tenant of a much larger petrochemical industry because there are many ancillary businesses that usually follow a development like this one, and they need to be close to that anchor for obvious reasons,” the senator said. “This could be groundbreaking in many ways in this region as a whole, and I believe it’s important that we all work together to get ready for this because this could be the most important development not only in Ohio but in the entire Midwest.

“This is big news in the East Ohio region, and even some of the biggest in the state of Ohio in the last decade or so,” the lawmaker continued. “That’s why this would have a huge, regional impact, and it offers the chance that this Upper Ohio Valley could become the location of a very successful petrochemical industry.”

But this is not the first time the Dilles Bottom site in Belmont County has been discussed as the location for such a facility. Belmont County was in the running for the construction of a cracker plant by Royal Dutch Shell in 2012, but Beaver County in Pennsylvania was chosen as the locale. The Dilles Bottom site would include more than 500 acres, including the 160-acre parcel owned by First Energy.

“You do not announce something of this scale, though, if you don’t intend to do something,” Gentile said. “However, it has been emphasized to me by Jobs Ohio officials that they still have to conduct this 14-month design and engineering study to see if Belmont County is truly a viable location for this project. That process is imperative, so until that work is done we won’t know for sure. But we’re all very optimistic in Columbus based on the news we have heard thus far.

Cracker plants takes ethane harvested by natural gas companies and breaks it down into a substance that can be used to make chemicals and plastics.
Cracker plants take ethane harvested by natural gas companies and breaks it down into a substance that can be used to make chemicals and plastics.

“We need to have a united front to make this happen, and while we lawmakers may have disagreements about things like the budget and how to fund public education, we all work very hard to recruit good-paying jobs for our constituents,” he said. “That’s why I believe there will be a level of cooperation on this unlike what you have seen for a long time in Columbus.

“Right now, things are moving in the right direction, but it will take some time to see what happens with the engineering and design study, but I am certainly very encouraged and optimistic about the news thus far. I feel very good about this.”

Another reason Gentile, who serves a district that stretches from Carrol County to Meigs County, is hopeful this development will come to fruition involves the timing of the announcement.

“These company officials traveled to Belmont County and then to Columbus to make this announcement at a time when the market for natural gas is down,” he explained. “The fact this announcement was still made is very encouraging to me about the future of this project and for the future of the gas and oil industries here in the Upper Ohio Valley.

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“To me, that’s a strong sign. Our area has seen a lot less drilling activity over the past year because of the decrease in the price, but it’s also obvious that there is an abundance of those resources here. That makes this announcement very significant for the future,” Gentile continued. “The issues in Columbus involve how we handle this development from a tax perspective, from a reinvestment perspective, and from the severance tax perspective. At the end of September we’re expecting the Ohio Senate to unveil its plan for the future severance taxes on gas and oil, and my hope is that they are able to strike a balance with the proposal.”

Ohio County Commissioner Orphy Klempa studied the cracker plant industry while a member of the West Virginia Senate, so he is very aware what such a development could mean for the Upper Ohio Valley region. He remains optimistic, but at the same time he plans to wait until the groundbreaking ceremony before he celebrates.

Cracker plants come in all shapes and sizes.
Cracker plants come in all shapes and sizes.

“I’m a big believer that such a development will help all of us, so hopefully it’s something that does happen here,” Klempa said. “But what concerns me are the things they are turning dirt for now that leads to these companies taking all the gas away from this area. There are huge pipelines under construction right now, and those pipelines will take the gas away from here.

“We’ve had five or six cracker announcements since we all heard about the Marcellus and Utica shale plays, and not one shovel of dirt has turned over to build one,” he reported. “You can drive along almost any road in Ohio, Marshall, and Wetzel counties, and you can see these huge pipelines being put into the ground, and they plan to put something in those pipelines. Unfortunately, there are six crackers under construction along the Gulf Coast as we speak. Six of them. So that’s my fear. I go to Mass every Sunday, and I pray for my friends in Belmont County that Dilles Bottom gets this cracker plant, but until that first shovel hits the dirt, we won’t know for sure.”

Klempa’s optimism was in full throttle for the Parkersburg area when serving as a state lawmaker, but despite the passing of a “Cracker Bill” by the state legislature that featured enormous tax breaks to the developer, the site remains vacant today.

“I was pretty excited about the chance for Parkersburg in Wood County because I believed it would employ construction works from around the entire state, and I thought we crafted a pretty good deal,” he said. “Building a facility like that would not only employee the existing workforce, but it also would create an avenue for construction workers in the future. But that legislation was when Shell was looking at that location, and since then we have heard nothing new about that possibility for a long time.”

W.Va. Del. Shawn Fluharty (D-3rd) joined Klempa with guarded optimism concerning the Belmont County announcement and the possibilities that still exist within the Mountain State.

“Wood County, from what I understand, remains on the short list for a facility similar to what has been announced for Belmont County, and I know those conversations are continuing in Charleston, “Fluharty confirmed. “From what I understand, cracker plants come in all shapes and sizes, and the one that is possible in the Parkersburg area is pretty similar to the model that’s been proposed for Belmont County.

“I’m happy that this development could create a lot of job opportunities in the Northern Panhandle of West Virginia, that’s for sure. More jobs – that’s always one of my goals,” the lawmaker continued. “We always want the type of living-wage jobs that allow for families in this region to remain in this area while raising their families. From what I understand about this project and this plant is that it will offer the kinds of positions that will increase the quality of life in this region.

“As far as Wood County, though, there’s no new information that I can share at this time about that proposal other than everyone I’ve spoken to is very optimistic. Right now, let’s hope this comes true in Belmont County so we can see employment opportunities increase in this area. That’s what this region needs, and I believe we’ll be ready for it if these companies make the decision to construct such a facility in East Ohio.”

Ohio County Commissioner Orphy Klempa is concerned with the distribution of the natural gas and oil being harvested now in the Upper Ohio Valley.
Ohio County Commissioner Orphy Klempa is concerned with the distribution of the natural gas and oil being harvested now in the Upper Ohio Valley.

Klempa, too, can imagine the positive impacts.

“It could provide a huge boost to this region because, let’s face it, the Ohio River is no longer a barrier like it used to be,” he said. “In my career (as a carpenter and union representative) I spent a lot of time working in Belmont County, and a lot of my friends and family from Belmont County have spent a lot of time working here in Ohio County. We share an economy.

“A development like a cracker plant is not just about Belmont and Ohio counties. It’s much larger than that because people from Brooke, Hancock, Jefferson, and Monroe counties will have a chance to help build it and work there once it’s open,” Klempa added. “So let’s just hope the design and engineering phase goes well and the decision is made to locate here. That’s when the corks can pop.”