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Jobs Impact of Cracker Facility Likely Exaggerated

This past January, when Ohio was still in the midst of the bidding war for the proposed cracker facility, Toledoans saw the following blurb in their paper, the Toledo Blade:

Gov. John Kasich is pursuing the multibillion-dollar ethane-cracker facility that Shell Chemicals LP plans to build in Ohio, West Virginia, or Pennsylvania to capitalize on the increasing harvest of natural gas from Marcellus shale. The American Chemistry Council estimates that the plant would generate 17,000 jobs in chemistry and other industries as well as $1 billion in wages and $169 million in tax revenue.

That’s some financial impact, right?  And now we are hearing the same figure coming out of Harrisburg via the Post-Gazette:

Estimates from the American Chemical Council have projected that a $3.2 billion ethane-processing facility, similar to the one that Shell is considering for Beaver County, would create more than 17,000 new jobs at the plant itself and among spinoff businesses along the supply chain.

Too bad it is isn’t very realistic.

Although the planned Monaca plant is one of several new cracker facilities planned in North America, currently, there are just a handful on the continent. In January, I posted about one of them, a Shell facility in Norco, Louisiana.  On their website, the multinational giant proudly proclaims the following, in bold type:

Shell Chemicals’ Norco facility is located in St. Charles Parish. The facility has over 600 full-time employees, more than 160 contractors, and generates an annual payroll of $50 million. The company pays more than $16 million in state and local taxes and $6M is property taxes that help fund public education as well as police and fire departments.

As I mentioned five months ago, those are significant contributions, to be sure. But it is a far cry from the projections of the American Chemistry Counsel (ACC) state above.  Shell also operates another cracker in Deer Park, Texas, which claims:

Shell Deer Park is a 1,500-acre complex located in Deer Park, Texas, approximately 20 miles east of downtown Houston along the Houston Ship Channel. Founded in 1929, Shell Deer Park is now home to 1,700 employees who operate a fully integrated refinery and petrochemical facility 24 hours a day.

That’s a lot of jobs, but as an integrated facility, it already accounts for some of the “spinoff businesses along the supply chain”.

Nova Chemicals operates another cracker in Sarnia, Onterio, which according to their website employs about 900 people who earn an estimated $86 million in wages and benefits each year.

So how silly is the claim of 17,000 jobs and $1 billion in wages? Consider that with all of its existing crackers and other facilities,

Shell chemicals companies staff total 8,500 worldwide. The majority of these support our manufacturing operations.  This does not include joint venture employees.”

Even with the JV employees not being counted, we are talking about major petrochemical plants in nine locations around the world, plus three technology centers.  So just who are these experts at the ACC who keep getting quoted for the 17,000 job figure? According to website:

The American Chemistry Council’s (ACC’s) mission is to deliver business value through exceptional advocacy using best-in-class member performance, political engagement, communications and scientific research.

Well played, ACC.  You have put on a best-in-class performance with your exceptional advocacy.  But for the rest of us, it is time to start considering more realistic jobs numbers when talking about the proposed ethylene producing facility.

Shale gas plays with Utica in blue

Stepping into the Utica Shale

By Samantha Malone, MPH, CPH

I recently had the honor of presenting to a well-informed and concerned audience of residents, media, academics, non-profits, and industry personnel in the town of Alliance in Northeastern Ohio. The reason I was asked to participate in this public meeting was to provide some insight into how drilling has progressed in Pennsylvania from a public health perspective. While Ohio doesn’t really have much Marcellus Shale activity, the industry has been ramping up their efforts in the Utica Shale, which is situated approximately 6,500 feet beneath Alliance and below the Marcellus formation. See the map below of all known U.S. shale plays; the Utica has been shaded blue.

Shale gas plays with Utica in blue

Shale gas plays in continental U.S., with Utica in blue

Also on the agenda that evening were two experts in their fields: Dr. Jeffrey Dick, Chair of the Geology and Environmental Science department at Youngstown State University, who spoke about the hydraulic fracturing process and the available research regarding its impacts from a geological and hydrological perspective; and Dr. Theodore Voneida, professor emeritus of Neurobiology at Northeastern Ohio Universities College of Medicine, who discussed medical concerns with a very moving talk and follow-up video.

The event began as expected – with an air of fear present as to what this consortium of speakers would say about such a potential money-maker for certain mineral rights owners and the local economy. What surprised me by the end of the presentations was the intuitive discussion among residents and attendees of their experiences with the industry and landsmen. (Landsmen are the personnel hired by the gas drilling companies to persuade mineral rights owners to lease their property for natural gas extraction purposes. Historically, there have been many complaints raised about the transparency of the process and the unscrupulous nature of these contracted employees.) Alliance’s residents reported similar experiences. Some were told, “all of your neighbors have leased, so we’ll get the gas out one way or another.” When, in fact, those neighbors (also present at the meeting) had not signed, but were given the same spiel about why they should lease their mineral rights to one company in particular.

The most unfortunate part about witnessing this discussion was the realization that I had heard it all before: in 2009 and 2010 when drilling activity intensified in PA and WV. In fact, residents’ concerns and frustrations were significant driving forces behind the development of FracTracker. People craved access to easy to understand and transparent information about the pace of lease, drilling, and its associated risks. I truly hope that we’ve begun to provide what is needed to make well-informed decisions about natural gas drilling since that time.

Shale gas drilling activity is increasing quickly in Ohio. According to Dr. Dick, there were six drilling rigs working the region in November 2011. By late February 2012, 18 rigs were at work and 76 wells have been permitted. At least 10 different companies are aiming to exploit the Utica Shale in 18 counties of Eastern Ohio. With no end to this surge in site, FracTracker will strive to respond with an increase in Ohio data sets, snapshots, and stories that will keep everyone better informed.

Additional Resources:


Author Information:
Samantha Malone, MPH, CPH — Communications Specialist, FracTracker; Doctorate of Public Health Student, University of Pittsburgh Graduate School of Public Health, Environmental and Occupational Health Department. Samantha can be reached by email: malone@fractracker.org or phone: 412-648-8541.

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