Shale Daily / NGI All News Access

Shell Exec: Decision on Pennsylvania Cracker 18-24 Months Away

Royal Dutch Shell plc will decide within the next 18 to 24 months whether to build an ethane cracker in Beaver County, PA, according to a company executive.

Meanwhile, Pennsylvania officials blasted a media report that said the state would pay for remediation of the 300-acre site near Monaca that Shell Chemical LP has signed an option to purchase and would presumably use to build a "world-scale" facility (see Shale Daily, March 16).

According to a blog report for the Pittsburgh Business Times, Shell Appalachia Development Manager Sylvie Tran told attendees at a roundtable discussion at the Duquesne Club on Thursday that the company was still trying to determine whether an ethane cracker in western Pennsylvania was economically viable, but she indicated that the project was moving forward.

"We're starting to build our contractor base in the west side of the state where we think much of the opportunity will be," Tran said, later adding that she thought it was "important to think about the commodity business as a cycle and to build your business model to weather the down times."

In a joint statement issued on Saturday, Michael Krancer and Alan Walker -- secretaries of the state Department of Environmental Protection (DEP) and the Department of Community and Economic Development (DCED), respectively -- said a report by the Harrisburg-based news service Capitolwire that the state would pay to clean up the Monaca site was false.

"To address any concerns with potential environmental liability, we highlighted the Act 2, Land Recycling Program as a resource that Shell could look into," Walker said. "Act 2 has been a tremendous economic development tool that has helped to remediate hundreds of brownfield sites throughout the Commonwealth for reuse."

Krancer concurred. "Act 2 merely provides remediation standards for cleanup of contaminated soil and groundwater," he said. "If the standards are met, DEP grants the landowner relief of liability for the contamination they have demonstrated they've cleaned up. The private parties involved in any potential transfer or sale of land, not Act 2, determine who would pay for the cost of the cleanup."

The site, which straddles Center and Potter townships, is currently owned by Horsehead Holding Corp., a zinc producer.

"Act 2 is not a funding program," Krancer said. "But it would provide the clarity on the remediation necessary to transform an abandoned site with legacy environmental challenges into a new productive site, addressing and erasing those legacy environmental issues."

Pennsylvania Gov. Tom Corbett is reportedly seeking up to $1.675 billion in tax credits over the next 25 years for Shell and other companies willing to locate an ethane cracker in the state (see Shale Daily, June 6). An official with the DCED said discussions were continuing between the Corbett administration and lawmakers over the governor's proposal to extend up to $66 million in annual tax credits starting in 2017.

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