Plastics Mfg Pitched For Years As "Solution" To Appalachia Fracked Gas Glut ; Now, Factories Closing, Oil Majors Leaving

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The settlement and potential sale come as the petrochemical industry — makers of chemicals such as plastic and styrofoam that are derived from fossil fuels — is undergoing a reckoning. Throughout the 2010s, plastics were pitched as an answer for the glut of natural gas in Appalachia. Today, the industry is showing signs that such predictions were overblown. Many fossil fuel companies are now selling off or restructuring their plastic and chemical assets altogether — oil giants Occidental Petroleum and BP among them.

As Clark and his colleagues were negotiating the settlement, leaders at oil titan Shell began reconsidering their role in a $14 billion, 384-acre plastic materials production plant not far from Styropek. As an enticement, Shell was offered $1.65 billion in tax credits over 25 years, the largest subsidy in state history. Known as an ethane cracker, the facility “cracks” wet molecules of ethane, a fracking byproduct, into dry polyethylene nurdles. Those nurdles are then used to make food packaging, toys, waste bags, and even chewing gum. It came online in 2022. The facility was once envisioned as being part of a large plastics hub in Appalachia that would help usher in a “petrochemical renaissance” that would bring prosperity and jobs to the area.

“The Appalachian region could become a second center of U.S. petrochemical and plastic resin manufacturing,” the American Chemistry Council, a trade group for petrochemical companies, wrote in 2017, referring to the Gulf Coast as the first. State politicians leaned into a similar narrative. “The Shell project would be the largest economic development project in southwestern Pennsylvania in more than a decade,” reads a 2013 document shared by Pennsylvania state Senate Republicans. The origin and author of the document is unclear.

The argument was used to justify historic levels of spending on tax incentives used by Shell. At the time, critics pointed out that a key subsidy written for Shell did not come with any requirements that the company create long-term jobs or provide economic development in order to claim the credits. Early visions of a booming plastics hub never came to fruition and Shell’s is the lone facility left standing. After just over three years in operation, Shell is now looking to sell its plant, the Wall Street Journal reported in March.

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https://capitalandmain.com/pennsylvania-spent-big-on-a-petrochemical-renaissance-it-never-arrived