Shell's Beaver County ethane cracker plant will leverage resources already here to create a byproduct, “cracking” ethane into ethylene. After waiting for the official announcement of this project for years, the approved start of the cracker finally has come to fruition.
Here's what the Shell ethane cracker means for Western Pennsylvania:
• More well-paying jobs. When the shale industry took off in this region, jobs were plentiful. When the American shale revolution took a nose dive in 2014, the industry went lean. It was a tough time for many. Shell's cracker will re-energize this industry and put people back to work. Shale will make a quicker comeback because of this project.
• Moving gas, lifting supply. As mentioned above, oil and natural gas prices tanked in 2014 due to oversupply and an unanticipated decrease in demand. Pipelines are scarce and gas isn't being moved quick enough. Markets are hungry for gas and midstream is playing catch-up with upstream. Shell's cracker will alleviate some of this stagnant pipeline growth. With the combination of cranking pipelines online and Shell's cracker, Western Pennsylvania is poised to dominate the shale industry.
• Creating long-term growth and sustainability. If Shell is investing close to $6 billion on this project, you know shale is here to stay.
• Sticking it to OPEC. OPEC flooded the market with oil, creating a whirlwind that shook the industry. Part of OPEC's plan worked and many operators and service companies have filed for bankruptcy. But this plan will not be sustainable for much longer. Much of the countries in the cartel are struggling to survive. There is speculation Saudi Arabia and others will choke back. Regardless, Shell's ethane cracker will depressurize the current situation and hopefully create an uptick in American shale.
By this point, OPEC needs to realize that unconventional American shale is not going anywhere. We're staying put and our boots will stick here in Western Pennsylvania.
ADAM LARSON
BETHEL PARK
The writer is president of the Society of Petroleum Engineers at Penn State University and a junior petroleum and gas student.
