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Planned petrochemical plant boosts beleaguered Pennsylvania

Hydrocarbon Engineering,

The US state of Pennsylvania had been facing a rocky economic future following the recent and planned closure of a number of refineries. However, the region has been given a significant boost as Shell announced its plans to construct a new petrochemical refinery near Pittsburgh.

The recent closure of ConocoPhillips’ Trainer refinery, as well as that of Sunoco Inc.’s refineries in Philadelphia and Marcus Hook could cost more than 36,000 jobs and reduce state and local tax revenue by US$ 566.3 million, according to a report from the Pennsylvania Department of Labor and Industry.

Furthermore, the closings could reduce the economic output of southeastern Pennsylvania by nearly US$ 27.9 billion and deprive the region of over US$ 622 million in labour income, according to calculations in the report.

Philadelphia based Sunoco recently closed its refinery in Marcus Hook and will close its refinery in Philadelphia by July if it fails to find a buyer before then. This, combined with Houston-based ConocoPhillips’ decision to close its refinery in Trainer, could heavily impact the state.

However, the numbers are worst case scenarios, essentially detailing what would happen if the refineries closed and remained closed, and none of the people that work at them managed to find jobs elsewhere.

The report puts the estimated direct job loss from the closing of the refineries at 1000, but the Department of Labor and Industry estimates that the refineries actually employ approximately 2000.

However, Shell Oil Co. has chosen a site near Pittsburgh for a major, multi billion dollar petrochemical refinery that could create thousands of construction jobs and provide a huge economic boost to the besieged state.

The company has reportedly signed a land option agreement with Horsehead Corp. to evaluate a site near Monaca, approximately 35 miles northwest of Pittsburgh. The final complex could cover several hundred acres when completed.

The ethane cracker, plant would convert ethane from bountiful Marcellus Shale natural gas liquids into more profitable chemicals such as ethylene, which are then used to produce a wide variety of products.

Ohio, West Virginia and Pennsylvania had all sought the plant and offered Shell major tax incentives. Monaca is approximately 15 miles from both the Ohio and West Virginia borders, meaning that workers in all three states are likely to benefit.

Shell has said that it could spend several billion dollars to build the plant, and that the complex would attract a wide range of industry and suppliers to nearby locations. The downside is that actual construction is still years away. The company said the next steps are environmental and design studies and further economic analysis, then permits.

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