Daelim Chemical USA, a major investment partner in a proposed ethane cracker plant in Belmont County, Ohio, across the river from Moundsville, West Virginia, announced on Tuesday that it is exiting the project.
In a joint statement with PTTGC America LLC, the Thailand-based company driving the project in the Ohio Valley, an executive said that despite Daelim’s withdrawal, the project remains a “top priority.”
“We are in the process of seeking a new partner whilst working toward a final investment decision,” the head of PTTGC America, Toasaporn Boonyapipat, said. “We look forward to making an announcement by the end of this year or early next year on this transformative project for the Ohio Valley Region. We wish Daelim well and appreciate its contributions to our effort.”
The proposed Belmont County cracker plant has been in the works for a few years and has faced a growing backlash from some in the local community who fear the project could fuel a new petrochemical industry that could be harmful for the climate and health and safety of residents.
In 2018, Daelim announced it was partnering with PTTGC America on the project. The companies purchased 500 acres of land along the Ohio River in Dilles Bottom, where a coal-fired power plant once operated.
If constructed, the plant would take ethane — a product of natural gas — and produce up to 1.5 metric tons annually of ethylene, a feedstock used in plastics and chemical manufacturing. The plant’s air permit estimates the cracker would produce the equivalent carbon dioxide emissions of putting about 365,000 cars on the road.
According to PTTGC America, the project would invest $47.5 million over 15 years in education and other community needs while also generating more than $20 million in sales tax revenue during construction.
In their statement, both companies cited the economic uncertainty tied to the COVID-19 pandemic, including oil price volatility, as reasons for rethinking the investment in the Ohio Valley.
A recent report by the Trump administration found expanding the Ohio Valley’s petrochemical industry could be an unprecedented source of economic opportunity and growth when the county, and region, eventually emerge from the COVID-19 pandemic.
However, recent analyses by the Institute for Energy Economics and Financial Analysis, a think tank whose mission is to accelerate the transition to a diverse and sustainable energy economy, found changing market conditions, exacerbated further by the coronavirus pandemic, call into question the economic viability of petrochemical investments in the Ohio Valley, including Shell’s Monaca cracker plant, currently under construction near Pittsburgh in Beaver County, Pennsylvania.
Environmental groups have reached a settlement agreement with a petrochemical company in Ohio to beef up air pollution controls at a proposed petrochemical plant along the Ohio River.
Thailand-based PTT Global Chemical America and South Korea-based Daelim Industrial Co. have proposed building a multi-billion dollar ethylene cracker plant on a 500-acre tract of land in Belmont County, Ohio, just a few miles from Moundsville, West Virginia.
The plant would crack apart ethane — which is produced during natural gas fracking — into smaller molecules used in plastics and chemical manufacturing. The plant would produce an estimated 1.5 million tons of ethylene annually.
An air permit issued by the Ohio Environmental Protection Agency last December allowed the plant to emit 400 tons of volatile organic compounds and produce the equivalent carbon dioxide emissions of putting about 365,000 cars on the road annually.
The settlement signed Monday requires the company to use technology to find pollution leaks and repair them. The company would also install a weather station on site and create a website available to the public with emissions data.
In a statement, environmental groups praised the improvements, but remained opposed to the plant, which would be the second such facility in the region. About 30 miles northwest of Pittsburgh, Shell Chemical’s Monaca cracker plant is under construction. It’s slated to produce 1.6 million tons of ethylene each year and permanently employ about 600 workers when done, according to the company.
“This agreement will help protect local communities from dangerous air pollution should this facility be built, and we’ll continue to fight to ensure that it never comes to that,” said Sierra Club Organizer Cheryl Johncox.
Federal Support
A final investment decision by the project developer has not been made. Proponents envision the Ohio Valley as the next hub for plastics and petrochemical production, which they argue could drive investment and jobs to the region.
The Marcellus and Utica shale formations located in the Ohio Valley contain high levels of natural gas liquids, or NGL, which can be separated from their cousin methane to become valuable feed stocks for plastic and chemical production. A2017 U.S. Department of Energy report found U.S. NGL production in the region is projected to increase over 700 percent in the 10 years from 2013 to 2023.
“Federal efforts are strong and continue to gain momentum,” Steven Winberg, DOE’s assistant secretary for fossil energy, told the Joint Committee on Natural Gas Development. “We also recognize that others are doing a lot and we believe that together we can make this Appalachian petrochemical renaissance happen for the benefit of the industry, the region and the country.”
In addition to concerns over air pollution, those opposed to a petrochemical buildout in the region point to climate concerns. Areport released earlier this year by a coalition of environmental groups estimates production and incineration of plastics in 2019 will add more than 850 million metric tons of greenhouse gases to the atmosphere, or equal to the pollution of building 189 new coal-fired power plants.
The report projected by 2050, emissions from the entire plastics life cycle could account for as much as 14 percent of the earth’s entire remaining carbon budget.
An earlier version of this story incorrectly stated how many environmental groups were part of the challenge. It is three, not four.
A coalition of environmental groups is challenging an air quality permit issued to a proposed petrochemical plant along the Ohio River.
Ohio EPA issued the air quality permit to the PTT Global Chemical America project, proposed for Belmont County, Ohio, in late December.
The plan, called an ethane cracker, would use high heat to break down 1.5 million tons of ethane each year into smaller molecules used in plastics and chemical manufacturing.
Ethane is brought up during natural gas fracking.
The Sierra Club, Center for Biological Diversity, Earthworks and Freshwater Accountability Project filed an appeal of the air quality permit Friday to the Ohio Environmental Review Appeals Commission.
They argue the state underestimated the amount of pollution the plant will emit should have required more effective technology to reduce those emissions.
The permit would allow the cracker to release almost 400 tons of volatile organic compounds each year and produce the equivalent carbon dioxide emissions of putting about 365,000 cars on the road.
At a public hearing in November, state EPA officials said air quality and public health would not be impacted by the plant. Dozens of local residents and environmental groups testified they had concerns.
The plant would be the second cracker built in the Ohio Valley.
More than 100 people braved freezing temperatures to both listen and have their say in front of Ohio environmental officials at a recent hearing in Belmont County, Ohio. For the three dozen or so people who testified, the stakes were high.
The hearing at Shadyside High School focused on a nearly 300-page, densely technical, draft air quality permit. The permit is one more step towards a massive, multi-billion dollar petrochemical plant proposed for the banks of the Ohio River just a few miles away from the auditorium.
Like many at the hearing, Glenn Giffin, president of IBEW Local 141 in Wheeling, West Virginia, used his three minutes to voice a position not merely on the permit at hand, but what this facility could mean for the region.
“It is a project such as this that will revitalize the Ohio Valley,” he said.
Credit Brittany Patterson / Ohio Valley ReSource
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Ohio Valley ReSource
Shadyside weathered coal’s decline, now the rise of gas fracking brings major changes.
Giffin and other supporters see a potential economic boom in the plant, called an ethane “cracker.” Its natural gas furnaces literally crack apart ethane — which is brought up during natural gas fracking — into smaller molecules used in plastics and chemical manufacturing.
But Belmont County resident Jill Hunkler sees this plant as the beginning of something else: an environmental nightmare.
“We want better options than a massive petrochemical plant,” Hunkler told the audience.
Officially, the hearing was about a permit. But everyone gathered understood that much more is at stake. The growing abundance of natural gas could fuel a new petrochemical industry in the upper Ohio Valley, with all the economic gains and environmental risks that might bring. The decision on the cracker plant permit presents a crossroads moment for those who live here.
Cracker Background
A few years ago, Thailand-based PTT Global Chemical began scouting the Ohio Valley for a location to place a cracker plant.
JobsOhio, a private economic development corporation created by Ohio Gov. John Kasich (R) in 2011 to help woo jobs to the state, worked closely with the company. Matt Cybulski, sector director of energy and chemicals for JobsOhio, said the group helped PTTG select the Belmont County location and put together an incentive package. That included remediation on the site of FirstEnergy’s old R.E. Burger coal-fired power plant that once stood at the proposed cracker’s location.
Credit Courtesy PTTGCA.
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Courtesy PTTGCA.
An ethane cracker plant in Thailand, home to PTT Global Chemical.
Cybulski said incentives offered by JobsOhio did not use state tax dollars, but there are tax credits that “can and often are offered to projects like this.”
He and many other state and county officials argue the PTTG project would create jobs.
“Once the plant is built, you have hundreds of good paying jobs that are operating the plant,” Cybulski said. “So, we see this as a long term economic benefit for the local community and the region.”
School district officials have said property taxes paid by the company could bolster local schools.
This year, it was announced that PTTG had partnered with South Korea’s Daelim Industrial Co. on the project and had purchased 500 acres of land in Dilles Bottom, just a few miles from both Shadyside, Ohio, and Moundsville, West Virginia, just across the Ohio River.
A few homes, an apartment complex, a graveyard and a long-shuttered post office dot the unincorporated hamlet of Dilles Bottom.
PTTG’s project is not the first cracker in the region. About 30 miles northwest of Pittsburgh, Shell’s massive Monaca plant is already under construction. The massive petrochemical plant will produce 1.6 million tons of ethylene each year and permanently employ about 600 workers when done, according to the company.
Gas-Powered Growth
If built, the cracker plant in Belmont County could have far-reaching impacts for the entire Ohio Valley, according to energy analysts.
“It’s going to create some real momentum,” said Taylor Robinson, president of PLG Consulting. “There’s going to be some other large petchem companies that will follow suit.”
With that momentum will also come additional infrastructure.
“You’re going to need to have enough wells producing the gas,” Robinson said. “Then you’re going to have to have more gas processing facilities that will separate the ethane out. And then you need storage. Of course you need pipelines between all these things. It’s a complex supply chain that needs to be built for 40 years.”
Credit Alexandra Kanik / Ohio Valley ReSource
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Ohio Valley ReSource
A cracker plant converts natural gas constituents into manufacturing products.
The Ohio Valley is a prime candidate for petrochemical production because of its geology. The Marcellus and Utica shale formations are loaded not only with methane, the primary component of natural gas, but with more complex hydrocarbons like ethane, propane and butane. In the industry this is referred to as “wet,” and the gas being extracted so readily from the region is often referred to as “wet gas.”
While natural gas is desirable for power generation, the natural gas liquids, or NGL, are separated from their cousin methane to become valuable feed stocks for other industries.
According to a 2017 U.S. Department of Energy report, U.S. NGL production in the region is projected to increase over 700 percent in the 10 years from 2013 to 2023. The report adds, that while the region has made “significant investments” in NGL infrastructure to capitalize on the natural gas boom, more can be done.
“New investments to take advantage of the NGL resources in the region have been identified by industry, and forecasts for production over the decades to come highlight the opportunity for additional investments across the NGL supply chain,” the report states.
One investment is in cracker plants.
The Ohio Valley is ethane-rich, and most plastics and chemicals manufacturers are located in the Midwest. Traditionally, the bulk of the nation’s cracker plants are located on the Gulf Coast.
If Midwestern plastics and chemical manufacturing plants could source ethylene from the Ohio Valley that could reduce cost in an already competitive market, according to Robinson.
Infrastructure Needs
Even if the PTTG project is approved, challenges remain, namely that the Ohio Valley would need to develop more underground storage.
“That is extremely important when you start adding multiple crackers, because as you can imagine, there’s several steps to get the ethane to the plants,” Robinson said. “You need storage along the way, and those storage caverns are a key enabler to have enough flexibility to keep these crackers running 24/7, 365.”
Some storage capacity is under development in the region.
Energy Storage Ventures LLC. is developing the Mountaineer NGL Storage project. When completed, the project would store 2 million barrels of ethane, butane and propane in four underground salt caverns on a 200 acre site, about one mile north of Clarington, Ohio, on the Ohio River.
Another high-profile public-private NGL storage project is also in the works. The Appalachia Storage and Trading Hub cleared its first major hurdle earlier this year, when it got approval for the first of two phases for a $1.9 billion U.S. Department of Energy loan.
China’s largest partially state-owned energy company, China Energy, has pledged an additional $84 billion investment in the region to facilitate the development of a petrochemical industry. The company signed a nonbinding agreement, known as a Memorandum of Understanding, with West Virginia state officials to build a series of facilities that would process natural gas liquids and byproducts. But the escalating trade dispute with China appears to have temporarily slowed progress.
‘Cancer Alley’ 2.0
For a growing number of people, this petrochemical future is not one they want for their communities.
Hours before the Ohio EPA air permit hearing, Martins Ferry resident Barbara Mew was powering through biting cold temperatures and snow flurries to go door-to-door in a neighborhood of Moundsville sharing information about the proposed project.
“I think I’ve pushed through to the other side,” she says laughing. “It’s not cold anymore.”
She worries about what types of pollution the huge plant will emit into the air and water. The draft air permit before Ohio EPA estimates the cracker will release almost 400 tons of volatile organic compounds each year. The plant would also produce the equivalent carbon dioxide emissions of putting about 365,000 cars on the road.
“It’s just it’s an environmental nightmare from top to bottom,” Mew said. “There are really no upsides to it.”
Credit Brittany Patterson / Ohio Valley ReSource
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Ohio Valley ReSource
Environmental groups posted signs in Shadyside, OH.
Opponents to the plant expressed concerns at the Ohio EPA hearing that the proposed air permit does not do enough to protect public health, despite assurances from agency officials that the plant would install top-of-the-line technologies to limit emissions.
According to the permit, nitrogen oxide and carbon dioxide emissions will be continuously monitored, but other pollutants will only be tested intermittently. Many people expressed concerns that PTTG is not required to do fence line monitoring, or to actively track what is being emitted from the plant. They are also concerned that the one air quality monitor that is installed in the county would not be sufficient to alert local communities of any pollution above permitted levels.
Many asked for a health impact assessment to determine the potential public health effects of the facility and for Ohio EPA to conduct a cumulative assessment of air emissions that would account for future natural gas industry infrastructure spurred by the PTTG plant.
Ohio EPA hearing officer Kristopher Weiss said the agency’s jurisdiction is fairly narrow and requires the agency to take action on permits within a set period of time. If the PTTG plant goes into operation and spurs additional developments, he said Ohio EPA would evaluate each new project on an individual basis.
“If PTT were to get its permit, and then other ancillary business were to come in, if those businesses need permits they would apply for whatever permits they might need and the agency would take the action they are required to take,” he said.
Leatra Harper, managing director of the nonprofit FreshWater Accountability Project, which organized the canvassing effort, said the volunteers knocked on hundreds of doors and found most people have concerns. A big one is that the Ohio Valley could turn into the next “cancer alley.” The term refers to the huge and heavily polluted belt of chemical manufacturing facilities in Louisiana.
“I don’t understand why fossil fuel extraction, why that’s the only kinds of jobs this area is offered,” she said. “We want jobs that won’t kill us.”
Credit Brittany Patterson / Ohio Valley ReSource
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Ohio Valley ReSource
The possible site of Thailand-based PTT Global Chemical’s ethane cracker plant along the Ohio River, as seen from Moundsville, WV.
Cumulative Effects
Retired public health practitioner Susan Brown sat in Van Dyne’s, a diner located on the outskirts of Shadyside known for its all-you-can-eat spaghetti. She says she worries about what will happen to her community.
“The fracking plant came in. Then we’re talking about the cracker plant. They’re talking about the underground tanks,” she said, sipping an unsweetened tea. She’s concerned that her town is approaching a point where it will be “an area that nobody wants to live.”
Brown says most people she talks to about the cracker plant feel like it’s a done deal. Still, she says it’s important to speak out.
A public hearing regarding the plant’s water permit hosted by Ohio EPA is scheduled for Wednesday, December 12, at Shadyside High School.
