Beaver County went all in on the false promise of a “petrochemical renaissance” in Appalachia
Contrary to promises made by Shell, the latest economic data indicates that Beaver County isn’t any “better off” today because of its $14 billion ethane cracker. In fact, there is no evidence that the petrochemical plant has boosted the county economically when compared to its surrounding counties. Now, Shell is looking to sell the plant–which received the largest ever tax break in Pennsylvania’s history–just three years after the operations began, validating Research Fellow Eric de Place’s conclusions that the facility was “a terrible investment of taxpayer money.”
Appalachia is the most prolific natural gas production area in the US–and one of the top gas producers in the world–churning out roughly a third of the US’s daily output. Since the shale revolution of the early 2010s, plentiful, cheap gas prompted investment in building gas processing plants, ethane crackers and petrochemical manufacturing plants, all which make use of natural gas both as a raw material and as a source for fuel. Natural Gas Liquids (NGLs) like ethane can be separated out and used to make ethylene, a feedstock for making plastics.
The flood of shale gas in the mid-2010s drove down the price of ethane, making it economical to manufacture more ethylene and polyethylene in the US. Just so, total US NGL production roughly doubled from 2010 to 2018 while it grew by six-fold in Appalachia.
The gas industry sought to cash in on rising demand for ethane. The American Chemistry Council boasted back in 2018 that at the time, nearly 350 fracking-enabled petrochemical projects, totaling over $200 billion, had been planned or completed since 2010.
Shell first announced plans to build a multi-billion dollar ethane cracker and petrochemical plant in Beaver County in 2012. The company broke ground at the project site in 2015 and construction continued until the plant became operational in late 2022.
The Shell plant in Beaver County was touted as a flagship project, a model for Appalachia’s future economic development. Supporters claimed Appalachia was on the precipice of a “renaissance” of petrochemical development, with as many as five ethane cracker plants proposed to manufacture plastic resin products, a nearly 500-mile network of pipelines, and two underground storage hubs for natural gas liquids like ethane.
The Department of Energy (DOE)’s 2020 report on the subject promised the Shell plant and similar projects “would result in transformational economic development for the region.” The report, which relied heavily on findings from the American Chemistry Council, went so far as to suggest “the petrochemical sector alone could result in an economic expansion of $28 billion per year and result in the creation of over 100,000 jobs in the region.
But plans for a regional petrochemical buildout fizzled. Neither of the storage hubs moved toward development, and of the five planned ethane-to-ethylene plants, three were canceled outright and the Shell plant is the only one that has been built. The PTT Global Chemical project proposed for Belmont County, OH has been on indefinite hold since at least August 2021. The cancelled projects include the ASCENT ethane cracker planned for Wood County, WV, the Appalachian Resins plant proposed in Monroe County, OH, as well as a potential second cracker in Beaver County floated by ExxonMobil.
Beaver County is worse off economically than its neighbors, despite big Shell investment
ORVI has been tracking the economic fallout from the Shell plant since 2021. Federal employment and business data suggests that Beaver County isn’t any “better off” today thanks to the Shell Monaca plant. In fact, there is no evidence that the plant has boosted the county economically when compared to its surrounding communities.
Apart from a short period in the late 2010s, Beaver County has consistently lost jobs, according to data from the Bureau of Labor Statistics. As is the case with other major construction projects, an influx of temporary workers boosted job numbers in the county between 2016 and 2019. But those jobs fell away when the Covid pandemic hit, leaving the county worse off than when the project was announced in 2012.
Not only did the Shell plant fail to bring the promised economic boost to Beaver County, it appears the facility did little to help the county rebound after the pandemic. The county has not recovered from the pandemic to the same degree as neighboring counties in the region. In fact, Beaver County is the only county in western Pennsylvania of those surveyed to have lost jobs between 2020 and 2024, the latest year for which data is available.
Federal business data tells a similar story. One of the central selling points pitched by Shell and its investors was that the petrochemical plant would spur a “windfall of economic opportunity” in part because of the jobs and businesses generated as support industries moved in.
In reality, the exact opposite has occurred. Beaver County lost businesses by every measure, according to the Census Bureau’s “Statistics of US Businesses.” Since the Shell cracker plant was first announced in 2012 until 2022, the most recent year for which data are available, Beaver County lost nearly 100 business firms, businesses consisting of one or more domestic establishments.
The Census Bureau also tracks the number of “establishments” or a single physical location at which business is conducted. The number of business establishments in Beaver County declined between 2012 and 2022, the most recent year for which data is available. Overall, business growth over the last decade in Beaver County has been stagnant at best.
The oil and gas industry will continue to spin tall tales of job creation and economic opportunity, but a close look at economic indicators shows that since Shell first announced its project, Beaver County has witnessed declining population, zero growth in GDP, zero growth in jobs, lackluster progress in reducing poverty, and zero growth in businesses–even when factoring in all the temporary construction workers at the site. In fact the county has fallen behind both the state and the nation in nearly every measure of economic activity and has not fared any better than neighboring counties in the Ohio River Valley. Unfortunately, the outsized subsidies granted to Shell did not revitalize the local economy as envisioned by the project’s backers.
Shell plant brings Beaver County pollution, headaches instead of economic windfall
So what did Beaver County get from the deal? Far from the rosy picture pitched by Shell, the petrochemical facility has been mired in problems since it began operating in late 2022.
A recent report from FracTracker found that Shell has reported a staggering 17.9 billion pounds of air pollutant emissions between January 2020 and July 2024, including 400 million pounds of unexpected air pollutant emissions caused by 80 malfunction events. Such air pollutants included dangerous chemicals like benzene, 1,3-butadiene, naphthalene, and styrene.
Within just five miles of the petrochemical complex there are 20 schools, 3 colleges and trade schools, 22 child care centers, 5 nursing homes and assisted living facilities, 6 hospitals and medical centers, 27 fire stations and EMS locations, and 53 places of worship.
Within months of operation, community groups filed a civil lawsuit against Shell for repeated violations of air pollution limits in February 2023. Months later, in June 2023, Pennsylvania’s Department of Environmental Protection (DEP) fined the plan $10 million for violating 15 state air quality regulations all within months of commencing operations. The DEP has issued 43 notices of violation to the Shell plant for noncompliance with clean water and air laws since 2017, when construction ramped up.
The Shell plant was supposed to bring economic prosperity in exchange for a record amount of public subsidy. As detailed by Kathy Hipple, Nick Messenger, and Anne Keller in “Pennsylvania’s Bad Bet” released by ORVI last June, the corporation received $1.65 billion in state tax credits to build the plant–the largest tax break in state history–and is set to receive a total of $130.9 million in tax subsidies from the Pennsylvania Resource Manufacturing Tax Credit, according to the Governor’s FY 2024-2025 Budget proposal.
Most recently, Shell is reportedly looking to sell off the Monaca plant to focus on more profitable parts of its business, but not before the company cashed in on nearly $5 million worth of credits for ethane purchased in 2022.
What now for Beaver County?
As Beaver County continues to struggle economically, decision-makers should be wary of promises made by oil and gas companies that pitch toxic, polluting industries as a path to prosperity.
ORVI’s Sean O’Leary has analyzed the economic performance of “Frackalachia” or the 30-county region in the Ohio River Valley and northeastern Pennsylvania responsible for 95% of Appalachian gas production. His most recent report concludes that since the fracking boom, these counties, which have “premised their economic futures on the ability of natural gas and its downstream industries,” have actually lost jobs and population and seen income growth fall well behind national and state averages.
The Shell disaster should serve as a lesson to decision-makers when considering “the next big thing.” The region’s ongoing economic hardship and its impact on everyday people–from nagging inflation to rising utility bills–is real and communities deserve real opportunities. Not false promises based on faulty studies, like the RMU study which served as justification for historic state investment in the Shell facility.
It’s time that we end subsidies for companies that radically underperform and instead prioritize long-term development strategies that center growth, health and the well-being of our communities.