ORVI Insider #28: Large-scale Development by Shell Hasn’t Spurred Economic Growth in Beaver County

For nearly a decade, industry boosters and government officials have claimed the construction of the massive, $6 billion Shell petrochemicals complex in Beaver, PA would spur local economic growth, renewed business investment, and tens of thousands of new jobs, delivering lasting prosperity to the surrounding community.

But as the project nears completion, a new research brief from the Ohio River Valley Institute finds that Beaver County has fallen behind the state and the country in nearly every measure of economic activity, logging zero growth in employment, zero growth in businesses, zero reduction in poverty, and negative population growth since the complex was first announced in 2012.

With a dim financial outlook casting doubt on the prospects of new Appalachian petrochemical development and existing projects failing to meet economic expectations, it’s increasingly apparent that the petrochemical “boom” is turning out to be a bust.

Keep reading for the latest research on energy, economics, and shared prosperity in the Ohio River Valley. And this #GivingTuesday, please consider placing a donation to the Ohio River Valley Institute. Your gift helps us further our mission to realize a cleaner, more sustainable Appalachia where prosperity is shared by all. Thank you for your generosity—click here to donate.

The Shell petrochemical complex under construction in Beaver County, Pennsylvania was supposed to revolutionize the local economy by spurring job growth and downstream business development. But as the project nears completion, new data shows that prosperity hasn’t arrived.

Our latest report reviews the economic track record of Beaver County since the Shell facility was first announced in 2012, finding that the county has failed to keep pace with state and national benchmarks in nearly every measure of economic activity.

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Investments in Bitcoin and other cryptocurrencies have surged in recent years, with some companies—and even countries—recognizing virtual currency as legal tender. But these digital transactions are inflicting real world impacts in Pennsylvania, in particular. Bitcoin ‘miners’ are snatching up the region’s dying coal-fired power plants at fire sale prices to power their operations, raking in profits while Pennsylvanians are left with air and water pollution. 

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The beginning of the end for a number of Appalachia’s coal-fired power plants could soon be upon us. Senior Researcher Sean O’Leary is marking his calendar for January 25, 2022, when the PJM capacity auction is expected to set significantly low capacity prices for 2023 and 2024. The region’s economically vulnerable coal-fired plants rely on PJM capacity payments to stay afloat, O’Leary explains. Without enough additional revenue, the cost of coal-fired power generation may be cast on energy customers—or it could prove too much for industry altogether.

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The petrochemical supply chain has been seen as the lifeline for a fossil fuel industry careening toward collapse. But can ethylene and polyethylene development really save struggling natural gas companies in Appalachia? 

A recent report from the Ohio River Valley Institute outlines four major social and financial shifts that have restructured the plastics and ethylene markets in ways that make the construction of future plastics facilities in Appalachia unlikely. With low ethylene and polyethylene prices projected to remain mired or worsen, chasing new petrochemical development in Appalachia is unlikely to yield returns.

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