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2018-01-12 / Community (County Spotlight)

A Q&A with Jack Manning, Executive Director and President of Beaver County Chamber of Commerce

Spotlight on Beaver County
Regional Business Analyst

Shell’s Artist Concept of the Plant 
Photo courtesy of Royal Dutch Shell Shell’s Artist Concept of the Plant Photo courtesy of Royal Dutch Shell On the snow-covered, 350-acre site of the future Shell Chemicals Appalachia ethane cracker plant, more than 1,000 construction workers and technicians are now working on the main phase of the construction project, which will consist of 200 major components and 95 miles of pipeline. The plant will have a 900-foot cooling tower; rail- and truck-loading facilities; water treatment plant; laboratory; office building; a 250-megawatt natural gas- fired power plant; and four processing units — an ethane cracker and three polyethylene units.

Altogether, about 6,000 workers will be needed to build the plant, which is expected to become operational in the early 2020s. The cracker will create 500 to 600 permanent jobs.

For a ground-view perspective on the cracker construction and its impact on the local economy and the region, Marcellus Business Central spoke to Jack Manning, executive director and president, Beaver County Chamber of Commerce. Manning worked in the chemical industry for 35 years for Huntsman, Nova Chemicals and Shell.

MBC: What impact are you seeing locally from the influx of so many construction workers?

Manning: There’s a lot of visibility in the immediate area surrounding the facility, from restaurants to retail shops to catering services. There’s also a lot of activity happening at the Beaver Valley Mall, which is up the hill from the plant site. The mall has announced some new businesses coming in, which are gearing up to serve these workers. Also, Harbor Freight Tool is opening a store at a former Best Buy location to accommodate the workforce’s need for tools.

MBC: We noticed that Shell Chemicals has a website where job applicants can pursue opportunities. Do you have any idea about how many jobs will be created by the cracker plant?

Jack Mannning, Executive Director and President of Beaver County Chamber of Commerce 
Photo provided Jack Mannning, Executive Director and President of Beaver County Chamber of Commerce Photo provided Manning: They have always maintained that there will be approximately 600 permanent Shell employees at the facility. Over the course of the project they will have employed about 6,000 workers of various trades during specific times of construction. But we also know that this industry has a significant multiplier effect, which we estimate being seven to ten indirect or induced jobs for every permanent employee. So the project clearly has the potential to be the most significant one in our region in decades. We are working cooperatively with multiple workforce development groups, especially the Community College of Beaver County (CCBC), to ensure we have a trained and qualified workforce to meet the needs of all of our industry partners and other Chamber members in need of those with STEM based education.

All of our regional higher education institutions are also working together like we’ve never seen in Beaver County. In fact, CCBC, Geneva College, Penn State Beaver and Robert Morris University have formed a Bridges and Pathways College Partnership that include cooperative articulation agreements, scholarship opportunities and cultural events. Everyone wants to ensure that our local residents and students are prepared to be the employees of future, not just for the petrochemical industry, but for the diversification of our economy that is occurring. There has been an increased interest in entrepreneurism and small business development opportunities. It’s all very exciting to see happen over the last year or two.

MBC: Is local housing adequate to accommodate a 6,000-man workforce for the next several years?

Manning: It is, but keep in mind, that for the first phase, about 80 percent of the construction workers are local hires who live within driving distance of the site, either in Beaver County or towns bordering Pennsylvania and Ohio. They are driving up to an hour or so to work, and then getting in their cars and going home after their shift.

After the first 1,000 construction workers finish their work, they’ll move on to a new project, and then Shell and Bechtel will bring in the next wave, which will be pipefitters, insulators, heavy equipment operators, crane operators, welders and the like. So, the numbers won’t be cumulative.

MBC: Manufacturing associations have told us they expect plastics manufacturers to open plants near the cracker to be close to the polyethylene feedstock. Have you had any enquiries from manufacturers looking to locate plants in the area?

Manning: None, and I’m not sure there’s a strong incentive to locate here, particularly for U.S. manufacturers. A pound of polyethylene is priced on a delivered basis. Whether your manufacturing plant is in Indiana, Pa., or in the state of Indiana, and you’re making detergent jugs for Proctor and Gamble, you’re going to get charged the same price. Unless you want to get closer because of just-in-time inventory or to avoid demurrage charges, there’s no real incentive to move here. However, there has been some interest from European and Asian companies that want to get closer to the source of the feedstocks, because that would be a significant savings in transportation costs for them.

MBC: Last year, Governor Wolf provided a grant to the local welders’ union in Pittsburgh to train more welders for the construction of the plant. For the permanent workforce, the plant will need workers who are trained in processing technology. Do you expect there will be enough local workers to fill those skilled positions, or will Shell and Bechtel need to bring in talent from outside the region?

Manning: Welders have been in short supply across the country for about 10 years, because of the profession’s aging demographics. At the chamber, we’re working with New Castle School of Trades in New Castle, Pa., and East Liverpool, Ohio, which is associated with 16 different trade unions. We’re all trying to get middle school and high school students to consider the trades as a career option, because they provide a sustainable family income, and they will help refill the pipeline of lost skilled workers. Not just welders, but electricians, pipefitters and other trades professions where that aging demographic is not being replenished fast enough because of parents who insist that their children go to a four- year liberal arts college, regardless if they can make a living with their degrees.

For the most part, the 500 to 600 permanent employees at the plant should be predominately local hires. Shell is working very closely with local colleges, particularly with the Community College of Beaver County, on a training program on process technology from which graduates are likely to be prime candidates to work at the cracker plant in operations or maintenance.

MBC: Environmental groups have objected to the plant because of concerns over air pollution. They charge the plant will produce 522 tons of volatile organic compounds (VOC) emissions per year, which would make it the largest source of VOC pollution in western Pennsylvania. To offset this impact, Pennsylvania legislators allowed Shell to use emissions reduction credits, or ERCs, where they can trade off credits that lower pollution elsewhere to make up for the pollution the plant will cause locally. What’s your take on this?

Manning: Shell is clearly operating within the air quality standards the law allows and making sure there is no aggregate increase in air pollution across Pennsylvania by using the ERCs. It’s been a small, albeit vocal minority of people who have expressed concerns. This facility is going to be state-of-the- art, and I think Shell has convinced most people of their commitment and desire to use the best technology available. So, those concerns for the average resident in the region, particularly in Beaver County, have been quieted. The loudest voices in this have been from outside the region, particularly from groups in the Philadelphia area, which doesn’t always sell well to the locals, who don’t like the idea of outsiders telling them how to live their lives.

MBC: How is the plan for the ethane cracker plant progressing?

Manning: The facility appears to be on schedule versus the timeline presented by Shell. Most of the infrastructure is complete and “vertical construction” has begun by the end of the year as they said it would. There are multiple cranes on site and around 1,000 contractors or more working on a daily basis. We have no reason to believe their stated 2020-2021 start- up time will not be achieved.

MBC: What has the community reaction been like over the past several months as plans have progressed?

Manning: The business community, especially small business retailers and food service, are extremely happy with the project and the increase in sales for their establishments. Our Chamber members are very pleased to have them as a neighbor. The local municipal officials and residents have also been extremely pleased with the way they are conducting business, keeping folks informed and interacting with non- profit and workforce development groups.

MBC: Are you excited about the potential for jobs and economic growth that the plant will provide?

Manning: We’ve been excited since the day it was announced and we are already seeing an economic impact from the project. Unemployment is down and the latest American Community Survey data is showing a significant increase in the median household income for Beaver County. We have to believe that the project has been a major factor in our 9.5-percent increase versus a national average of 2.4 percent in 2016. The project has also led to several new housing projects, both temporary and single-family homes, as well other ancillary construction such as office and warehouse space, and brownfield redevelopment for new industrial sites.

MBC: What has the relationship between Shell Chemicals and the Beaver County Chamber of Commerce been like?

Manning: Shell has been a great Chamber member, working to promote many of our small business members but also our non-profit community members. This is their home now. Many Shell employees live here locally, and like any good neighbor, they are actively engaged in many charitable events, promoting education, working on increasing opportunities for underserved communities, and helping improve the quality of life we all desire for our families. A Shell official is a member of our Chamber Board of Directors and they are very engaged in several others. We truly value and respect the talent they have brought to the business community, and our ability to solve problems and make progress on a whole range of community issues has increased substantially due to their presence.

MBC: How important is this project to Beaver County?

Manning: Needless to say, this project has put Beaver County at the center of the map in the tri-state area. The opportunity for not only future petrochemical and energy-related industry development, but all the ancillary business that comes with it, is very real. It has also brought a renewed sense of pride and hope to a region that was hard hit by a steel mill decline that reached its nadir in the early 1980s. It serves as the impetus and a reminder that we must diversify our economy and ensure that it is as resilient as the people of this region have been for the last several decades. We hope that innovation, research development, Artificial Intelligence, robotics and other green energy projects follow Shell’s lead and come to our region as well. Our proximity between Pittsburgh and Cleveland makes us ideally situated for all kinds of future development and we’re working hard to prepare for it. .

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