Can a New Factory Save an Old Town? Moundsville Awaits Plastic-Making ‘Cracker’ Plant

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Chevron gas plant in Moundsville, WV

One future path that came up when we were reporting and shooting our movie (which you can watch for $3.99 here) was the possible construction of a so-called “cracker” plant in Ohio across the river from Moundsville.

People like mayor Phil Remke say it could revitalize the town, creating thousands of high-paying to jobs to build the plant, and hundreds of permanent positions when it’s finished. Opponents warn of pollution, higher cancer rates, overcrowding, and a shortage of jobs local residents are qualified for. (The gas industry’s best jobs typically go to highly-qualified transplants, not locals.)

Before we tackle our headline question, let’s answer this one: what’s a cracker plant?

Short: It turns gas into plastic.

Long: The first synthetic version of plastic, made out of coal, was invented early last century to replace rubber. The innovation was to turn hydrocarbons into polymers, a string of molecules, that can be moulded into anything from Coke bottles and bags to car parts and iPhone cases. In 2019, the cheapest way to make plastic is with natural gas, in a cracker plant. It employs high-pressure steam to “crack” ethane molecules from natural gas into little beads made out of a polyethylene, which are packed in bags and shipped around the world.

And America is currently going through a cracker boom, sprouting new factories in gas-rich regions.

Despite an environmental movement that’s led some governments to restrict plastic usage, people want bags, pens, cell phones and cars. Plastic is cheap, easy to use, and can save fuel by making cars lighter.  Annual demand is expected to top 500 million tons by the end of next decade, from 311 million tons in 2014. The global plastics market is worth over $500 billion a year. Human consumption of plastic bottles topped 500 billion units last year.

That’s why the expansion of shale gas drilling in the US this decade, using hydraulic fracturing, or fracking, has prompted firms like Shell, Exxon and Dow to build $150 billion worth of new US gas-reliant chemical plants, in places like the Ohio Valley and the Gulf of Mexico.

This week, President Trump toured one, a plant Dutch oil company Shell is building near Pittsburgh. The 386-acre $6 billion project is employing over 5,000 workers, and, once operational in a few years, will produce over a million tons of plastic a year. At full capacity, it will require around 600 permanent workers, the company says. 

That project is similar to what could happen down the river, across the water from Moundsville, where Thailand’s PTT Global Chemical and Daelim Industrial Co. of South Korea have permits to build. According to a recent story in The Intelligencer, Wheeling’s newspaper, PTT, the lead investor, has hired Bechtel, a major international contractor which has been building the Shell plant.

With Bechtel overseeing both projects, there’s a stronger possibility that workers from the Shell site, once it’s completed, could relocate to the local region to begin work on the PTT site.

It’s still unclear when that will happen. PTT has yet to commit to building the plant. (That’s why we decided to not include the project in our film.) But, still, a groundbreaking seems increasingly possible.

So can a factory save a town? In other words, how badly should Moundsville want this? Are the jobs worth the crowded roads and dirtier skies? (A cracker plant is likely cleaner than a coal-fired power plant, but environmental impact is never zero.)

I posed the question to the University of Pittsburgh economist Chris Briem, who studies economic development in the region. “The question of whether (a) people follow jobs or (b) jobs follow people is an absolutely enormous topic at the center of many if not all debates on economic development,” he wrote me in an email. With many sectors, like tech, education and medical, able to operate almost anywhere, investment is driven by “things like fiscal incentives and tax competition and especially as labor markets tighten the availability of labor,” Briem wrote. However,

for gas and coal mining, it’s clear that the jobs will follow the resources, he said. So you will get a bunch of jobs. But will other sectors and industries follow? The answer is probably not.

For a place like Moundsville, the challenge is that so many working age people have left, making it difficult to rebuild a strong diversified economy.

 You see just unbelievable losses across the medium-sized regions of the Rust Belt, especially those in proximity to Pittsburgh: Altoona, Johnstown, Weirton, Erie. Hard to rebuild a new competitive advantage (especially in an era where workforce is a more important factor) when you have lost the part of the workforce most able to adapt and change.

To mayor Remke’s delight, the cracker plant will create jobs. And the people working at the plant will spend cash at Bob’s Diner and other restaurants, shop at the Wal-Mart, and sleep at the Sleep Inn. (One strike against local economic development: These days, most businesses in places like Moundsville are owned by outsiders unlikely to reinvent profits in the community.)

How much more new job-making business follows the cracker plant will depend on other factors, like Remke’s leadership, and whether Moundsville can incite enough qualified working age people to move there.

Whatever comes first, in the end, an economy is only ever as good as its people.

John W. Miller

 

 

 

 

 

 

 

 

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