Regional Economic Impact of the Shell Cracker Plant

In June 2016, Shell Oil Company, the U.S. subsidiary of the global oil and gas company Royal Dutch Shell, announced that it had selected a site in Beaver County, PA as the location of its new ethylene production plant. Ethylene, primarily used in plastics manufacturing, is the product of breaking apart (“cracking”) ethane molecules.  The location was selected, in part, due to its proximity to the Marcellus and Utica Shale formations. Natural gas companies in the region produce a surplus of ethane as a byproduct from drilling and fracking.

The construction of the plant, which is slated to being in Q4 of 2017, will bring approximately 6,000 construction jobs to the region. Once completed, early in the 2020s, the cracker plant is anticipated to support 600 full-time jobs. Though only grading activities have been performed at the plant location to date, the economic impact is already being felt. In neighboring Midland, PA, two concrete production facilities have been built and are currently operational. The concrete facilities will support 55 full-time jobs during the cracker plant construction. The Steamfitters Local 449 has increased its recruiting efforts through the use of open houses and offering of a tuition-free, 17-week apprentice training program. These efforts are an attempt to attract skilled tradespeople for the projected 450 welders needed to support the construction. In its 2017 budget, PennDOT allocated $55 million to 11 projects in Beaver County in order to improve or rehabilitate transportation infrastructure in anticipation of major cracker plant construction beginning near the end of 2017.

While the economic impact of the Shell plant cannot be understated, an even greater financial benefit could be on the horizon for Southwestern Pennsylvania. In 2017, the Commonwealth of Pennsylvania commissioned IHSMarkit, a global research firm used by 85% of the Global Fortune 500, to perform a study on ethane production in the region. According to its report, released this year, Pennsylvania Marcellus Shale ethane could support two cracker plants of similar size in addition to the Shell plant, without any additional drilling. While the Commonwealth of Pennsylvania is not currently negotiating with any other large gas companies for such plants, it is important to note Pittsburgh’s strategic location for ethylene production. Pittsburgh is located within 700 miles of 70% of North American ethylene customers.

It remains to be seen whether other multinational oil and gas companies will look to Southwestern, PA, but the lasting economic effect of the construction and operation of the Shell plant will be felt for decades to come.

For more information, please contact Schneider Downs or visit the Our Thoughts On blog.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2020 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

Behind the Numbers in ISM’s Q3 Report on Business
Innovation and Implementation of New Technology in Manufacturing
Manufacturing in the New Normal
Manufacturing BY Mark Sarver
Schneider Downs Manufacturing Webinar a Success!
Final 163(j) Regulations a Win for Manufacturers and Private Equity-Owned Businesses
The Coronavirus Impact on Infrastructure

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office

One PPG Place, Suite 1700
Pittsburgh, PA 15222
p:412.261.3644     f:412.261.4876

Map of Columbus Office

65 East State Street, Suite 2000
Columbus, OH 43215
p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102