Appalachian region looks to Asia to revive economic hopes
A Thai chemical company has plans for building a multibillion-dollar petrochemical plant in eastern Ohio. The project could create hundreds of permanent manufacturing jobs in the steel, aluminum and glass industries
ST. CLAIRSVILLE, Ohio – A slice of Appalachia along the Ohio River still struggling decades after losing manufacturing jobs in the steel, aluminum and glass industries to overseas competition is looking to Asia to revive the region’s fortunes with a more pliable product – plastic.
A Thai chemical company and, more recently, its new South Korean partner, are taking halting steps toward building a multibillion-dollar petrochemical plant in eastern Ohio that would “crack” molecules of ethane, a byproduct of natural gas drilling, into the raw material used to produce plastic products.
Ohio Gov. John Kasich has said the project, which would create thousands of construction jobs and hundreds of permanent positions, would be a “game changer.” Kasich said in an interview with The Associated Press that the cracker plant could draw in other companies much like Honda did after opening its Marysville assembly plant in 1982.
“These hardscrabble areas would clearly be helped,” Kasich said. “I’m not saying if this comes, everyone’s problems will be solved. But these are great developments.”
Thailand’s PTT Global Chemical has been working on plans to build a cracker plant for several years, injecting optimism in an area of eastern Ohio and northern West Virginia where the effect of a shale gas boom on the local economy has been helpful but limited.
But PTT also has engendered skepticism after failing to keep promises about when it would announce its intentions. At a news conference in March, the PTT-Daelim partnership said it would decide by year’s end.
Lou Krupa, an 80-year-old resident of Shadyside, a village a few miles from the proposed site in an area of Belmont County called Dilles Bottom, said PTT lost credibility when it reneged on a promise last year to announce a decision by the end of 2017.
“I don’t know why an Asian company would come in and build that,” he said.
Steve Beltrondo, 74, a retired power plant worker from Shadyside, said of the delays: “We’ve been listening to this for three years.”
Dan Williamson, a spokesman for PTT and Daelim, said last week that he understands the frustration.
“This is a big deal for that community,” Williamson said. “And they want to know if this is going to happen or not. We completely understand that.”
Williamson said the final decision rests solely on the economic feasibility of the project. The company, he said, has spent over $100 million on land acquisition and planning to this point.
Larry Merry, executive director of the Belmont County Port Authority, has been working closely with PTT on the project and said there are plenty of reasons for optimism.
“It’s a big decision they’re making, and one that I understand is going to take time to make sure they’re making a wise decision,” Merry said.
The Belmont County site holds logistical advantages over the U.S. petrochemical hub along the Gulf Coast in Louisiana and Texas, Merry said. He cited Belmont County’s ready supply of ethane from an expanding gas and oil industry and that the plant would be located within 500 miles of 60 per cent of the country’s plastic producers along with the population centres where they are sold.
Hurricanes, which disrupted the Gulf Coast petrochemical industry during Harvey last summer and released tons of toxins into the environment, obviously aren’t a concern in eastern Ohio, Merry said.
“We hardly have tornadoes,” he said.
The Dilles Bottom plant, if built, would become the second petrochemical complex in the region. Royal Dutch Shell once considered building there, but instead chose a site about 80 miles north along the Ohio River near Monaca, Pennsylvania. Construction of the $6 billion plant began late last year. It could be operational sometime in 2020.
Merry said there are adequate ethane reserves from natural gas drilling in the Utica and Marcellus shale to supply as many as five cracker plants in the region.
While Ohio governmental entities would receive all the plant’s direct benefits, such as income and property taxes, the city of Moundsville, West Virginia, which sits across the river from the cracker plant site, hopes to reap some of the spillover.
Moundsville Mayor Allen Hendershott said his city has taken some preliminary steps to prepare for construction, such as revising zoning laws to help construction of businesses like restaurants, hotels and retail stores.
“Everyone is guardedly optimistic,” Hendershott said. “But until we get that final announcement, it’s hard to invest money for what you might do.”