Plastics Makers Indicate Delaware Valley Opportunity, Despite Naysayers

Garland L. Thompson, Esq.
Journalist and Author, Philadelphia

Garland Thompson carefully explains the opportunities created by natural gas, plastics makers and the Mariner East despite usual suspect opposition.

A Delaware Business Now story on Glasgow-based Polymer Technologies raises interesting implications.

If i were to hazard a guess, I’d say Polymer Technologies gets its propylene, polypropylene and ethylene feedstock from Gulf Coast suppliers, who ship it by rail to East Coast plastics makers. That feedstock is the product of a fleet of “steam crackers” that break ethane molecules — and sometimes propane molecules as well — and propane “de-hydrogenators” built in the Houston area to take advantage of Oil Patch resources, especially the Natural Gas Liquids coming out of the Eagle Ford Shale, Barnett Shale, and Permian Basin associated gas production.

Lots of agitation these days by environmental activist groups seeking to end heavy U.S. use of plastics and, especially in the Delaware Valley, attempting to prevent growth of petrochemical industries here, flies in the face of the practical reality that modern society cannot do without the utility plastics products provide. My old paper, The Philadelphia Inquirer, for instance, recently published a stunning claim that Energy Transfer Partners’ Mariner East pipeline development — and by extension, the Marcus Hook Industrial Center it’s designed to feed — is the “Wrong Way to Go,” raising un-verifiable claims about major additions to pollution and greenhouse gases with no benefits to society.

The truth, however, is more nuanced. Another recent news item, the widely hailed report of Braskem America’s Marcus Hook employees remaining locked in their Industrial Center campus weeks at a time, working all seven days of each week turning out propylene feedstock for makers of hospital Personal Protective Equipment for emergency workers fighting the Coronavirus pandemic, left out  some equally important news:

That the feedstock for Braskem’s chemical plant was likely the propane flowing out of the same Mariner East pipeline The Inquirer, the Delaware Riverkeeper, Clean Air Council, and the “Mama Bears” The Inquirer highlighted in Middletown, Delaware County, want so desperately to shut down.

And so it goes. Delaware, like the Southeast Pennsylvania area profiled in the Commonwealth-funded Team Pennsylvania Foundation Report (found at www.teampa.com) on the potential for petrochemical industry growth arising from exploitation of Marcellus Shale Natural Gas Liquid resources, holds a number of industrial users of petrochemical feedstocks. Gore-Tex, anyone? Nylon? Lycra, for all you wearers of running suits? How about all the construction projects that depend upon DuPont Tyvek for insulation?

Delaware, like Southeast Pennsylvania, thus stands directly to benefit from completion of Mariner East’s three pipelines, which not only can serve exports on INEOs Corp’s tankers to Scotland and Norway, but also make it possible to envision the building of one or more of the four additional ethane “crackers” the Team Pennsylvania Foundation report said could more economically serve the Northeast’s plastics makers than rail shipments from the Gulf Coast. It cannot be forgotten that part of the Marcus Hook Industrial Center’s real estate stands in Claymont, and that Mariner East’s pipeline access extends across the State Line.

Pennsylvania’s General Assembly just passed House Bill 732, signed into law by gov. Tom Wolf, to provide 25-year tax breaks for firms wishing to build petrochemical works in the Commonwealth, news celebrated by Northeast Pennsylvania leaders eager to see a planned development of fertilizer and agricultural chemical works get off the ground there, but it is worth noting that this new law also opens the door to development across Pennsylvania of “crackers” like the one Shell Chemical is building at Monaca, Beaver County, on the Ohio River. Shell Chemical’s business plan contemplates export to other countries as well as feedstock service to the nation’s two largest centers of plastics makers, the Chicago area and Greater Philadelphia, and that requires shipping down the recently dredged Delaware River.

It’s only a short step, then, to contemplate potential for construction of an ethane “cracker” and even a propane “de-hydrogenator” such as the one the Brazilian-owned Braskem America wanted to build at Marcus Hook but abandoned its plans after extensive delays in completion of Mariner East, its associated Revolution gathering lines, and a “fractionator” ETP wants to construct at Marcus Hook.

That transmission system is now nearing the end of its long journey toward delivering vast quantities if Natural-Gas Liquids — including “heavier” ones butane, iso-butane, pentane, natural gasoline, and “condensate,” light crude oil, to the Delaware Riverside industrial area.

Companies in Delaware stand to benefit from this development, to be sure, the State of Delaware could do as Pennsylvania’s Ohio River Valley neighbors Ohio and West Virginia have done, and join in a regional initiative to compete with the Gulf Coast states for the business that can flow out of increased petrochemical industrial growth in the Delaware Valley. As the IHS-Markit analysts who prepared the Team Pennsylvania Foundation report said in a Pittsburgh Marcellus Shale Coalition conference I attended, it’s clear that the reason plastics manufacturers want to stay in this region is that they want to remain close to their customers in the Northeast’s major population centers.

Supplying those regional producers of plastic goods, synthetic fabrics, floor coverings, and furniture as well as agricultural chemicals, fertilizer and pharmaceuticals with petrochemical feedstocks produced right here in the Delaware Valley, from Marcellus Shale resources pouring out of pipelines built to bring them here directly  from the wells producing them in the Ohio Valley, just makes such good business sense — not to mention the economic benefits to the region’s under-appreciated blue-collar workforce.

So, it’s surprising that my former editors at The Inquirer have completely overlooked the critical point that holier-than-thou environmental rectitude is worthless if it only means people here must go without their own fair chances to make a living producing the products and substances we all depend on to support our modern, technology-dependent lifestyles.