A group of engineers, economists and other professionals are advising against building a major plastics and petrochemicals plant in Ohio.
On June 15, the group sent a letter advising against the Dilles Bottom, Ohio, project to the governors of Ohio, Pennsylvania and West Virginia. Dilles Bottom is in close proximity to all three states.
PTT Global Chemical of Thailand and Daelim Industrial Co. of South Korea have cleared land at the site and have received $70 million in funding from Ohio, but they haven't made a final decision on the project. The project — first proposed in 2015 — would include polyethylene resin production and would take advantage of low-priced shale gas feedstock that's been developed in the region in the last decade.
The letter states that "our goals for economic growth and job creation are being undermined by the mistaken belief that the region's petrochemical and plastics manufacturing industries are poised to greatly expand and … generate large numbers of new jobs."
"In fact, no such expansion and jobs boom is likely," officials added. "Unless we adopt new and better development strategies, we risk squandering hundreds of millions of dollars in public funds in pursuit of a vision that will not materialize."
In an email to Plastics News, project spokesman Dan Williamson said that the proposed petrochemical complex "would be a multibillion-dollar investment that would yield a positive economic impact for generations to come."
"The project is supported by trade unions, economic development advocates and elected officials from both political parties," he added. "A final investment decision on this project will be based upon a long view of industry and consumer markets, not temporary fluctuations and trends."
The letter from area professionals cites recently canceled petrochemicals projects in the region and identifies other economic, technological, environmental, and health reasons against the PTT/Daelim project, including industry overcapacity.
"In just the past two years, ethylene and polyethylene production capacity in the U.S. has increased by 50 percent, principally along the Gulf Coast, creating a condition of oversupply that [an industry analysis] doesn't see closing until 2026," they said.
"That is why we — a group of economists, engineers, public policy analysts and former policymakers who are affiliated with some of the region's leading institutions — have concluded that regional leaders need to explore more feasible and sustainable economic development strategies," officials added.
The group, which includes professors from Ohio State University, Carnegie Mellon University and the University of Akron, argues in favor of clean energy policies, including electric vehicles, energy storage, wind power and solar power.
The clean energy economy "offers large-scale, high-visibility opportunities, like the Lordstown Motors electric truck plant in Ohio as well as new opportunities for existing businesses in communities all over our region in fields like lighting, HVAC, construction, building maintenance and energy efficiency retrofits," they said.
"We ask you to help stop the squandering of public funds and resources in pursuit of an imagined petrochemical boom."
To date, the only major petrochemicals development underway in the region is a major complex being developed by Shell Chemical in Monaca, Pa. That project will have more than 3 billion pounds of annual PE capacity and is expected to be completed in the early 2020s, although recent construction there has been delayed by the COVID-19 pandemic.
The letter to the three governors comes less than two weeks after the viability of the Shell project was challenged by a report from the Cleveland-based Institute for Energy Economics and Financial Analysis. IEEFA research is cited in the letter sent to governors.
Shell officials defended their project, saying that it's "particularly advantaged given its proximity to customers and abundant, inexpensive feedstock."
Houston-based Shell began construction in Monaca in late 2017. The 386-acre project will be the first U.S. petrochemicals project built outside of the Gulf Coast in several decades. The complex will use ethane from shale gas produced in the Marcellus and Utica basins to make around 3.5 billion pounds of PE resin per year.