CEA Energy Industry Update III

The Consumer Energy Alliance, a longtime PEIA member, and Shale Directories hosted a panel discussion with Tom Gellrich from TopLine Analytics and Michael Marr from Shell Chemical Co. on the topic of “The Future of Petrochemicals post COVID-19 in the Appalachian Basin.”

The webinar began with a brief presentation by Gellrich providing an overview of how the shale gas revolution has impacted the chemical industry and the chemical industry’s role in defense against COVID-19.

Gellrich highlighted the drop in natural gas prices, which has incentivized chemical industry investment in the United States to the tune of $300 million. He also noted that more than 70 percent of that investment is from foreign-headquartered companies, underlining the chemical industry’s focus on the United States as a low-cost manufacturing location.

Shifting focus to COVID-19, chemicals have become the world’s first line of defense against the spread of the disease. From hand sanitizers, to medical personal protective equipment (PPE), to even the plastic barriers at the cash registers in stores, these defense mechanisms all come from chemicals.

Gellrich also touched on an interesting shift in opinion on single-use plastics as they are increasingly being used to deter the spread of COVID-19. For example, many grocery stores have begun to require the use of single-use plastic bags and banned the use of re-usable totes that may carry in germs from customers homes.

Following Gellrich’s presentation, Marr gave an update on Shell’s Pennsylvania Petrochemicals Complex in Beaver County. On March 18, due to the COVID-19 situation, the plant was forced to shut down the project and furlough all employees except for 300 that remained on-site for maintenance and deep-cleaning.

Beginning May 4, Shell began adding 300 staff per week in a safe manner, until it was fully staffed. Marr emphasized that the plant has had no confirmed COVID-19 cases among their workers since April (two confirmed cases in March; one in April).

That success is due to precautions taken by the plant, such as reduced capacity bus shuttles to the plant from employee parking, adhering to social distancing measures when conditions allow, requiring facemasks, an abundance of hand sanitizing stations, and requiring one person to a table during lunch time.

As of today, there are 2,600 workers on-site and Shell hopes to add more next week but will make the decision at the end of this week depending on the circumstances at hand. 

After Marr’s update, the webinar shifted to Q&A in which one attendee promptly asked about the recent letter that the governors of Pennsylvania, Ohio, and West Virginia received from a group of economists and engineers following a study released by the Institute for Energy Economics and Financial Analysis (IEEFA), claiming that the economic impact from the region’s petrochemical and plastics manufacturing industries is not as great previously indicated and that the industry “has no future.”

Panelists were quick to refute the letter and report with Gellrich stating the claims in the letter were inaccurate, pointing to increased use in plastics and referring back to previous points on foreign interest in manufacturing in the region due to low natural gas costs.

Shell’s Michael Marr noted company investment and focus on Beaver County’s cracker plant despite the recent economic downturn. Speaking on demand, Marr said, “I don’t foresee a future — or even a present — where there isn’t increased demand for petrochemicals. That was true before the pandemic and I think it’s even more true coming out of it.”