Shell complex in Louisiana provides blueprint for future in Beaver County
Reporting Anya Litvak Photography Andrew Rush
Ascension Parish, LA
Three men smoked cigars and drank beer from the back of a pickup truck outside the Clarion Inn & Conference Center in Gonzales, La.
It was a warm night in late January and two of them had just gotten in from Kansas for a morning meeting with Shell, hoping to score some contracting work. The third was a local contractor who just finished a five-year contract with Shell.
The Kansans had barely managed to get a room. Nearly all the hotels in the area were booked, their parking lots packed with pickup trucks and their conference rooms booked for training and safety meetings. It’s turnaround season in Ascension Parish — a time for annual maintenance when the workforce at the chemical plants swells to double or even triple the regular figure.
The trio in the hotel parking lot knew all about the Beaver County petrochemical complex that Shell is building in Pennsylvania. It’s going to change the whole region, they said, offering some economic predictions.
If Shell employs 600 workers at the Beaver County plant, as it has promised, the region should expect at least 200 permanent contractors on site, they said, doing anything from plumbing to scaffolding to electrical work. During annual turnarounds, it’ll be more like 1,200. And every five years or so, when major components are rebuilt, it could be nearly 2,000.
That means a lot of packed hotels, RV parks, restaurants, bars and Targets.
To be sure, Beaver County isn’t Ascension Parish.
When Shell builds its cracker complex in Beaver County, it will be the third major chemical company to locate there.
A recently released study commissioned by the public-private partnership Team Pennsylvania Foundation, concluded that there will be enough ethane produced from Appalachian shales to supply four more crackers in addition to Shell's. And that's just the crackers. If the state plays its cards right, the study said, many plastic producers and users eager to capitalize on the low-cost of the material, will locate here or expand their existing factories.
Beaver County is where Ascension was in the 1950s. Now, the Louisiana parish has 32 plants that are the lifeblood of the region, dictating everything from the hours of the local donut shop, which opens at 4 a.m. to serve the early morning plant shift, to the timing of school dismissals to avoid shift change traffic.
Geismar, where Shell Chemical has the largest alpha olefins operation in the U.S. and, soon to be, in the world, is the industrial centerpiece of Ascension Parish. If the predictions and prayers of Pennsylvania’s economic development officials materialize, Beaver will start to look a lot more like Geismar in the next decade.
Expansion in Geismar
Hard hats bob across vast expanses of metal at Shell’s plant in Geismar. Water trucks weave between installations, spraying down dust from the construction. A 255-foot distillation tower lays on its side, preparing for erection, looking like a tamed missile.
Shell is in the middle of a $717 million expansion in Geismar, adding a fourth unit to turn ethylene into alpha olefins, which are used to make lubricants, detergents, drilling fluids and a host of other products. The ethylene is piped from two Shell crackers — one in Norco, La., some 40 miles down the Mississippi River, and the other in Convent, La., to the west. It has 2,300 people onsite, though they’re hardly visible next to the hulking machinery on this 800-acre campus.
In Beaver County, the cracker and the units that process the ethylene into other materials will be on the same campus. Shell’s Geismar operation makes nine different liquid products, which are loaded on barges, railcars and trucks. The Beaver plant will make plastic pellets and several byproducts that will be put on trains and trucks.
Natural gas extracted at multiple drill sites; transported through interconnecting pipelines to fractionation facilities.
Natural gas liquids (NGLs) removed; ethane separated from the NGLs through fractionation; ethane transported through pipelines to cracking facility.
Ethane arrives by pipeline to cracker plant; ethane converted to ethylene, then to polyethyene.
Ethane enters furnace and is heated to nearly 1,500°F. Ethane is cracked and reformed into a range of other molecules consisting primarily of ethylene, methane and hydrogen.
The cracked byproduct is routed to distillation columns. Ethylene is separated from other hydrocarbons.
Ethylene is compressed and cooled before entering a polymerization reactor, to which catalysts are added. Reacted ethylene gas becomes polyethylene.
Polyethylene is extruded into strings and cut into pellets.
Pellets are stored onsite and eventually shipped by truck and train.
Royal Dutch Shell has done a lot of soul searching in the past several years, after oil prices took a hit in 2014.
It pulled back on natural gas development, for example, after some less than stellar results. It abandoned plans for liquefied natural gas facilities and Arctic exploration, often after hundreds of millions of dollars had already been spent.
But it has greenlighted several petrochemical projects, including the Beaver County project and Geismar’s AO4.
Chemicals are Shell’s “go forward strategy," said Alan Collins, the Geismar expansion manager, and this site is considered one of the company’s gems.
The Geismar expansion project is so huge it has its own monthly newsletter (TigerTimes), its own wellness coordinator (Emily Wong), its own mascot (a beefy-looking tiger in a yellow hard hat), and a “visual experience” on the Aurasma App.
Shale gas — cheap and plentiful — attracted Shell to Beaver County and it is behind the expansion at Geismar and dozens of other plants on the Gulf Coast.
Ascension Parish swings the way the industry swings and, while times have not been good for oil and gas companies since their commodities tanked a few years ago, the chemical companies that use those products have made a calculation that prices will stay low and supply will be there for the long run.
And so, with support from state subsidies, the companies have announced billions of dollars in expansion projects.
Gary Rowan, vice president for corporate development for Methanex, which recently built a $1 billion methanol plant in Geismar, told the New Orleans Times Picayune in 2012 that Louisiana’s eagerness to help the project along was extraordinary.
“I was surprised by the support they gave,” Mr. Rowan told the newspaper. “Boy, are they ever cooperative. They are out there to do anything to help you.”
The psychology of Ascension
In the tiny waiting room in front of Ascension Parish Sheriff Jeff Wiley’s office hangs a 40-year-old map showing all the chemical plants squeezed together along both sides of the Mississippi River — a reminder of his largest taxpayers and biggest public safety responsibility.
“Let me tell you briefly about the psychology of Ascension,” Mr. Wiley said.
He described a place where chemical companies listen to and help the residents. And when they don’t, Mr. Wiley sets them straight.
Then he paused to offer a “preemptive strike.”
“We don’t just fling open our doors without any scrutiny,” he said. “There is some concern about what they’re doing to air and water,” both of which have improved substantially over the decades, he said.
The worst thing that can happen to a plant is for there to be an accident and for the people of the community to feel like they’re not being told the truth about what happened, Mr. Wiley said.
Then come the fears and accusations, that the company is poisoning the water, that it’s releasing chemicals into the air and keeping it mum. That, too, is part of Geismar’s history.
As others in Ascension Parish do, Mr. Wiley framed it as a matter of trust and communication rather than a perfect record.
“Things being human, there are missteps,” he said.
Following the money
A Louisiana sheriff is also a parish tax collector, and the chemical industry keeps his office well supplied, Mr. Wiley said.
Shell alone has paid upwards of $8 million a year over the past three years, he said. However much of that goes to his office, schools get four times that, Mr. Wiley added, which allowed a segue into a topic that nearly everyone in Ascension Parish likes to boast about. Its schools are among the top in the state.
There have been some tough years in Ascension, Mr. Wiley admitted. Having a budget that relies heavily on the success of a single industry, and a volatile one at that, has given the parish some big setbacks.
Even new projects and expansions come at a certain cost to the budget. For decades, Louisiana has offered a 10-year exemption on property taxes for new industrial facilities and those undertaking capital projects. Technically, it’s a five-year program with a five-year renewal, but both initial tax forgiveness and the renewal was “relatively automatic,” Mr. Wiley said.
“If you fit this criteria, there wasn’t much vetting,” he said. And there wasn’t much that local entities could do.
A taxpayer advocacy group called Together Louisiana calculated last year that the value of that forgiveness over the past 10 years was $16.3 billion, with $1.3 billion of that being “forgiven” by Ascension.
“You build a plant here. Welcome aboard. Please be clean and friendly.”
All states give tax subsidies to corporations, the group argued. In fact, Shell received an incentive package estimated to be worth $1.65 billion to locate in Beaver County, and that includes 15 years of tax forgiveness for local and state levies because it located in a Keystone Opportunity Expansion Zone.
But those local Pennsylvania entities losing out had to give their approval for the tax breaks. They did so while getting Shell to commit to payments in lieu of taxes.
In Louisiana, a state body would approve the tax breaks, which impact parishes, municipalities and school boards, without their input.
“All of us said, that’s what you do,” Mr. Wiley said with a shrug. “You build a plant here. Welcome aboard. Please be clean and friendly.”
But even in Louisiana, that attitude is changing. Last year, the governor signed an executive order requiring local entities to sign off on the tax breaks.
The buffer zone
It can’t be overstated what a difference a few thousand feet makes when it comes to chemical plants.
In Geismar, the neat brick home of Sam Baker is one of the closest to a chemical plant, at just about half a mile. He can see the metal towers from his backyard, can hear the roar of steam being released at times, but it’s nothing like Norco, where homes are just a few hundred feet from Shell’s chemical complex there.
Mr. Wiley said the chemical plants were smart to buy buffer zones to separate from the community, but those are shrinking in recent years as the Louisiana parish expands and as commercial and residential subdivisions are springing up closer to industrial facilities.
He regards it as a symptom of the industry’s own success: people feel so comfortable being close to these plants that they’re building homes on the buffer zone. (Even the sheriff’s office has built a training center, shooting and firing range on 105 acres of buffer property most of it donated by BASF. Mr. Wiley sees it as a way to find use for the land so it doesn’t get developed more broadly.)
For years, Mr. Baker couldn’t hear the noise coming from the plants.
“There was probably 600 feet of wooded area,” he said, standing in his backyard, pointing toward a grass field with Air Products stacks in its skyline.
“At times you can hear it — the stacks up there now. It’s a loud roar of pressure being released,” he said. “At night, you’ll see the flares.”
A developer from another parish bought the land and cleared the trees that had served as a buffer, Mr. Baker said, preparing to plop a commercial center on the former sound barrier.
“We’ve become a working project in action,” Mr. Baker said.
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Advice from Louisiana: How to stay safe near a chemical plant
Listen for the sirens
In Louisiana’s Ascension Parish, where there are 32 chemical plants, the area’s 26 sirens are tested each Monday at noon. If a siren is heard at any other time, it means there has been a chemical release that has wandered outside a plant’s fence line.
It might mean you should close your windows and turn off the ventilation system until the threat subsides, or you might be told to evacuate.
Several TV networks will broadcast instructions, and an emergency call center may be activated to make individual calls to residents.
A team of sheriff deputies may embed in residential communities with hand-held air monitors to determine which chemicals are detected and at what concentrations.
Cody Melancon, captain of administrative services at the sheriff’s office, said there’s an average of one unusual event a week at the plants and about nine area emergencies a year, which might require sirens to sound.
The last time there was a general emergency — the highest level there is — was in June 2013 when an overpressured vessel burst at a cracker run by a Williams Co. subsidiary, leaving two employees dead and more than 100 on-site contractors injured in the explosion.
The chemical plants in Ascension are also part of a Community Area Emergency Response group, a fee-based organization that coordinates safety and emergency response across clients and educates the community about potential industry safety hazards.
All of its members have radios that broadcast all interactions between any plant and the sheriff’s office in the event of an emergency. Membership is about $1,500 a year.
For the last 40 years, there has also been a volunteer hazardous materials team of chemical employees who report to the sheriff when activated in the event of a chemical emergency. It’s an arrangement that Sheriff Jeff Wiley highly recommends.
Not part of that system are dozens of pipelines that snake under the parish from one facility to another. Responding to pipeline accidents isn’t nearly as regimented, Mr. Melancon said.
You’re being watched
Whip out a camera anywhere near the perimeter of Shell’s plants in Norco and Geismar, and you can set a minute timer for the arrival of the first security guard, often followed by a sheriff deputy.
The chemical plants in those areas are guarded by private contractors, bomb-sniffing canine squads, and a network of cameras that record suspicious activity.
In Norco, the facility’s biggest threat, according to security manager Mike Cisneros, is a vehicle-borne explosive device. So every vehicle and rail car that travels through it is screened and sniffed.
Mr. Cisneros said his team has caught several suspicious people in the area and reported them to the Department of Homeland Security in recent years.
Reporting Anya Litvak
email@example.com | 412-263-1455
Photography Andrew Rush
Design & Development Zack Tanner
Animation Graphics James Hilston & Ed Yozwick
Life between two Shell plants