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What's The Future Of The Petrochemical Industry In The U.S.?

ARI SHAPIRO, HOST:

For a decade, increasing American gas production has fueled a boom in petrochemical plants. There are big plans for more of them in Appalachia, but some wonder if the pandemic will crush those plans. Reid Frazier of the public radio program "The Allegheny Front" reports.

REID FRAZIER, BYLINE: From his bar in Shadyside, Ohio, Matt Coffland has been counting on his town getting a new petrochemical plant since it was first planned seven years ago. He says the southeastern part of the state has long been neglected.

MATT COFFLAND: For us to get something, I - rightfully, I think we deserve it by now - I mean, in my opinion. It's always been everywhere else. And then finally, something's going to land right here in our lap. You know, it's about time.

FRAZIER: The plant, an ethane cracker, would be built by a Thailand-based oil and gas company, PTT. It would turn natural gas from nearby wells into petrochemicals and plastics. And it would be a major construction project.

COFFLAND: I mean, it's three miles away from my doorstep. And you're talking an influx of close to 10,000 people at one point.

FRAZIER: A final decision on whether to build it was due this summer. But then came COVID-19, and PTT pushed it off. In July, citing the pandemic, one of the project's investors backed out. That was a disappointment for John Haswell, superintendent of the Shadyside Local School District.

JOHN HASWELL: These are some concept drawings of what our new school district would look like.

FRAZIER: Haswell points to a wall in his office covered with plans for a brand-new $30 million school complex. PTT says if the plant goes ahead, it'll pay for the badly needed new building.

HASWELL: I would really love to get really busy and - a building project. But until we have that final investment decision, I can't do anything but sit - sit and wait and wait and wait.

FRAZIER: Oil and gas backers say fracking has unlocked enough gas in this region for four or five chemical plants like PTT's. But so far, only one is under construction, a Shell plant near Pittsburgh. Kathy Hipple is an analyst with the Institute for Energy Economics and Financial Analysis, which works toward sustainable energy. She says the pandemic has certainly hurt demand, but she thinks the decision by one of PTT's investors to pull out is a red flag that goes beyond that.

KATHY HIPPLE: We view this as a market signal that the project has possibly become far too risky for them to continue.

FRAZIER: She points out that projects in West Virginia, Texas and Pennsylvania have also been delayed or canceled in the past year. Other analysts say there's a glut of new plants on the Gulf Coast and in China that are creating an oversupply of plastics. Steve Lewandowski of the financial research firm IHS Markit says demand will eventually rebound. But he also thinks the Ohio project doesn't make financial sense for now.

STEVE LEWANDOWSKI: If it was such a compelling case to build there, that cracker would've been approved and under construction. And there probably would be another one on top of that.

FRAZIER: Not everyone is sad to see this petrochemical project delayed.

AMANDA PETRUCCI: That's the Superfund site right across the street.

FRAZIER: Amanda Petrucci and her husband and four kids live across the Ohio River in West Virginia. They've had a spate of health problems she worries are linked to a nearby Superfund site. The prospect of more industry nearby had made her consider moving. Now...

PETRUCCI: It's truly made me happy. I feel like I could kind of just hang out here for a minute, little bit longer and enjoy life here where - honestly, it's been, like, kind of a blessing for me 'cause I feel relieved and feel like I can enjoy my property a little more.

FRAZIER: Like others, she'll have to wait and see what happens with the plant, whose future, like so many things right now, is up in the air.

For NPR News, I'm Reid Frazier in Shadyside, Ohio. Transcript provided by NPR, Copyright NPR.