WASHINGTON (Reuters) – A massive Pennsylvania plastics project that President Donald Trump touted during a visit last year faces risks of oversupply and a low price outlook for the materials, a report by an institute that examines energy issues said on Thursday.
The Pennsylvania Petrochemical Complex plant in Beaver County, owned by Shell, has been promoted by some as an economic savior in a region still suffering from the demise of steel industry in the 1980s.
But the $6 billion to $10 billion plant, expected to open in 2021 or 2022, faces competition from other major plants owned by companies like Exxon Mobil, expected growth in recycled plastics, and the sluggish global economy, according to the report by the Institute for Energy Economics and Financial Analysis, which supports the transition to green energy.
“A lot of people think it’s the second coming of the steel industry … but this is way too weak of a proposition and a questionable economic development choice,” Tom Sanzillo, IEEFA director of finance and former first deputy comptroller of New York state, said. Sanzillo hopes local officials and investors will ask questions about the plant.
Shell spokesman Curtis Smith said the short-term outlook for the chemicals business is challenging, but long-term demand for petrochemical products will grow. The project is advantaged given its proximity to abundant, inexpensive feedstock, Smith said, referring to the region’s natural gas and ethane.
Trump won Pennsylvania in the 2016 election by less than 1 percentage point and has visited the state often ahead of the November vote.
“This is just the beginning,” Trump told thousands of building workers wearing yellow vests at the plant last August. “My administration is clearing the way for other massive, multibillion-dollar investments.” He said the project would have never happened without him, although its final permits were issued before he was elected.
The White House did not immediately respond to a request for comment.
Source: Read Full Article