Shell, which paid $4.7 billion last year for gas rights to about 650,000 acres in the Marcellus region, says it's considering building several specialized types of refineries at a complex. If it builds a cracker refinery, the company would thus be able to supply the plant partly with gas from its own wells, giving it more control over supply and costs.Currently, most crackers in this country are located in Texas and Louisiana. Experts said it's striking that Shell and other companies are considering building new plants, instead of just expanding existing ones."This is very different than building a cracker on the Gulf Coast," said Geoffrey Styles, an energy consultant and former senior planner for Texaco with a [widely-read blog]. "If you're building a cracker in the Appalachians you have to be absolutely certain that the supply is there. It's a heck of an endorsement of the Marcellus resource."
Pennsylvania, Ohio, and West Virginia are jockeying to land the plant. Wherever it ends up, Pittsburgh will be at the center of this boom. The city's new found gravity is being tested. Caterpillar Global Mining is looking for an eastern regional headquarters. Pittsburgh is competing with Louisville for the site. I'd bet on Pittsburgh to win because of the Marcellus. I figure the benefits of agglomeration are already a huge factor in the decision.
The jobs associated with resource extraction are small potatoes. But the transformation of Pittsburgh into the next Calgary or Houston is in the pipeline. I still think that even the most optimistic civic boosters are underestimating the impact (in terms of economic growth and migration) of shale gas on Southwestern Pennsylvania.