Developers Put a Plastics Plant in Ohio on Indefinite Hold, Citing the Covid-19 Pandemic

The announcement was a setback for the Trump administration and local officials, who want to bring petrochemicals to a region heavily invested in fracking.

Apr 24, 2020
A collaboration between Thailand’s PTT Global Chemical America and South Korea’s Daelim Industrial has been planning to construct a $5.7 billion plastics manufacturing plant at this site, as it was in February 2019, in Belmont County, Ohio.

A collaboration between Thailand’s PTT Global Chemical America and South Korea’s Daelim Industrial has been planning to construct a $5.7 billion plastics manufacturing plant at this site, as it was in February 2019, in Belmont County, Ohio. The project has been delayed indefinitely due to the coronavirus pandemic. Credit: James Bruggers/InsideClimate News

The developers of a proposed plastics manufacturing plant in Ohio on Friday indefinitely delayed a final decision on whether to proceed, citing economic uncertainties around the coronavirus pandemic.

Their announcement was a blow to the Trump administration and local economic development officials, who envision a petrochemical hub along the Ohio River in Ohio, Pennsylvania and West Virginia.

Environmental activists have opposed what they say would be heavily polluting installations and say bringing the petrochemical industry to this part of Appalachia is the wrong move for a region befouled for years by coal and steel.

Thailand's PTT Global Chemical America and South Korea's Daelim Industrial have been planning major investments in the $5.7 billion plant, 60 miles southwest of Pittsburgh, for several years. 

 

On the site of a former coal-fired power plant, the facility would have turned abundant ethane from fracking in the Marcellus and Utica shale regions into ethylene and polyethylene, which are basic building blocks for all sorts of plastic products.

The partnership had promised a final investment decision by summer, but announced the delay in a statement on its website. 

"Due to circumstances beyond our control related to the pandemic, we are unable to promise a firm timeline for a final investment decision," the companies said. "We pledge that we will do everything within our control to make an announcement as soon as we possibly can with the goal of bringing jobs and prosperity to the Ohio Valley."

In March, financial analysts with IHS Markit, a global information and data company, and the Institute for Energy Economics and Financial Analysis (IEEFA), a nonprofit think tank, agreed the project was in trouble even before the coronavirus began to shrink the global economy.  A global backlash against plastics, low prices and an oversupply of polyethylene, were all signs of troubling economic headwinds before Covid-19 sent world oil prices tumbling, disrupting the petrochemicals industry.

JobsOhio, the state's private economic development corporation, has invested nearly $70 million in the project, including for site cleanup and preparation, saying thousands of jobs were in the offing. A JobsOhio spokesman declined to comment Friday.

"It's good news," said project opponent Bev Reed, a community organizer with Concerned Ohio River Residents and the Buckeye Environmental Network. The delay, she said, "gives us more time to educate and organize and it gives us an opening to create the economy we want."

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