Sept. 16--FINDLAY TWP. -- If you drill it, they will come.
At least that's what some local officials are saying about the recently inked deal to drill on land at Pittsburgh International Airport and Shell's proposed petrochemical plant in Beaver County.
"I think there's no question about that," said Allegheny County Chief Executive Rich Fitzgerald when asked if he thought Consol's airport drilling deal and Shell's proposed cracker plant were linked.
"The level of feedstock will definitely help Shell move forward with their plans. All you have to do is look at why the cracker plants have been built down in the Gulf .... because that's where feedstock is. What we're going to see if we see more wet gas be extracted in western Pa., this may not be the only cracker plant that's built."
Consol last month announced plans to drill 47 unconventional, wet gas wells -- the type of gas found in the Marcellus shale -- on the more than 9,000 acres of land at Pittsburgh International Airport. Plans also include six well pads, three water impoundments, 16 miles of gas lines, 9 miles of water lines and several access roads.
While Shell has yet to firmly announce plants for the project, Fitzgerald seems relatively certain the proposed $2.5 billion ethane cracker plant is going to set up shop in Potter Township on the site of Horsehead Corp.'s soon-to-close zinc smelting plant.
"This is going to move forward," he said.
Yet it hasn't been a smooth road thus far. In June, Shell signed another six-month extension with Horsehead, the second extension granted. The original decision deadline was Dec. 31, 2012, but Shell asked for its first extension just days before that date.
Horsehead Corp. officials, however, aren't so sure.
"(Shell) still has an option until the beginning of 2014," said Ali Alavi, senior vice president of corporate and environmental affairs at Horsehead.
"I have not heard of any specific connection between the Shell project and drilling near the airport. As for whether Shell is going to move forward, I do not have any insight as to how they plan to approach their ultimate decision-making process. I know they continue to undertake review of the site and conduct various due diligence. That appears to be an indicator of continued interest, but I don't know whether you can take that as a clue one way or the other."
Consol officials are also hesitant to make a direct connection between the airport drilling deal and the proposed petrochemical plant.
"From an industry perspective, the proposed facility would create new markets for polyethylene and the potential of a new round of manufacturing investment in this region," Seay said. "It is further confirmation that the greater Pittsburgh region is rapidly emerging as America's energy capital."
Shell officials declined to comment Friday on whether the airport deal or any other external factors may affect their decision to build their proposed cracker plant in Beaver County.
We've all heard the numbers when it comes to the newly inked airport drilling deal. So far, it's paid a $50 million bonus, and is expected to pay $500 million more in revenues. Experts have also projected Consol will invest another $500 million into the region. But just who will get the royalty money -- the airport, the county or local municipalities?
According to Consol officials, the Allegheny County Airport Authority will receive all royalty payments from Consol. None of the money will go directly to the county or Moon or Findlay townships.
"Per the lease agreement we signed with ACAA and Federal Aviation Administration requirements, all royalty payments must be paid to the airport," said Lynn Seay, director of media relations for Consol Energy.
Fitzgerald said the county actually owns the airport land. But Federal Aviation Administration rules say any revenue generated by airport-owned "mineral, natural, or agricultural products or water" go back to the airport, to be used for airport operations.