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Jobs follow plant construction, but the environment will be affected

| Sunday, Feb. 19, 2012

AUX SABLE, Ill. -- From a mile away on Interstate 80, the 890-acre Equistar Chemicals plant lights up the night sky in Grundy County with a glowing dome of steam and fire above a sparse tree line.

The land surrounding its twisting gray pipes and tall stacks includes a gas-fired power plant, another chemical plant and a gas storage facility, with more connected businesses across the street and a mile away.

It's a scene lawmakers in Pennsylvania, Ohio and West Virginia are fighting to re-create, probably along the banks of one of the region's rivers.

A cracker like Equistar, which turns shale gas ethane into the building blocks of plastics, can bring money and jobs to a community. Equistar is the largest manufacturing employer in Grundy County, and its owner, LyondellBasell Industries, pays more than $6 million annually in property taxes, allowing the school district to keep taxes low while building schools for a booming population.

"When one plant comes in, others will follow," said James Pierce, 76, who watched the decades-long business buildup from his home across the street.

Pierce and his wife, Betty, also watched explosions and fires from their living room window. Chemical releases sickened their horse, they said.

If built in Allegheny County, an Equistar plant would become the largest source of volatile organic compounds -- carbon-based chemicals that form smog -- producing 60 percent more than U.S. Steel's Clairton coke plant, according to county data. It would be the fifth-largest nitrogen oxide polluter, ranking between U.S. Steel's Irvin steel finishing plant in West Mifflin and the Edgar Thomson steelmaking plant in Braddock.

That would be like adding 20,000 cars to the road, said Jim Thompson, the county's air program manager.

"Depending on where these facilities locate, that might be an area where people don't want to go hunting and fishing anymore, because it changes the character of it. Or you might have people who miss more days of work or die earlier," said Joe Osborne, legal director of the Group Against Smog and Pollution. "Anyone who wants to say, 'X number of jobs is what it brings, and that's the end of the analysis,' well, there's a much greater impact than that."

LyondellBasell officials in Illinois and its U.S. headquarters in Houston declined a request for a site tour and interviews at the plant.

'They spared no expense'

Aux Sable, Ill., population 11,793, is about an hour's drive southwest of Chicago. The Equistar plant opened in 1969 and employs about 500 workers and contractors, company officials said. The plant and its surrounding industries form the heart of the county's industrial base, said Missy Durkin, business development director for the Grundy Economic Development Council.

A&R Logistics Inc. started across the street from Equistar in 1969 to truck products to and from the cracker. Its specialty plastic shipping business has grown from two trucks to more than 800. The Dutch company AkzoNobel opened a plant in 1973 to make chemicals for paints, fabric softeners and agriculture; it buys steam and other products from Equistar. Morris Cogeneration was built in the area in 1998 to turn natural gas and waste gas from the cracker into steam and electric power for Equistar and other customers.

"They all have a relationship," Durkin said.

Canadian companies Enbridge Inc. and Veresen Inc. and Oklahoma-based The Williams Companies Inc. spent several hundred million dollars to build a gas processing plant next door, in part taking ethane from gas and sending it to Equistar, said Scott Seibert, spokesman at the joint-venture company, Aux Sable Liquid Products Inc.

"They chose this area -- pretty smart of them -- because they've got an ethane cracker right down the road," Seibert said. "When they built this plant, they really spared no expense."

Aux Sable grew from about 45 employees to 136 in 11 years. Average pay in Illinois' chemical industry was $80,748 in 2010, according to the Chemical Industry Council of Illinois. The company plans to add about 30 workers. LyondellBasell said it will invest $30 million for plant improvements, and Aux Sable could spend millions there, Seibert said.

'It helps the tax base'

LyondellBasell and Aux Sable are the two biggest taxpayers for Minooka Community Consolidated School District 201, with kindergarten through eighth-grade schools, Superintendent Al Gegenheimer said. Since 2000, commuters and suburban sprawl quadrupled the district's enrollment to 4,000.

The influx of cash from the industrial base allowed the district to construct five schools while keeping the tax rate more than 17 percent lower than the state average, Gegenheimer said.

"If we don't have a plant like that here, it's going to be a lot more difficult for us then," he said. "Then we're just another rural district robbing Peter to pay Paul."

This industrial development has drawbacks.

Struggling from a recession that depressed consumer spending on plastics, LyondellBasell filed for bankruptcy protection in January 2009. It finished reorganization in April 2010 but has not paid $13 million in taxes for 2008 and 2009, Grundy County Assistant State's Attorney Susan O. Bates said.

Bates hired New York attorneys to help local governments recoup money, which officials believe they'll get.

"When you get industry like this, it helps the tax base and helps us fund the township," said Ray Underhill, Aux Sable township highway commissioner.

Spurred by shale gas development, the recent drop in natural gas prices helped revive the company and led to record production at the Equistar plant in 2010, according to the company's May 2011 quarterly earnings call.

Less-than-safe history

The plant was working this month, obvious from its steam vents -- nine towering cement cylinders pumping out white smoke along U.S. 6. The emergency flare blazed away in case the plant needed to urgently release gas. A colorful, lighted sign at the main entrance touted 106 safe days at the plant as of Feb. 6.

The Pierces remember less safe days. Looking for country living, they moved to their subdivision in 1962 and learned years later that a chemical company would be built.

Furnace cleanings sent plastic particles falling like snow over their lawn, they said. That sickened the horse. Plant incidents forced neighborhood evacuations, they said.

A fire in September 1989 killed two employees and burned several, according to Occupational Safety and Health Administration records. The federal agency cited then-owner Quantum Chemical Co. for seven serious violations and fined it $3,700.

The plant received a $3,000 citation in 1995 for its management of hazardous chemicals. It has passed three other inspections, including one in 2010, without violations and has not had any fatalities since the fire, according to OSHA.

Equistar paid a $49,725 environmental fine in 2001 because it lacked federal permits for vinyl acetate waste stored on site, Illinois and federal records show. The plant spilled an unidentified amount of sodium hydroxide, or lye, in 2010, but has passed three other state environmental inspections since 2004 without citations, according to Illinois records.

Some neighbors complain of a frequent stench from the area; one compared it to rotten fish.

"After you live around it for so long, you ignore it," said Betty Pierce, 75. "And they've made a lot of improvements."

The Illinois Environmental Protection Agency has just nominated the Equistar Morris complex for an award as the best-operated wastewater treatment plant among industrial sites across the state, according to a letter by the Illinois Association of Water Pollution Control Operators and obtained from LyondellBasell.

The petrochemical industry has improved its safety record since a series of international disasters raised awareness and brought stronger federal standards in the 1980s, said Jerry L. Bradshaw, a Texas A&M University lecturer who started four cracker plants during his industry career.

The plants are cleaner, quieter, bigger and more automated since Equistar was built, he said.

The plant emits large quantities of pollutants that create ozone. It released 470 tons of nitrogen oxides in 2010 and 700 tons of volatile organic compounds, said Rob Kaleel, manager of the Illinois EPA's air quality planning section. It meets the state's threshold as a major air polluter, but its impact is not significant when compared with pollution that comes from Chicago, Kaleel said.

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What's at stake

The cracker buildup could bring several billion dollars of development to Appalachia.

The Marcellus and Utica shales in Western Pennsylvania and parts of Ohio and West Virginia produce large quantities of ethane and other thicker or liquid gases. They're more valuable than typical methane because they can be turned into plastics. Cracker plants transform wet gas into usable forms.

The race for a cracker plant started in summer when Royal Dutch Shell plc announced plans to build in Pennsylvania, Ohio or West Virginia, sparking competition to court the company.

State officials and industry experts say several plants could be built in the region.

A startup, Aither Chemicals, is getting help from Pittsburgh-based Renewable Manufacturing Gateway to raise $750 million over five years to build a cracker it claims will use a fifth of the energy and produce less than half the carbon dioxide of other crackers.

A $3.2 billion investment to build a plant would lead to more than 10,000 permanent jobs in the chemical industry for the host state, according to the American Chemistry Council, an industry group. Estimates expect Shell's plant to cost as much as $4 billion.

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