The Shell. Pennsylvania cracker, as it's called, is a huge facility that takes hydrocarbons and cracks them into more useful parts.
A plant like this is a good demonstration of scale.
It's years in the making, in this case, a decade.
It's very impactful in this case, adding around 4% to us cracking capacity.
The location and timing matters hugely.
This was one of the first crackers, not on the US Gulf area, which is the traditional area for such operations.
It was instead closer to the northeast of America.
This would mean transport to customers in that area is easier and disrupts existing relationships with golf suppliers.
None of this would be particularly surprising as it's happening in very slow motion in the public arena.
Making a plan like the Pennsylvania cracker takes a lot of work dialogue with local government and other processes, which are highly public.
This means the market can respond very early.
Another example in Louisiana is A PVC plant planned by Shin etsu, a Japanese chemical company.
This was disruptive to prices in the chemical industry years before it is completed.
The urge to expand has however caused oversupply.
Once you start making a plant like the Pennsylvania cracker or Shenette Sue's PVC plant, it's hard to stop.
Even if it turns out you are making it at the wrong time, utilization rates might go down.
Fixed costs can't shrink easily.
This causes margin problems.
We'll see these ideas contribute to the chemical industry being highly cyclical.
