Industry drawn again to Pittsburgh by resources that once supported steel mills


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There's a stretch of land along the river in Beaver County that's come to represent a possible next chapter for a town that's had an unpredictable century.

The land covers some 300 acres and is slated to be the eventual home of the kind of massive petrochemical facility usually found in the Middle East or along the Gulf Coast. The company interested in building, Royal Dutch Shell of the Netherlands, likes the land's access to riverways and major highways, and its proximity to the Pittsburgh airport.

Of course, those same regional and environmental assets have attracted major industry to the Aliquippa region before. In Beaver County towns like this one, a once-booming steel industry has been shuttered for a generation and recovery has remained stubbornly slow to show up.


A TIDE OF CHANGE


Third in a series on how our economy has transformed since bottoming out a generation ago.

Our regional economy barely resembles the one from 30 years ago. A full generation has passed since January 1983, when the southwestern Pennsylvania economy was at its nadir and unemployment was at its all-time peak.

Sunday: In desperate 1983, there was nowhere for the economy to go but up

Monday: Foundations are credited with resurrecting the Pittsburgh's economy after the 1980s' collapse

Today: Industry drawn again to Pittsburgh by resources that once supported steel mills

Wednesday: No sector of our economy has undergone more changes since 1983 than manufacturing -- technology improvements reduced domestic workforce needs, and foreign competition was stealing business. The manufacturers that remained were forced to adapt.

Thursday: What's the single biggest difference between the region's workforce today and our workforce from a generation ago? In a word: women.

Friday: In the 1980s, investing in technology didn't seem like a way to replace the region's lost jobs. Also, a Latrobe family practice sees a future in an old-fashioned medical care model even as the industry has changed.


Experts say drilling development in the Marcellus Shale could finally offer a possible solution to that intransigent problem.

Aliquippa and other towns like it along the Rust Belt are well-positioned for the subcontractors expected to drive trucks or to handle construction at the drilling and processing sites. In the case of the Shell petrochemical plant slated to be built in Beaver County's Monaca, this chance for stable jobs seems like the county's best shot in a while.

In many cases, the equipment and locales are ready because they haven't changed that much since the last industrial wave.

"It's paradoxical that the area is ripe for a resurgence precisely because of the legacy industrial infrastructure," said David N. Taylor, president of the Pennsylvania Manufacturers' Association.

Aliquippa's story is indicative of that of many old steel towns along the Rust Belt -- places where bakeries and boutiques couldn't do business when the paychecks stopped flowing to their customers.

When the Jones & Laughlin Steel Corp. came in the early 20th century, it brought well-paying union jobs and a stability that was able to ride out the Great Depression, and then thrive during World War II, when steel was needed more than ever.

The city's downturn is pegged to 1984, when LTV Corp., which had take over J&L, closed the Aliquippa Works plant. More than 8,000 workers were immediately laid off, and unemployment skyrocketed to Great Depression-era levels.

A group of former workers gathered for more than a year at the tunnel entrance to the Aliquippa Works plant to protest pension and retirement cuts, drinking coffee in minus-10 degree weather in a small building they outfitted with card tables and flowers and called "Fort Justice." Their name for themselves: the Tunnel Rats.

"How can you be satisfied when you've lost something you earned?" one group member told the Beaver County Times in 1988. "You can't be satisfied. You can't accept it."

Aliquippa continued to struggle long after the Tunnel Rats decamped. Almost 20 percent of its 9,400 residents live below the poverty line, according to 2011 data from the U.S. Census Bureau.

The median household income is about $32,000 -- or almost $20,000 less than the state average. The highest-profile industry in recent media reports has been the city's drug trade.

The proposed Shell facility -- called an ethane cracker plant -- is a unique harbinger for a place like Beaver County.

Industry experts consider ethane cracker plants and other petrochemical facilities the third and final chapter of a natural gas boom. First comes the extraction, then the processing and pipelines, and finally the petrochemical plants -- the places that actually make things with the gas, the places that do something with it.

Company officials say the Shell cracker plant could contribute to the production of a range of petrochemical products that include computer chips, polyester clothing and Ziploc bags.

Once built, such plants are more permanent than the drilling rigs that can move when gas prices fall, and they offer more steady work than pipelines that only need occasional upkeep once construction is complete.

That doesn't mean filling the jobs there will be a cakewalk. Mr. Taylor said approximately 7,000 manufacturing positions in the state are already hard for employers to fill.

The Community College of Beaver County offers free welder training to veterans, dislocated workers and low-income adults. The program, which is funded through several state grants, emphasizes welding skills used in the oil and gas industry.

The state has granted lucrative tax breaks thought to total more than $1 billion for the company. The last two tax breaks in the school district surrounding the plant site were for Wal-Mart and Target stores.

Any construction to build the cracker plant would stretch on for several years, and the land-option agreement that Shell signed with the Beaver County site expires at the end of this year, so the company still has the option of relocating its proposed site.

Still, there's hope that the tide is finally turning.

Some small businesses in the region have already pitched themselves to Shell as potential suppliers, said Steve Shivak, president of SMC Business Councils, a Pittsburgh-area industry group for small companies.

These businesses aren't in the extraction industry, he said, but instead do shale work along the supply chain. "All these small vendors see a surge, for example, in placing orders for trucks or ordering pipe or concrete," he said.

His organization held workshops this year for small businesses looking for shale work, and is preparing to ramp up the program in 2013.

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Erich Schwartzel: eschwartzel@post-gazette.com or 412-263-1455. First Published December 25, 2012 5:00 AM


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