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Harvey May Pinch Some Gulf Coast Refining, Chemical Projects

Harvey largely spared oil and petrochemical plants along the U.S. Gulf Coast from significant damage but thousands of homes and businesses were not as fortunate. Refiners and recovery projects will compete for the same labor, driving up costs or causing labor shortages.

Industrial investment in the Gulf Coast is expected to hit $51.9 billion next year, near the 2015 peak, requiring an army of pipefitters, ironworkers and other craftsman, said Industrial Information Resources (IIR), which tracks labor supply for refiners and other industrial companies.

Royal Dutch Shell Plc, which is expanding its operations in the Gulf, also has proposed new investments in western Pennsylvania, near the natural gas-rich Marcellus formation.

The plant will help Shell capture a larger share of the U.S. market for polyethylene, more than half of which is concentrated in northern states. It took Shell years to make the decision to build the plant.

Pennsylvania has started to position itself as a second U.S. refining region, even though new plants are years away from opening. The state lacks the specialized refining workforce and proximity to open water – and the Panama Canal – that make the Gulf Coast area still so appealing.

The U.S. Gulf Coast will remain an attractive investment area, said Shell spokesman Curtis Smith and other energy officials.


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