In March, the Columbus Dispatch reported that Shell Chemical had decided to build a multi-billion dollar ethane-cracker production plant in the Pittsburgh area.
According to the report, the area won out over potential locations in Ohio and West Virginia. However, according to the Associated Press, Pennsylvania Governor Tom Corbett and his administration are tasked with selling the state on the largest package of taxpayer-paid incentives in the history of the Keystone State to get the facility built and continue with the reindustrialization of the state.
Like other industries in Pennsylvania, the massive facility can thank the thriving Marcellus Shale gas industry for giving Pennsylvania first crack at the Shell facility.
What is the governor's tax credit proposal?
The governor's proposal includes $1.65 billion worth of tax credits over 25 years, which amounts to around $66 million in annual credits to the Shell plant, according to the Pittsburgh Post-Gazette. The tax incentives are seen as critical to get Shell to build the plant in Pennsylvania. The plan has already been accepted by Shell, but Corbett now must sell the tax credits to the General Assembly and taxpayers.
Are there any other proposals circulating Harrisburg?
According to The Pittsburgh Tribune-Review, another proposal is making the rounds in Harrisburg that involves setting a tax credit every year as needed rather than guaranteeing a set rate for Shell. However, according to the Trib report, other lawmakers are skeptical that Shell would agree to any legislation that does not include a contracted tax credit plan.
What will the Shell plant offer to Pennsylvania?
The ethane-cracker facility would be a $4 billion facility that would create 10,000 construction jobs and thousands of other jobs in related industries, according to the Philadelphia Inquirer. In addition, the massive facility could generate one billion in wages and close to $200 million in tax revenue every year, according to The Columbus Dispatch. In short, Pennsylvania is trying to create a large number of jobs by making itself cost friendly to Shell.
What is an ethane-cracker facility?
A cracker plant takes oil and gas and breaks them into smaller molecules, according to NPR. Ethane, which is abundant in Pennsylvania thanks to the massive amount of hydraulic fracking occurring for natural gas, is turned into ethylene, which is used in plastic manufacturing. The Shell plant could become a focal point for other industries and support businesses in the region, according to the Philadelphia Inquirer.
Jason Gallagher is a long-time Pennsylvania resident. He has experiences in trends and developments in many regions from having lived in many parts of the Keystone State, and currently resides in the Pittsburgh Area.