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Shell Oil’s Proposed Pennsylvania Ethane Cracker Hinges On State Incentives

Area Development News Desk

06/26/2012

By the end of the month, supporters of Shell Oil Corporation's proposed $3.2 billion ethane cracker petrochemical plant may learn if state legislators are willing to approve tax credits and incentives that will allow the project to move forward in Beaver County, Pennsylvania.

A petrochemical complex would include an ethane cracker that would process ethane from Marcellus natural gas to produce ethylene, one of the primary building blocks for petrochemicals. Ethylene is used to produce various products, including; food packaging, bottles, house siding, pipes, toys, tires, diapers, footwear, detergent, adhesives and other products.

Gov. Tom Corbett, and members of his cabinet, recently touted the importance of bringing a petrochemical complex to Pennsylvania. The Governor said "the plant would create more than 10,000 construction jobs and up to 20,000 permanent jobs in spinoff production and manufacturing industries."

"The benefits of employing up to 20,000 Pennsylvanians and lowering the raw materials cost for Pennsylvania manufacturers far outweigh the investment,'' Department of Community and Economic Development Secretary C. Alan Walker said. "It's not about politics; it's about jobs. It's about real people who rely on those jobs to pay their bills, feed their families and invest for retirement.''

Pennsylvania beat out tough competition from surrounding states to become the primary choice location for this project. This plant will be the first in the northeastern U.S. and will, in order to be successful, require substantial additional investments made by dozens of new manufacturers, Corbett's office said.

Opponents of the state providing Shell with tax breaks estimated around $1.7 billion requested more information about the likelihood of proposed job creation and questioned why Pennsylvania should invest so much in the oil company's project. Others said state funds would be better used in other areas such as rebuilding the state's existing industrial base.

"If we passively stand by and do nothing, we will not only lose the Shell project but also lose our ability to grow the manufacturing industry in Pennsylvania,'' Department of Revenue Secretary Dan Meuser said. "This project and others could end up in Ohio, West Virginia or in the Gulf Coast, where 26 of the nation's 29 crackers are located.''

"My administration is determined to see this project through to completion. The benefits to the state's southwest and to all of Pennsylvania are immense," said Corbett. "The Shell plant would, if constructed, have the potential to be the single largest industrial investment in the region in at least a generation."