WV Gov. Tomblin Proposes 25-Year Tax Break for Cracker Plant

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West Virginia Gov. Earl Ray Tomblin has sent proposed new legislation to lawmakers asking for a 25-year break from business property taxes for any company investing at least $2 billion to build an ethane cracker plant in the state. There is a bidding war going on among West Virginia, Ohio and Pennsylvania to attract the plant, a facility that processes ethane from shale gas drilling into ethylene, a raw material used to make plastics.

Shell said last year they would build a cracker plant in the Marcellus region, and that they would announce where it will be built as early as January of this year, which has set off a fierce competition. It’s estimated the plant will cost between $1.5 and $2 billion to build, and once built, will provide thousands of new jobs and billions in economic activity.

Building a new chemical plant in West Virginia tied to the state’s Marcellus natural gas industry would yield a huge, 25-year break from business property taxes.

The legislative proposal is among several seeking to repeal or limit taxes introduced Tuesday on behalf of Gov. Earl Ray Tomblin.

West Virginia is competing with other Marcellus shale states for a so-called cracker plant. This massive facility would convert a byproduct of Marcellus wells into a highly useful chemical compound.

Tomblin proposes slashing the business property taxes of any company that invests at least $2 billion to build one in West Virginia. Officials estimate that such a plant would bring 12,000 chemical manufacturing jobs.*

*The Washington Examiner/AP (Jan 17, 2012) – W.Va. lawmakers receive “cracker” tax break bill