Gov. Corbett’s PR Campaign for $1.7B Cracker Plant Tax Break

Pennsylvania Gov. Tom Corbett officially launched his public relations effort yesterday to get the PA legislature to pass a package of tax credits for Shell to build an ethane cracker plant in the state. The package of tax credits will amount to $1.7 billion over a 25-year period (up to $66 million per year) and will not begin until 2017 at the earliest.

Three of Corbett’s cabinet secretaries held a forum at the Beaver County community college yesterday, near the location of the proposed plant (in Beaver County), to push for the tax credits. When the new plant is built, it will result in 20,000 new jobs throughout the region.

Corbett is making a push to get the legislature to adopt the package by the end of June, before legislators adjourn for summer recess. But many legislators complain they don’t know enough about the plan (yet) to cast a vote either way. This effort by Corbett and his administration is an attempt to bridge that gap.

As MDN has previously pointed out, this $1.7 billion investment by PA will end up yielding some $17-$20 billion in economic return to the state. That’s a pretty easy calculation in anyone’s book. MDN has also pointed out that building the plant in PA is not yet a done deal, and West Virginia and Ohio are waiting in the background to take it away if they can (see this MDN story). We now have confirmation that that is indeed the case from none other than Gov. Corbett:

On Tuesday, Corbett warned that he has heard that Ohio and West Virginia are still trying to lure away the Shell cracker with their competing offers of financial incentives.(1)

Corbett is trying to stack the deck in PA’s favor, to “seal the deal,” and this tax package will do just that.

Corbett’s office issued this press release yesterday as part of the PR kickoff:

Members of Gov. Tom Corbett’s Cabinet were joined by a coalition of supporters today to discuss the importance of bringing a petrochemical complex to Pennsylvania that 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.”

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

"An ethane cracker plant means jobs for Beaver County, for this region, and for the state of Pennsylvania,” said Secretary of Labor and Industry Julia Hearthway.

According to the American Chemistry Council, the construction of an ethylene production complex in Pennsylvania will lead to at least 10,000 construction jobs, 400 direct plant jobs, and approximately 17,000 jobs in associated industries that will emerge to support and take advantage of this plant’s operations.

Pennsylvania, led by Corbett, 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.

"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.”

The Corbett administration officials were joined by local supporters of the project including state Sen. Elder Vogel (R-Allegheny); state Rep. Jim Christiana (R-Beaver); Rep. Jim Marshall (R-Beaver); Rep. Robert F. Matzie (D-Allegheny); and Rep. Jaret Gibbons (D-Beaver).

Also in attendance were local and regional officials, including Dennis Yablonsky, CEO of the Allegheny Conference on Community Development, members of the local trade unions and representatives of the Beaver County Chamber of Commerce.(2)

(1) MSNBC/AP (Jun 15, 2012) – Corbett begins PR effort for refinery tax credit

(2) Gov. Tom Corbett (Jun 14, 2012) – Corbett Administration Highlights Potential for 20,000 Permanent Jobs from Building Petrochemical Industry in PA