DC Liberal Says Shell Cracker a Bad Deal for PA Taxpayers
This story is unbelievable on so many levels. A pointy-headed liberal who cloisters himself inside the insular Beltway of Washington, DC made a trip to Pittsburgh last week to talk to a small class of 70 students at Carnegie Mellon University. In this talk the lib proclaimed that the “incentives” provided by PA to Shell to lure a cracker plant to the state are, essentially, monies the state didn’t have to spend and a burden to the taxpayers of PA because Ohio and West Virginia may also reap some of the benefits of the cracker (without “paying” for it). The lib’s operating assumption is that 100% of everyone’s money belongs to the all-knowing government–including money made by big, evil corporations like Shell. He further states that by granting a few exemptions on taxes to Shell, PA is taking money out of the pockets of common folk. His philosophy and assumptions are so twisted it’s beyond belief. What’s more twisted is that the Pittsburgh Post-Gazette wrote a major story about the talk–as if it’s news…
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A great article in Investor’s Business Daily explores the link between shale gas and the “explosive expansion” of the U.S. petrochemical industry. Part of the petchem supply chain is finding a cheap source of ethylene, the raw material used in making all sorts of plastics products. Manufacturers get ethylene from ethane cracker plants. The article discusses that link, and the reasons why Shell chose to locate their new multi-billion dollar ethane cracker plant near Pittsburgh. As you can guess, economics play a major role in such a decision. Here are the specific economics that convinced Shell that PA is a good bet…
A banker, a real estate developer and a natural gas drilling company rep walk into a bar… No wait! This isn’t a joke! A banker, a real estate developer and a natgas drilling rep were panelists at seminar held yesterday, organized by the Pittsburgh Business Times. Even though there has been a major slowdown in Marcellus/Utica drilling, all three panelists were upbeat and optimistic–in no small part because of the coming Shell ethane cracker in nearby Beaver County. One comment made about the Shell cracker: “We’re not just building a facility; we’re building an industry.” That’s just how major the Shell project will be in the greater Pittsburgh area. Another comment: “The Marcellus Shale is not in the tank…It has slowed down, which is typical of industries that are sensitive to price cycles, [but] it’s consistent, affordable and is stable.” More interesting tidbits from the PBT soiree…
We suppose we should have known, but we didn’t. We didn’t know that Pennsylvania has a Department of Community and Economic Development (DCED). In fact, the DCED has its own cabinet-level Secretary–Dennis Davin–appointed by Democrat Gov. Tom Wolf in January 2015 when Wolf assumed office. Davin has stayed largely under the radar–until now. Wolf has sent Davin out on a road show to promote the forthcoming Shell ethane cracker plant. Davin is conducting roundtable discussions in various communities around PA to generate ideas on how local businesses can benefit from the cracker. So far he’s visited Beaver County (where the cracker will be built), Lawrence County and Washington County. The DCED is flooding the airways with press releases about Davin’s cracker road show…
Although he still wants to tax the Marcellus Shale industry out of his state, Pennsylvania Gov. Tom Wolf (with the dubious title of “most liberal governor in the U.S.,” see 
Can a single petrochemical facility, like Shell’s proposed ethane cracker plant in Beaver County, “rebirth” all of Pennsylvania’s moribund manufacturing base? That would be a resounding “Yes!” according to Marcellus Shale Coalition president Dave Spigelmyer and Pennsylvania Manufacturers’ Association president Dave Taylor. Writing a column in the Harrisburg Patriot-News, the two Daves make the case for just how big a hairy deal the coming Shell cracker in PA really is…
The coming Shell ethane cracker plant complex in Monaca (Beaver County), PA, will create a lot of jobs–some in the near-term, but many in the medium-to-longer term. The plant won’t be complete for another five years. Between now and then it will take 6,000 temporary workers to build it. Once built, the plant will take 600 permanent employees to run it. Is Beaver County and the greater Pittsburgh region ready for that kind of jobs challenge? As of today, the answer would be “no.” But leaders in the area are working on it…
This is the biggest of big news. We’ve been waiting for this day a LONG time. Earlier today Shell held a “Capital Markets Day” (in the Netherlands) and provided an extensive update on “reshaping” the company–for 2020 and beyond. As part of the update, hidden part of the way through their press release, we get this statement from Shell: “In Chemicals, the company already has brownfield growth projects underway on the US Gulf Coast and in China. 
The muckety-mucks from Shell held their quarterly earnings phone call with analysts yesterday–and there is what we consider big news to report coming from that call. In response to a question from an analyst, Shell’s Chief Financial Officer, Simon Henry, commented there are four major “chemicals” projects currently under consideration by Shell. He also said a decision on the PA cracker plant project planned in Beaver County will likely be the first decision to be made because of “the timing of certain commitments that are already in place.” He added these glowing words about the PA cracker: “It’s an excellent project…[that] provides quite some portfolio resilience relative to the rest of the opportunities.” He later said “It’s a very strong and robust project.” If the price of oil were higher than the current $40, pulling the trigger on the PA cracker would be “a very easy decision.” When you read his comments, it’s hard to miss the enthusiasm at the highest echelons inside Shell…
We have more evidence that Shell’s Monaca (Beaver County), PA cracker plant is now a go. MDN previously told you that Shell has already spent upward of half a billion dollars out of the projected $2-$3 billion it will take to build the project (see