Even as Gov. Tom Corbett on Wednesday highlighted the importance of bringing a petrochemical complex to Pennsylvania, a local lawmaker was introducing legislation to attract the complex – and others – without using taxpayer dollars.
The proposed Royal Dutch Shell facility in Beaver County would create 10,000 construction jobs and more than 10,000 positions in spinoff production and manufacturing industries, according to the American Chemistry Council. Corbett is proposing a 25-year tax credit worth as much as $1.7 billion to attract the plant.
But state Rep. Jesse White, D-Cecil, has proposed H.B. 2493, which would impose a small surtax on the production of natural gas for a new “Energy Employment Legacy Fund.” That fund would pay for tax incentives to industries that use ethane in manufacturing processes, including Corbett’s controversial tax credit proposal for Royal Dutch Shell.
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 and more.
Pennsylvania, led by Corbett, beat out tough competition from surrounding states to become the primary choice for the project. The plant will be the first in the northeastern U.S. and will, in order to be successful, require substantial additional investments from dozens of new manufacturers.
The governor was joined in Harrisburg by supporters including state elected officials from both sides of the aisle, such as state Sen. Tim Solobay, D-Canonsburg, the Allegheny County executive and leaders of trade unions, business groups and industry associations.
White called his revenue-neutral legislation a way to demonstrate support for the ethane cracker and job creation while adopting a fiscally responsible approach that avoids passing the debt on to taxpayers.
“The taxpayers have already created a tax-free Keystone Opportunity Zone for the proposed site of that ethane cracker, so the private sector producers who will greatly benefit from an increased customer base and a shorter supply chain should also do their part,” White said.
White said his measure would provide $66 million annually over 25 years. The surtax would be applied to all Marcellus Shale natural gas producers who currently pay the per-well fee under Act 13 of 2012. The tax credit would be available to any manufacturer that purchases natural gas containing ethane as raw material for production.