Ethane cracking plant in region could create 'thousands' of jobs
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HARRISBURG -- State officials are engaged in a high-stakes but low-key battle to land a chemical plant that would make gas from the Marcellus Shale even more valuable.
Prefacing his comments by noting the confidentiality agreement that he and others have signed, Pennsylvania's top economic development official confirmed that the state has been aggressively wooing several companies interested in locating an ethane cracker in Appalachia.
Such a facility has been the source of speculation in news reports for months. A spokeswoman for energy giant Shell says three states -- Pennsylvania, Ohio and West Virginia -- remain finalists for the plant.
A cracker, as its commonly known, breaks down liquid gas compounds from the "wet" gas that is common in the state's southwest into ethylene, a raw material used to make plastics.
In addition to new jobs created through building and running a cracker facility, there also would be new positions at the businesses that sprout up to use ethylene for manufacturing, said Department of Community and Economic Development Secretary C. Alan Walker.
"It would be like the equivalent of the steel industry," Mr. Walker said in an interview. "It's a whole new industry and the potential is there to create thousands and thousands of jobs.
"My goal is the reindustrialization of Pennsylvania, especially areas like Pittsburgh, Allegheny County, southwestern Pennsylvania, that were hit so hard by the shutdown of the steel industry."
Building an ethane cracker "is part of the natural progression as the industry evolves," said Patrick Creighton, a spokesman for the Canonsburg-based Marcellus Shale Coalition.
"It's a massive, long-term investment," Mr. Creighton said. "Companies wouldn't be considering that type of investment if they didn't have assurances of a broad supply base for years to come."
With hundreds of shale gas wells already in production, Mr. Walker said he views Western Pennsylvania as an easy sell to prospective developers. He cited the region's labor force, proximity to rivers, its universities, hospitals, banks and the overall quality of life.
However, the state's gas drilling regulations remain in flux, with lawmakers ending their fall session without finalizing new rules. Drillers have repeatedly pointed to those pending bills creating "uncertainty" compared to what they say are more standardized rules in places like Ohio.
It's unclear what regulatory checkpoints such a project currently would face in Pennsylvania. Department of Environmental Protection spokeswoman Katy Gresh declined to answer questions about the types of permits and oversight required for that type of a manufacturing facility.
As for the economic incentives that he and other state officials have put on the table, Mr. Walker declined to elaborate. West Virginia officials have been reported to be considering a personal property tax reduction offer worth as much as half a billion dollars in personal property taxes over the next 25 years.
Mr. Walker said significant tax breaks like one West Virginia is mulling reflect the wide-ranging positive impacts that a large plant could have on a state's economy.
A location decision currently is planned for "early 2012," said Shell spokeswoman Kayla Mackey. Mr. Walker said he will be expecting an answer by mid-February, adding that the companies involved are eager to their projects under way.
"We think we have a good offer on the table, but we'll find out," he said. "If we're on a level playing field, we're certainly going to be in consideration."
First Published December 27, 2011 12:00 am
