Tuesday, February 9, 2016

Corbett offers detailed defense of Shell plant tax deal

There may not have been many specifics, but Gov. Corbett offered his most expansive remarks yet on negotiations on the Shell ethane plant his administration is working to locate in southwestern Pennsylvania.

Corbett offers detailed defense of Shell plant tax deal


He may have been light on specifics, but Gov. Corbett offered his most expansive remarks yet on negotiations with Shell Oil to build an ethane plant in southwestern Pennsylvania. 

In an ad hoc news conference after addressing insurance commissioners in Harrisburg, Corbett cautioned the deal is not yet done, but if Shell locates here, the massive plant has the potential to "reindustrialize" Pennsylvania.

"Manufacturing is leaving Pennsylvania and going to other countries. This is an attempt to bring manufacturing back," said Corbett.

News of an unusually large tax credit totaling $1.65 billion offered to Shell to locate at a Beaver County site was first reported by Capitolwire news service last week.

Under the deal Pennsylvania would offer a 5-cent-a-gallon tax credit for Shell Chemical L.P. and other manufacturers using Pennsylvania ethane, a Marcellus Shale drilling-zone product the governor says could be the base for a new plastics industry. That would come in addition to other tax incentives offered as part of the Keystone Opportunity Zone program.

Capitolwire and the Associated Press also reported that Corbett officials told lawmakers the state would take the unusual step of covering tens of millions in clean up costs for hazardous waste at the site, a still-operating zinc smelter in Monaca. Two top Corbett administration officials sent out a press release denying any such deal over the weekend. 

Corbett pointed out on Monday that the 25-year tax credit would begin when the plant opens in 2017 and totals roughly $66 million a year - less than the state hands out to film companies as part of the film tax credit.

At the same time it has the potential to spur related petro-chemical industries in the southeast.

The administration has said the deal would create 10,000 construction jobs and up to 20,000 "spin off" jobs. It is unclear how many people the plant would employ over the long term.

Corbett compared the talks to a sensitive land deal playing out between nations. (In this case other suitors included West Virginia and Ohio.)

"[Shell] planted the flag," said Corbett."I don't want to lose this. This is a game changer."

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Commonwealth Confidential gives you regularly updated coverage of the state legislature, the governor and the workings of the state bureaucracy. It is written by Angela Couloumbis in the Inquirer's Harrisburg bureau, based in the statehouse, and by the newspaper's far-flung campaign reporters.

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