Vying to host a large new ethane refinery, Pennsylvania, Ohio, and West Virginia have all offered massive tax breaks to Royal Dutch Shell. Strategically close to some of America’s largest shale deposits and conveniently close to the massive population centers of the Eastern Seaboard, a plant in that region would be well-placed to take advantage of the petrochemical resources there. But the question of which state will ultimately receive the plant is still open.
If Shell didn’t build an ethane refinery in the shale-rich part of Appalachia where those three states meet, it would be necessary to ship the raw gas to refineries near the Gulf Coast for processing, and then ship the refined materials back to the East. By situating a refinery in the industrial regions near the Appalachian shale deposits, they will be able to reduce costs greatly and diminish the risk of a transportation accident.
Proponents say the huge new facility will bring a great deal of money into whichever state ends up hosting the project. A Washington, D.C.-based industry lobbying group, the American Chemistry Council, has claimed that the project would employ 2,484 people directly and 6,262 people in related businesses. Shell had previously said that the plant could employ some 10,000 workers in the short-term, but only several hundred in the long-term.
Opponents say the huge tax breaks would force small businesses to shoulder the tax burden. "Who's going to be paying for the roads?" Dr. Robert P. Strauss, professor of of economics and public policy at Carnegie Mellon University, asked the Associated Press. "You have to think through very carefully what the additional costs will be." Strauss went on to say that there has been a history of politicians and the media exaggerating the benefits of such large industrial plants.
Among the contenders, West Virginia has offered a 25-year property tax break, and officials from West Virginia say that without incentives a $2 billion plant would pay about $29 million in property taxes each year, compared to $11 million in Ohio. A bill recently passed by the West Virginia legislature, however, would cut the bill to just $1.6 million a year. Pennsylvania has reportedly offered a 15-year tax break, with Ohio having also submitted competitive offers.
