Pennsylvania Secretary of Revenue, Dan Meuser, is pushing for the state legislature to pass the proposed Pennsylvania Resource Manufacturing (PRM) tax credit during the current budget cycle as an incentive to Shell Oil Company (Shell), which plans to build a multibillion-dollar petrochemical refinery near Pittsburgh.
Possibly the biggest financial incentive package ever, the proposed PRM tax credit would give a five-cent-per-gallon credit on ethane purchased and processed in Pennsylvania. Capped at $66 million a year for 25 years beginning in 2017, the credit would potentially be offset by new tax collections the industry would generate from related economic activity. It is anticipated that this credit would expand new industry, since the PRM tax credit could be sold upstream to suppliers and downstream to manufacturers.
Shell views the tax credit as a way to help ensure that ethane is abundant and affordable for the life of the refinery, which it says could extend for three or more decades. The Shell plant will be located in Monaca within a tax-free zone, with construction beginning in two years. Meuser estimates that 10,000 construction jobs will be created during the four years it will take to build the plant, with an additional 10,000 to 17,000 jobs resulting from suppliers and manufacturers around the Shell refinery. According to Shell, the core plant could employ more than 400 people.
The proposed Shell “cracker” plant would convert natural gas liquids from the bountiful Marcellus Shale formations to ethylene, which manufacturers could then use to produce chemicals that have multiple uses from plastics to tires to antifreeze.
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