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Corbett Seeks Major Tax Credit for Ethane Cracker

According to many news reports, Governor Corbett is asking the legislature to give plants that create plastics and other items from natural gas fluids $1.65 billion in tax credits over 25 years.

The tax credit would be available to any company matching the designed criteria, but the tax credit was designed with the Shell cracker operation in mind. In March, Shell announced that they had chosen a site in Beaver County for the future home of a major ethane cracker operation over other possible sites in Ohio and West Virginia.

The tax credit would start in 2017, and could break down to about $66 million a year for 25 years for Shell and other similar facilities buying ethane or the products the cracker produced. The tax credit would be five cents per gallon of ethane, up to 20 percent of the eligible tax liability.

This would be additional money saved for Shell, as the plant will be located in a tax-free, or Keystone Opportunity Zone.

Opponents of the plan noted that the Shell plant is already to be located in a Keystone Opportunity Zone with 15 years of tax free status, and that Pennsylvania already offers a huge incentive for companies involved in gas and oil industry to operate here. That coupled with the fact that the Administration has kept such a very large deal involving billions in tax payer dollars close to the vest has fed rumors among the opposition.

Staff for both Corbett and Senate Pro Tem Joe Scarnati (R-Jefferson) said that the tax credit is on point, noting that it would create between 10,000 and 20,000 jobs, resulting in higher employment numbers and increased tax revenues. The state Department of Community and Economic Development agrees as well.

Steve Kratz of state DCED said, “If we keep it here to be used here, by businesses that use the end products of the cracker to make their tires or other products, we add more and more jobs. We are trying to attract more than one cracker with this.”