President Trump is visiting Pennsylvania’s cracker plant. Here’s what you need to know about the project

By: - August 13, 2019 7:35 am

Gov. Tom Wolf tours the construction site of the Beaver County methane cracker plant. (Gov. Tom Wolf/Flickr)

President Donald Trump on Tuesday will visit the Shell Pennsylvania Petrochemicals Complex currently under construction in Beaver County.

When completed, the $6 billion Shell plant will convert (or crack) natural gas from shale fields in Pennsylvania and surrounding states into polyethylene, a plastic used for grocery bags, water bottles, automotive parts, and other common items.

The project is almost a decade in the making, and has been hailed by lawmakers as an economic success story — and by environmentalists as a potential disaster. Here’s what you need to know.

$1.6 billion in incentives

To court Shell, the Pennsylvania Legislature and Republican Gov. Tom Corbett approved two major tax incentives in 2012 that are expected to save Shell $1.6 billion over 25 years.

One designated the land where the plant sits a Keystone Opportunity Zone, which for 15 years makes Shell exempt from “state corporate net income tax, local real estate property taxes, state and local sales taxes, and an occupancy tax,” the Beaver County Times reported in 2016.

The paper noted that local officials negotiated a deal with the company that would prevent substantial local tax losses:

Shell agreed to a proposal in which it will pay 110 percent of the annual property taxes paid by Horsehead Corp. before the company moved. Shell will pay that amount to the county, Potter and Central Valley for 22 years, starting when the plant becomes operational.

The other incentive is called the Pennsylvania Resource Manufacturing Tax Credit, which is available to a manufacturer that purchases “natural gas containing ethane as a petrochemical feedstock at a facility within the commonwealth.” The exact benefit is a tax credit of $2.10 per barrel of ethane purchased from commonwealth producers.

To be eligible, companies must also “make a capital investment of at least $1 billion and create the equivalent of at least 2,500 full-time jobs while constructing the manufacturing facility,” per the state Department of Revenue.

Shell announced Pennsylvania as the winning state in 2016. In a press release from the time, the company said the project would create up to 6,000 construction jobs and an estimated 600 permanent ones when the facility is completed.

Officials and lawmakers told TribLive that year that the incentives were key to the deal. But that doesn’t mean everyone is a fan.

The conservative Commonwealth Foundation and left-leaning Pennsylvania Budget and Policy Center, two Harrisburg-based think tanks usually at odds, both argued against the incentives in 2012.

Gov. Tom Wolf is a supporter

Democratic Gov. Tom Wolf was not in office when the incentives were approved. But he fully embraced the project after taking office.

In 2016, after Shell made Pennsylvania the official site, Wolf called the plant “game-changing.”

“My administration is committed to creating jobs in the energy industry through responsible, well-regulated extraction and long-term, creative industrial growth,” Wolf said in a 2016 statement. “We have worked to develop strategies for safe and responsible pipeline development that brings resources to markets and facilities and we have prioritized the Shell plant to show the world that Pennsylvania is a leader in energy manufacturing and downstream production.”

Wolf in 2019 also touted Shell’s $1 million gift to the Shell Center for Process Technology Education at the Community College of Beaver County, which will train people for manufacturing jobs.

There are a lot of environmental concerns

From the moment the project was announced, environmentalists have fought against the plant.

Despite some improvements, air quality in Western Pennsylvania is still poor. Dr. Brian Schwartz, director of Geisinger’s Environmental Health Institute, testified in 2017 that the Shell “facility is going to contribute to air quality impacts and it’s going to contribute health impacts.”

The Shell plant in Pennsylvania will be allowed to emit 522 tons of volatile organic compounds per year. VOCs, according to a report led by the D.C.-based Center for International Environmental Law, “can react with the simultaneously released nitrogen oxides to create ozone smog that can impede people’s ability to breathe, especially those with asthma, and particulate matter, which can also cause cancer.”

From a report by the Center for International Environmental Law

Environmentalists have scored at least one win. The Philadelphia-based Clean Air Council and D.C.-based Environmental Integrity Project successfully forced a settlement with Shell to require the installation of “fenceline monitoring, which can quickly detect emission spikes,” StateImpact reported.

The state Department of Environmental Protection denies the plant will be harmful to Pennsylvanians’ health. A representative told WTAE-TV the agency studied potential health effects and found “that there would be no detrimental effect on human health through the environment.”

There will be protests Tuesday

People Over Petro, a coalition of regional environmental groups, is organizing a protest Tuesday near the plant. From a release:

The Shell Cracker plant would become the largest air polluter in western PA and take us back to the dark days of the smoke-filled skies of the 1940s. If the Shell cracker plant goes online, it would become the largest air polluter in Western Pennsylvania, undoing decades of progress in air and water quality. The health effects of petrochemical plants aren’t a mystery: Louisiana’s Cancer Alley has suffered the devastating effects of plastic production for decades.

The statement references a part of Louisiana that is home to “more than 100 petrochemical plants and refineries,” according to CBS News.

The Legislature is looking to the future

Lawmakers in northeast Pennsylvania want to create a similar tax credit, this one for “energy and fertilizer manufacturing.”

House Bill 1100 is part of Republican leadership’s Energize PA counter-proposal to Wolf’s Restore PA infrastructure plan. It passed out of the House Finance Committee in June before lawmakers went on summer recess.

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Sarah Anne Hughes
Sarah Anne Hughes

Associate Editor Sarah Anne Hughes covers the governor and Pennsylvania's agencies. Before joining the Capital-Star, she was the state capitol reporter for Billy Penn and The Incline, and a 2018 corps member for Report for America. She was previously managing editor of Washington City Paper, editor-in-chief of DCist, and a national blogger for The Washington Post.