The Register-Herald, Beckley, West Virginia

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January 27, 2012

Governor in Houston promoting West Virginia for ‘cracker’ plant

By Lawrence Messina Associated Press

CHARLESTON — West Virginia officials believe the state remains a contender for a multibillion-dollar chemical plant that could create an estimated 12,000 jobs, following a Thursday meeting with potential investors in Houston.

Gov. Earl Ray Tomblin led the afternoon trip, armed with recently passed legislation that would slash the property taxes for such a “cracker” plant. These facilities convert or crack the molecules in a byproduct from Marcellus shale natural gas into a widely used chemical compound.

“The meeting went well,” Tomblin Chief of Staff Rob Alsop told The Associated Press on Thursday, after speaking with attendees. “West Virginia was well-received.”

Houston-based Shell and a second, as-yet-undisclosed company each plan to build a cracker plant in the Marcellus region. The state is competing with Ohio and Pennsylvania for both facilities.

Tomblin told AP on Wednesday that he’s had several meetings with companies that may build or invest in a cracker. Other West Virginia officials have gone to bat for the state as well.

Sen. Jay Rockeller, D-W.Va., has spoken to officials both at Shell and other companies to promote the state, spokesman Vincent Morris said Thursday. As chairman of the Senate’s commerce committee, Rockefeller oversees both rail and pipeline issues. Both are necessary components in locating a cracker.

“It’s correct to say that the senator has been very active on this,” Morris said. He added that “There have been a lot of different ways in which he’s been engaged.”

The staff of U.S. Rep. David McKinley, R-W.Va., has also met with potential investors, his office said. McKinley’s 1st Congressional District is considered a prime location for a cracker, as it hosts both Marcellus wells and chemical industry operations.

The governor’s trip came one day after the Legislature passed his proposal to slash a cracker’s property taxes for 25 years if its operator invests at least $2 billion in the project. Both the Senate and House of Delegates passed the bill ahead of schedule and by unanimous or nearly unanimous margins. Tomblin signed the bill Thursday.

The American Chemistry Council estimates that a West Virginia cracker would create 12,271 jobs, with 2,484 people employed directly in the chemical industry and 6,262 indirectly through its supply chain. The remaining 3,524 “induced” jobs would be triggered by the subsequent increase in consumer spending, according to the trade group. 

Pegging a cracker’s price tag at $3.2 billion to build, the council also believes such a project would provide 8,000 short-term, construction-related jobs. The potential for jobs have spurred an intense competition among the three states. Ohio Gov. John Kasich reportedly flew to Houston late last year, while U.S. Sen. Bob Casey, D-Pa., wrote Shell executives on his state’s behalf earlier this month.

Ethylene can be used in an array of products including plastics, sneakers and tires. State officials believe West Virginia’s Marcellus operations produce sufficient supplies of ethane for at least one cracker plant. Each facility would need between 60,000 and 80,000 barrels daily. West Virginia officials estimated in July that the state’s Marcellus shale wells pump out at least 150,000 barrels of the byproduct a day. They also projected at that time that ethane production both for the state and southwestern Pennsylvania will increase to 270,000 barrels daily by the end of 2015, when they hope that at least one cracker begins operating.

The cracker quest will also likely play a role in this year’s race for governor. Tomblin won last year’s special election to complete the term left by fellow Democrat and now-U.S. Sen. Joe Manchin. The office is up for a full, four-year term.

Republican Bill Maloney, who lost to Tomblin by less than 7,050 votes in October, filed Thursday for a potential rematch. He resumed his attacks from last year that cast Tomblin as a career politician unwilling to take bold steps to improve West Virginia.

“I wish him well, and I hope we can get that cracker,” Maloney told AP. “But it’d be nice if everybody got tax deals like that. We’d have a lot more jobs.”

 

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