Pennsylvania

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Shell Tax Break: American Chemistry Council Conducted Jobs Study For Eight Other States, Too

Scott Detrow / StateImpact Pennsylvania

Monaca, Beaver County, near the possible future site of Shell's ethane cracker

The Corbett Administration’s claims that an ethane cracker would lead to “20,000 permanent jobs” in western Pennsylvania are based on a study conducted by the American Chemistry Council, an industry trade group that counts Shell Chemical as a member.

The state has not conducted its own research into the matter, as the Tribune-Review reported earlier this week.

The American Chemistry Council claims a plant would lead to 17,541 new jobs. It divides them into three classes: direct, indirect and induced.

Neither the group’s one-page fact sheet or a longer three-page document  – you can read both at the bottom of this post — explain the study’s methodology, but American Chemistry Council Chief Economist Kevin Smith told StateImpact Pennsylvania he and two other researchers used Mig Incorporated’s IMPLAN economic model to make projections.

The direct jobs are pretty easy to describe: They’re the people who would be employed at the cracker and other plastics manufacturing facilities, according to Smith. The indirect jobs are the “people who supply the valves and motors” and other materials needed during manufacturing, he explained.

Smith’s model predicts a cracker would create 2,396 “direct” jobs, even though just 400 to 600 people would be employed at the Shell plant itself. The study anticipates 8,194 indirect new jobs. The remaining 6,951 jobs would come from the “ripple effect” of increased economic activity driven by the people who move into the Beaver County area.

Or move into Ohio, or West Virginia. Or perhaps Louisiana. The American Chemistry Council didn’t just research the impact of a new ethane cracker being built in Pennsylvania. Smith and two colleagues put together similar reports for eight other states, too.

A one-page fact sheet nearly identical to the one the Corbett Administration has been distributing to reporters is available for eight other states. (All nine are posted below.).

The number of predicted jobs varies from state to state: The American Chemistry Council estimates a new cracker would create 81,000 positions in Texas, but just 12,000 in West Virginia. Smith said the variation is “because the state economies are structured differently. Probably the best example would be Pennsylvania vs. West Virginia,” he said. “There’s a large manufacturing sector in western Pennsylvania. A lot of equipment could be supplied in Pennsylvania plants. In West Virginia that’s not the case. So the jobs…would be higher in Pennsylvania than they would be in West Virginia.”

A Corbett Administration spokesperson told the Tribune-Review the governor is using the American Chemistry Council’s figures because the Department of Labor and Industry hasn’t finalized its own study.

The American Chemistry Council’s One-Page Fact Sheets

The Council’s Longer Pennsylvania-Focused Report

Comments

  • Tim Potts

    This entire project begs a few important questions:
    1. If there were a program to help small businesess with $2 billion of public money, how many jobs would it create statewide?
    2. How far would $2 billion go toward bringing public schools up to 21st Century standards, and how many jobs would that create in every community in PA?

    It’s beyond ironic that we have invested billions in sports facilities that are mostly empty, and now the Shell proposal, while Gov. Corbett wants a moratorium on school repairs and construction. What is so awful about investing the public’s money in a venture, 21st Century schools, that benefits the public?

  • http://www.facebook.com/solidarity Brett Banditelli

    This was possibly the most entertaining ethane related post ever.

  • paulroden

    Tim,

    Tom Corbett received $1.4 million in campaign contributions from the oil and gas drilling industry. So now he is “giving back” to his partners in the private sector.  The answer to your question is that their is no profit in education run by the government.  Only if it is “outsourced to at private or for profit corporation, can their be profit in education.
     

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