Energy. Environment. Economy.

Support For Shell Tax Break In Monaca, But Skepticism Over Job Claims

Scott Detrow / StateImpact Pennsylvania

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

How much should a state pay to create jobs?

Many people are asking that question, as Governor Corbett  calls on legislators to pass a $1.65 billion  tax break aimed at Royal Dutch Shell.

StateImpact Pennsylvania traveled to Beaver County, to find out how the proposal is playing in the community where Shell is considering building a major chemical processing plant.

 When you walk down Pennsylvania Avenue in Monaca and ask people about the economy, you get a lot of “used to.”

There used to be more steel mills. There used to be more jobs.

So people like Joe David are cautious about their optimism, but they are optimistic that Shell is considering building an ethane cracker in Beaver County. “A plant to come in like that, offer that kind of money — it’s supposed to be a lot of jobs,” he said, sitting in a bar along Monaca’s main drag.  “Again, I’ll believe it when I see it. A lot of people hoping, looking forward to it. A lot of people in the county have high hopes for job opportunities.”

Scott Detrow / StateImpact Pennsylvania

Vince Orend owns King Beaver Cigars in Monaca

Vince Orend runs a cigar store – King Beaver Cigars – so hears a lot of talk from the guys who sit in his shop smoking. ““First I’m hearing 10,000 jobs. Then I hear 200. Personally I hope there’s lots …. When they close the smelter there’s about 600 guys who are going to lose jobs … it would be nice to have about 600.”

He’s talking about the Horsehead Corporation Zinc Smelter, which is moving its operations out-of-state. Six hundred jobs is about right for the actual ethane cracker, which heats up the ethane found in natural gas and converts it into the ethelyne that’s used to make plastics.

Shell operates four crackers in Texas and Louisiana. Between 500 and 700 people work at those locations.

But the Corbett Administration isn’t offering up a 15-year tax exemption and $66 million in annual production tax credits for just one factory. Labor and Industry Secretary Julia Hearthway said she’s convinced a cracker would kick-start a chemical manufacturing boom. “And with it comes jobs. Not a few hun­dred jobs. Not one com­pany hir­ing 300 or 400 jobs. But thou­sands and thou­sands of jobs to Pennsylvania.”

Hearthway said those jobs come from the spin-off industries, as well as the initial construction period. But the Corbett Administration admits its claim of 20,000 permanent jobs comes from industry estimates, not an independent study.

For more on the American Chemistry Council’s job claims, click here.

The governor’s office is warning Shell will build elsewhere if Pennsylvania doesn’t offer tax breaks and incentives. People in Monaca don’t doubt it.

“If we don’t give it, the next state will,” reasoned Eugene Schmuck, who runs a shoe store that’s been in his family for three generations.  “Am I in favor of big tax breaks for big business? Not really,” said Orend, the cigar store owner. “But you’ve got to do what you got to do. And if that’s what it’s going to take, then that’s what it’s going to take.”

Leo Girard, the president of the United Steelworkers union, agrees. “The reality that we have nationally and globally is that if we’re not in the game, West Virginia will do it, or Alabama, or some other place,” he said in a phone interview with StateImpact Pennsylvania. “We’ve seen how the auto industry was attracted down south with huge, huge government subsidies. Some of those plants were almost totally built with government money down south.”

The legislation would give Shell a nickle-a-gallon tax break on ethane it buys from drillers with Pennsylvania tax liabilities. Girard thinks it would would spur development. “I’m not saying that these things are good things to do,” he said.  “I’m saying under the circumstances, you’re left with no alternative.”

Pennsylvania has subsidized industrial projects before, with mixed success.

It gave European ship builder Kvaerner more than $400 million to build a plant in Philadelphia’s Navy Yard. And while the project ultimately employed more than 1,000 people there, it was long-delayed. The company that took it over needed more than $40 million from the state to keep its doors open last year.

The commonwealth also forked over nearly $80 million in the 1970s, when Volkswagon built a plant in Western Pennsylvania. Ten years later, the car maker was gone.

Revenue Secretary Dan Meuser

That history doesn’t deter the Corbett Administration. Speaking in Beaver County last week, Revenue Secretary Dan Meuser said they’d be willing to cut a further deal, if that’s what it takes. “If things do get more competitive, before a deal is signed, is it possible there could be something else that comes up in order to make this a reality? Sure. But there’s nothing that’s planned in that matter, or exists in the present time.”

Governor Corbett has told lawmakers the tax break is an “essential” part of his budget plan.

That means they’ll likely vote on the legislation within the next two weeks.


  • Theatregrove

    Up here in northern Pennsylvania and southern New York they can’t build the hotels fast enough to house the people they bring to the area to do the work. You can forget about jobs for the locals. And, believe me, our crime rate has risen dramatically because OF the people they’re bringing in. These companies promise prosperity to the simple folk, make one or two rich as an example and the locals fall for it.  

    • Menach

      what kind of crime?  you believe its the out of towners committing crimes against the locals?

  • For the people of a democracy.

    Tell shell their business isn’t welcome here. Although the job situation is tough, does Beaver county really need another dirty chemical company moving in? Shell recently addressed the public at Penn State beaver, talking about air quality concerns. They claimed that they are good neighbors, and like to wave in the publics face “There will be jobs opportunities!” because then they are sold. The Beaver river is bad enough as it is, and frankly we have enough companies going on. If nobody can get a job, why did a friend of mine just get a job working for a company that builds fracking materials for companies such as Shell? Another friend of mine works on the boats on the Beaver river. Shell claimed their would be no fracking, but they have not explained the amount of disturbance they will have on this area: noise pollution, light pollution, water pollution, and inevitably air pollution. They admitted the admissions of Carbon dioxide, but then claimed it would combust by the time it reached the atmosphere. They claim that the amount of carbon dioxide being emitted, however none of it is safe. What they say is a safe amount is false, and they are unreliable in the actual statistics of how much emissions they let out. They also admitted to a side effect also being acid rain: acid rain IS sulfuric acid. Concentrated (not diluted withy water) Sulfuric Acid is very acidic and will melt, and burn human skin. After experiencing direct contact in experiments (and by touching some of it with my own bare skin) I know the stuff is not okay, its not something to mess around with. Many do not realize the intense and enormous effects water pollution will have on us over the long run. It won’t be much longer before all of the water in this are is unhealthy- and we can not get that back. Tell shell to stay away- and tell them since they are so rich to invest in scientists who are actually trying to make this a cleaner way of energy living. Our energy consumption of over the top- many anthropologists from other nations have described American culture to be in the state of “over consumption”. Holistically, over consumption directly creates environmental degradation, this leads to farms producing less, this leads to politicization, which directly deals with disturbance in the government leads which deals with the people who are in need go to Globalization to seek alternate income or resources and this leads to (as the other commenter mentioned) increased crime rate, from seeking alternate income and resources. With increasing population growth as well, people are now desperate for income or resources which leads to a state of poverty, and this dives into commercialization. From there is circles back around in an endless loop of simply demanding to much of our environment, and ignoring the abuse of the land and resources.

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