Shell's Ethane Cracker Could Hinge On Act 13 Decision

Marie Cusick

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Marie Cusick was the Harrisburg reporter for StateImpact Pennsylvania.

December 17, 2012 | 11:44 AM

Back in March, 2012 Shell Oil Co. announced that it was interested in building an ethane cracker at a site near Monaca, Beaver County. The processing plant would break up oil and natural gas into smaller molecules to create ethylene, which is a compound used to manufacture plastics.
The project has been hailed by Governor Corbett as a much-needed job creator, which would draw on the state’s vast natural gas reserves. The plant would employ between 400 to 600 people; and according to an industry-funded study, it could create up to 20,000 indirect jobs.
Pennsylvania competed against Ohio and West Virginia to lure Shell by offering what amounts to a $1.65 billion dollar tax credit over the next 25 years —the largest in state history.
But despite the incentives, the ethane cracker isn’t a sure thing yet. As a year-end deadline draws near, Shell’s final decision may hinge on how the state Supreme Court rules on whether Act 13 can restrict local governments from zoning drilling operations, according to Capitolwire:

Shell told some of the top state officials it has met with, but not others, that it has concerns about the forthcoming Act 13 decision by the Pennsylvania Supreme Court. A lower court tossed state restrictions and automatic appeals to the state from ‘unreasonable’ zoning restrictions on shale drilling operations. The Supreme Court is expected soon to either restore that part of the shale regulation and impact fee law, or uphold the lower court.
The shale industry says this could make them pull drills out of Pennsylvania, even though about half of the state has no zoning restrictions.

It’s unclear when the Pennsylvania Supreme Court will issue a ruling on Act 13. Earlier this year, the Commonwealth Court ruled that the portions of the law that restricted local governments’ abilities to zone drilling operations violated the state constitution. The Corbett Administration appealed the decision.