Science & Technology
7:15 pm
Tue June 5, 2012

Corbett Offers Tax Break to Shell

In March, Shell Oil announced it was considering building a multi-billion dollar processing plant in Pennsylvania. Governor Tom Corbett wants to give Shell a $1.7 billion tax break to convince the energy giant to build an ethane cracker plant in Beaver County that would be used to convert natural gas compounds into chemicals used to make plastic.

Lieutenant Governor Jim Cawley said Shell is still negotiating with the Corbett Administration on the exact terms of an agreement.

"What we agreed to two months ago — what Shell announced two months ago, I should say — it wasn't an agreement, necessarily," Cawley said. "[It] was that they would stop their due diligence in Ohio and West Virginia, and focus exclusively on the Beaver County site."

Shell has already been granted a 15-year state tax exemption on the site, and said the new tax break, spread over 25 years, is one of a variety of economic factors it is considering.

Both Corbett and Cawley said the cracker would help revitalize western Pennsylvania's industrial economy, but Democrats are raising questions about the giveaway, pointing to the $31 billion Shell earned last year as proof the company does not need more tax breaks.

House Minority Leader Frank Dermody (D-Allegheny County) is hesitant to pass such a large tax break, without a more firm commitment from Shell.

"There are revenues that would be in the budget normally that won't be there. There are tax credits that are being given to these corporations. That's all well and good, but at this unprecedented rate," Dermody said, "we ought to make sure that the jobs are going to be there."