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State still in mix for cracker

CHARLESTON, W.Va. -- West Virginia won't likely learn until mid- or late February where energy giant Shell will locate a huge new chemical plant tied to Marcellus Shale natural gas drilling, but the state remains in the running both for it and a second "cracker" plant planned for the region, a top Tomblin administration official said Wednesday.

Commerce Secretary Keith Burdette told a House committee that a member of Shell's site search team recently commented on how "West Virginia has been so far ahead of the mix in identifying this as an opportunity."

"That's high praise," Burdette said. He also said, "I'm feeling good about this, and I think the state should feel good about this. We are absolutely in the mix, and we are going to be a decidedly important player."

The committee, which oversees energy, industry and economic development issues, had just endorsed Gov. Earl Ray Tomblin's proposal meant to boost the state's chances at attracting a cracker plant. It would slash property taxes on such a facility for 25 years, if at least $2 billion is invested toward it. The committee advanced the bill to House Finance.

Tomblin's Department of Revenue estimates that a $2 billion plant would create 12,000 jobs, both direct and indirect as well as induced by increased consumer activity. That estimate also puts the resulting annual wages at $600 million.

"Imagine the psychological euphoria West Virginia would have, that the other states were looking to us because we got it," Delegate Carol Miller, a Cabell County Republican, said during Wednesday's meeting.

Pennsylvania and Ohio are competing fiercely as well for these plants, which would "crack" or convert ethane. Wells that tap the region's mile-deep Marcellus Shale natural gas reserve are pumping out suitable amounts of this compound, industry officials say. It can be converted into ethylene, which can help make an array of products including plastics, tires and antifreeze.

Besides Shell, a subsidiary of Netherlands-based Royal Dutch Shell PLC, a second as-yet-unidentified company is also searching for a cracker site in the Marcellus region, Burdette said. It has been quiet about its review process, but has also "done a lot of that due diligence in advance," Burdette told the committee.

"My optimism about the state of West Virginia attracting one of these facilities is very, very good," Burdette said. "I am optimistic that we can literally attract both."

Burdette also said that while much of the focus has been on a cracker, the real prize is what will follow.

"It's a big facility, it's a big investment, but it's one facility," he told lawmakers. "It's the downstream plants that will manufacture products associated with the materials that will [be] manufactured at these crackers that will change the economy of West Virginia, and certainly the manufacturing economy of West Virginia."

Burdette estimated that this related industry would emerge within 150 miles of a plant. As a result, no one state will reap all the economic rewards.

"We believe the sites in West Virginia will impact Ohio and Pennsylvania almost as much as they impact us," Burdette said. "It's the nature of being along the river."

 

 


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