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W.Va. officials see benefits from Pa. cracker site

Thu, 03/15/2012 - 9:50am
LAWRENCE MESSINA - Associated Press - Associated Press

West Virginia officials said Thursday they are disappointed with Shell's decision to locate a multibillion-dollar chemical processing plant in neighboring Pennsylvania, but believe the site 12 miles from the border will still provide jobs and economic development for the state.

The Monaca, Pa., location means West Virginians will likely help build and operate the "cracker" facility, which would convert or crack a byproduct of nearby Marcellus shale natural gas drilling into a widely used chemical compound, said Rob Alsop, chief of staff to Gov. Earl Ray Tomblin.

Perhaps more importantly, West Virginia also is well-positioned to fill the much-touted jobs supplying the plant and making products from what it processes, Alsop said.

"We do believe there will be huge downstream opportunities for West Virginia," Alsop said.

The state also remains in the running for at least one additional cracker plant, he added. Administration officials have been negotiating with an as-yet-unidentified company that's considered sites along the Kanawha River and in the Parkersburg area.

Aither Chemical, meanwhile, has lobbied West Virginia officials for help building a smaller-scale cracker facility in the state. The South Charleston company is developing an alternative, less costly technology for the cracking of ethane molecules into ethylene.

A spokesman for Bayer Corp., which owns the West Virginia industrial parks along the Ohio River, has also said his company has had discussions with more than one company that's interested in building a plant.

"There are other companies that are still looking to locate a cracker," said Karen Price, President of the West Virginia Manufacturers' Association. "West Virginia has good sites, and the state is in good shape. We just need to keep plugging along ... The downstream opportunities will be there for West Virginia to grow our manufacturing base in the Northern Panhandle."

But West Virginia aggressively sought to land the cracker planned by Houston-based Shell, the U.S. subsidiary of Royal Dutch Shell PLC. The first bill to pass during this year's legislative session was Tomblin's proposal to slash property tax rates for 25 years in exchange for at least $2 billion worth of investment toward a cracker facility.

Pennsylvania offered 15 years of tax breaks, while Ohio also reportedly courted Shell with major incentives. Ohio Gov. John Kasich flew down to Houston late last year. Tomblin traveled there in February after the Legislature approved West Virginia's tax incentive.

"We're obviously disappointed by the decision, but we believe we made the best and most competitive offer for West Virginia to be considered," Alsop said.

Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia, agreed that "all is not lost." Burd said the governors of all three states "would have liked to have had the trophy catch."

"But the absolute reality is that the entire region — 100 miles in any direction — is going to directly benefit from the location of those plants," Burd said.

He pointed to a Toyota plant in Georgetown, Ky. as an example: Ancillary businesses have sprung up within a 200-mile radius of the factory, bringing jobs and prosperity.

"The same will be the case with the cracker plant. There will be all types of ancillary facilities built, to serve that facility to take products from that facility," he said.

Tomblin administration officials have said Shell considered West Virginia sites around New Martinsville, on the Ohio River in Wetzel County and points northward. Those potential locations included Hancock County, near the Mountaineer Casino, Racetrack and Resort.

Alsop said the administration's goal remains harnessing interest in Marcellus shale to revive the region's chemical manufacturing industry and spur other economic development. He cited the legislation passed late last year setting regulations for drilling and operating wells in West Virginia's share of this huge natural gas reserve.

"We want to see the petrochemical industry rebuild, and it's going to take all three states to do that," Alsop said. "We're a step closer to that reality, and West Virginia is going to benefit from it."

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Associated Press Staff Writer Vicki Smith in Morgantown contributed to this article.

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