West Virginia governor to meet with Shell officials week ending Jan. 27 to lobby for ethane cracker; state's House recently advanced bill that would slash property taxes for 25 years for any company that invests at least US$2B toward building cracker

Alison Gallant

CHARLESTON, West Virginia , January 24, 2012 (Associated Press) – Gov. Earl Ray Tomblin will fly to Houston this week as part of West Virginia's quest for a chemical plant that promises to deliver thousands of jobs, House Finance Chairman Harry Keith White told The Associated Press on Monday.

The Mingo County Democrat said his fellow delegates sought to aid that trip with Monday's ahead-of-schedule, nearly unanimous passage of Tomblin's tax break proposal meant to lure one or more "cracker" facilities. The House advanced the bill 93-1 to the Senate.

"He will take that bill with him to Houston by the middle or the end of this week," White told AP. "I don't want to say the company, but everyone knows that Shell is the primary company we're courting right now."

Tomblin officials declined to comment. They've previously said that West Virginia is negotiating with Shell and a second, as-yet-undisclosed company that each want to build a cracker plant in the Marcellus shale region. The U.S. subsidiary of Royal Dutch Shell PLC is based in Houston. A Shell spokeswoman declined to comment on Monday.

Ohio Gov. John Kasich also has reportedly visited Houston recently as his state, West Virginia and Pennsylvania compete for at least one of these plants.

A cracker plant converts ethane, a byproduct from Marcellus shale natural gas wells, into ethylene. This widely used chemical compound is a key component for the plastics industry, and also helps make a range of products including tires and antifreeze. With all three states hosting Marcellus shale wells, the industry says that these operations are yielding sufficient amounts of ethane to feed at least one cracker plant.

The American Chemistry Council has estimated that a West Virginia cracker would provide 8,000 construction-related jobs followed by 12,271 permanent direct, indirect and induced jobs. The latter would result from increased consumer spending from the other jobs, according to the trade group. It also puts the total resulting payroll at $729 million, and state tax revenues at $95 million.

Tomblin's proposal would slash property taxes for 25 years for any business that invests at least $2 billion toward building a cracker. It would apply to real estate as well as to machinery, equipment and inventory. Department of Revenue officials estimate that a $2 billion cracker plant would pay $1.5 million annually under the proposal, as opposed to $30 million during the initial year alone.

Delegate Jonathan Miller was Monday's sole House vote against passage. The Berkeley County Republican did not immediately respond to a request for comment on Monday. Before sending the bill to the Senate, the House had agreed 91-3 to suspend the constitutional rule that otherwise delays a vote on passage for three days.

The Senate Finance Committee is scheduled to take up that chamber's version of the proposal Tuesday. The Senate Economic Development Committee endorsed that version Friday.

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