Governor Corbett supports tax benefits for ethane plant
6/6/2012 | Real Estate Blog
In our previous post, we mentioned that Chesapeake Energy Company will soon be pursuing a new policy of increased natural gas drilling on Marcellus Shale real estate. The Marcellus shale, as our readers may know, is the largest of several shale formations that have become sites for oil and gas production in recent years following upon advanced techniques in hydraulic-fracturing.
Chesapeake Energy’s new policy is part of an effort to improve the company’s financial situation, but has raised the concerns of environmentalists and other critics. Governor Tom Corbett’s office, as we noted, has been pushing for a measure which indirectly encourages the company’s new policy.
An issue related to Chesapeake’s new policy is Corbett’s recent advocacy of future tax credits for a petrochemical refinery planned by Shell Oil Co. in western Pennsylvania which seeks to capitalize on growing natural gas drilling in the regions of the Marcellus Shale.
The Shell plant would be an ethane cracker, which would be involved in manufacturing raw materials for plastic.
Corbett’s administration is reportedly seeking approval from lawmakers to show willingness to share the costs of the project, which is projected as a multibillion endeavor. The credits, which would be worth almost $1.7 billion for the 25 years they would be in place, would not be available until 2017.
The goal, according to Corbett, is to encourage the growth of an industry that would create jobs and help revitalize the economy.
Of course, there are environmental and public health concerns that go with the growth of the natural gas drilling industry. In addition, the expansion of the industry has come at the cost of taking zoning decisions out of local control. There has been a lively debate about whether the costs are worth the benefits to the state of Pennsylvania.
Source: Businessweek, “Shell May Get Pennsylvania Tax Windfall For Ethane Plant,” Romy Varghese, June 4, 2012