Solobay: Tax Breaks Could Make Region 'Energy Capital of the East'

on Wednesday joined more than 30 representatives of government, labor and business who crowded the stage in the Capitol Media Center in support of tax breaks needed to lure a Shell Chemical ethane “cracker” plant to Beaver County.

Solobay, D-, was joined by Gov. Tom Corbett, state Sens. John Wozniak and Elder Vogel, along with state labor leaders and business groups for what speakers repeatedly called a “once-in-a-lifetime opportunity” to create a new industry in Pennsylvania.

“We continually hear from folks that we need jobs, we need low taxes and we need (low-cost) energy,” Solobay said. “This will accomplish all three.”

Since details of Pennsylvania’s offer of $1.7 billion in tax credits over 25 years emerged in published accounts, supporters of the deal have defended its cost and pressed for the Legislature’s approval before the summer recess.

Solobay compared the Shell opportunity with Pennsylvania’s tax credit aimed at the motion picture industry, which led to a boom in movie production in the state.

“That made us the Hollywood of the East and this could make us the Energy Capital of the East,” he said.

The news conference included a "rare coalition of business and labor groups supporting the effort to close the deal with Shell" the senator said in a release.

Representatives of Pennsylvania Manufacturer’s Association and the state Chamber of Commerce joined United Steelworkers and Pennsylvania State Building Trades officials in urging quick legislative action on legislation that would put the tax credits in place starting in 2017.

Both labor and industry leaders say Shell’s Beaver County proposal will create 10,000 construction jobs along with 500 permanent jobs and 10,000 jobs in spin-off industries, Solobay said in a statement. It could also create a petrochemical hub that would attract a growing number of similar proposals, he said.

Another local lawmaker, state , D-Cecil, related to the Shell issue Wednesday.

's legislation (H.B. 2493), would impose a small surtax on the production of natural gas for a new Energy Employment Legacy Fund. That fund would pay for tax incentives to industries that use ethane in manufacturing processes, including Corbett's $1.6 billion tax credit proposal for Royal Dutch Shell.

White said his measure would provide $66 million annually over a span of 25 years. The surtax would be applied to all Marcellus Shale natural gas producers that currently pay the per-well fee under Act 13 of 2012. The tax credit would be available to any manufacturer that purchases natural gas containing ethane as raw material for production.

To calculate the surtax, the allocated amount of $66 million would be divided by the number of producing wells. That sum would then be collected from each natural gas producer to which this applies.