Bill potentially allocating billions in subsidies to future petrochemical facilities clears Pa. legislature | News | Pittsburgh | Pittsburgh City Paper

Bill potentially allocating billions in subsidies to future petrochemical facilities clears Pa. legislature

click to enlarge Bill potentially allocating billions in subsidies to future petrochemical facilities clears Pa. legislature
CP photo: Jared Wickerham
The site of a Shell ethane cracker plant, shown under construction in 2018, in Monaca, Pa.
After a highly publicized disagreement between Pittsburgh Mayor Bill Peduto and Allegheny County Executive Rich Fitzgerald over the future of the petrochemical industry in the region, many elected officials in Allegheny County stayed silent.

Peduto argued against new petrochemical facilities, aka cracker plants, coming to the Pittsburgh region. He supported winding down fracking in the area and instead focusing on the area’s tech and corporate sector. Fitzgerald voiced support for the industry and said it was important for the economies of counties outside of Allegheny.

Pittsburgh City Paper sought to get area politicians’ thoughts on the disagreement over the region’s economic direction, but the majority of politicians didn’t indicate which way they landed on the support for future cracker plants and the continuation of fracking.

Today, a bill that passed through Pennsylvania’s General Assembly sheds light on that support. And more than a dozen that were silent before, supported a bill that, if enacted, will provide potentially billions to companies looking to build out the petrochemical industry in Pennsylvania.

HB 1100 passed through the state House and Senate with broad bipartisan support, by a vote of 157-35 in the House and 39-11 in the Senate. Only five out of Allegheny County’s 28 state legislators voted against the bill; 16 backed it and two didn’t vote.

The bill would provide tax breaks to petrochemical companies that produce a capital investment of $450 million or more, and at least 800 jobs. Originally, the requirements were higher, but they were amended by state Sen. John Yudichak (I-Luzerne) to allow more businesses to apply for the tax credits.

The Pennsylvania Department of Revenue estimates that the tax credit program will cost the state approximately $22 million per plant per year, until 2050. Before the bill was amended, the estimated cost of the bill was more than $1 billion over 10 years.

Zach Barber of statewide environmental group PennEnvironment criticized Democrats and Republicans who backed this bill. PennEnvironment opposes future cracker plants and the continuation of fracking in the state.

Industry boosters claim fracking and cracker plants will lead to a surge in well-paying jobs. But the natural gas industry has been claiming a boost in manufacturing jobs since it began fracking in the early 2010s, and none have materialized.

The first cracker plant in Beaver County, built by oil giant Shell, received $1.6 billion in state subsidies. Barber is skeptical of handing out massive subsidies again to other large oil and gas companies.

“It is the type of government handout that Harrisburg has been willing to make to some of the richest companies and dirtiest companies in the world,” says Barber. “And most support is coming from people who support less government spending. I find it surprising.”

In a press release, House Speaker Mike Turzai (R-Marshall) said, if enacted, HB 1100 will similarly allow for the repurposing of abandoned manufacturing sites into petrochemical facilities like the one in Beaver County.

The Beaver County plant will refine natural gas, which is fracked from all over Southwestern Pennsylvania, into pellets, which can be used to make plastic products. The development has led other oil and gas companies to strongly consider the nearby Ohio River Valley as a location to host several more cracker plants.

The Beaver County plant is permitted by the state to emit 2.2 million tons of carbon dioxide each year, the equivalent of adding more than 480,000 cars. Pittsburgh already has some of the worst air quality in the nation. Fracking has been linked to a myriad of health issues, like asthma, fatigue, high-risk pregnancies, migraines, and skin disorders. In 2018, a natural-gas well exploded just 60 miles from Pittsburgh and emitted more than 57,000 metric tons of methane, which is more than the annual totals emitted by the oil and gas industries of France, Norway, and the Netherlands combined.

The plant has created about 6,000 temporary construction jobs and will employ about 600 permanently when it is completed.

HB 1100 is part of a package of bills sponsored by Republicans called Energize PA. The package is meant to provide tax breaks and subsidies to the natural gas and petrochemical industries and is a counter to Gov. Tom Wolf’s (D-York) push to install a severance tax on natural-gas drilling and use the funds to build infrastructure projects.

Allegheny County legislators who voted for HB 1100 include state Sens. Jim Brewster (D-McKeesport), Wayne Fontana (D-Brookline) and Pam Iovino (D-Mt. Lebanon); and state Reps. Frank Dermody (D-Oakmont), Bob Brooks (R-Murrysville), Austin Davis (D-Mckeesport), Daniel Deasy (D-West End), Tony DeLuca (D-Penn Hills), Valerie Gaydos (R-Sewickley) Bill Kortz (D-Dravosburg), Anita Kulik (D-Kennedy), Brandon Markosek (D-Monroeville), Robert Matzie (D-Ambridge), Dan Miller (D-Mt. Lebanon), Natalie Mihalek (R-Upper St. Clair), Lori Mizgorski (R-Shaler), Jason Ortitay (R-Cecil), Mike Puskaric (R-Jefferson Hills), Adam Ravenstahl (D-North Side), Harry Readshaw (D-Carrick), and Turzai.

State Reps. Ed Gainey (D-East Liberty) and Jake Wheatley (D-Hill District) did not vote on HB 1100.

Wolf told the Pennsylvania Capital-Star that he plans to veto the bill, but the support for the bill cleared a veto-proof majority. If Wolf does veto, legislators can vote again to override his veto.

Allegheny County legislators opposed to the bill include state Sens. Jay Costa (D-Forest Hills) and Lindsey Williams (D-West View); and state Reps. Dan Frankel (D-Squirrel Hill), Sara Innamorato (D-Lawrenceville), and Summer Lee (D-Swissvale).

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