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West Virginia Governor Signs Ethane Cracker Bill

West Virginia Gov. Earl Ray Tomblin signed a bill Thursday that offers tax breaks to companies that build an ethane cracker in the state, then jetted off to Houston to meet with Royal Dutch Shell plc executives about their plans to possibly build such a facility in the Mountain State.

"I have met with multiple investors multiple times to discuss their desire to invest in new ethane crackers in our region," Tomblin said before leaving for Houston. "My administration and I will continue to meet with these investors, and I will do all that I can to attract these transformational, multi-billion dollar investments to West Virginia."

The bill, HB 4086, enjoyed near-unanimous support in the West Virginia Legislature, passing the Senate 33-0 on Wednesday and the House of Delegates 93-1 on Monday (see Shale Daily, Jan. 26; Jan. 25).

"I want to extend my gratitude to members of the legislature and their respective clerk's offices for not only passing this important piece of legislation, but for speedily reviewing the bill," Tomblin said. "Today we are sending a message that West Virginia wants to be a partner with potential investors and bring jobs to West Virginia."

Under HB 4086, capital investments specifically made in the natural gas liquids extraction industry totaling $2 billion or more would qualify for a 5% salvage value tax treatment for the facility's first 25 years.

Shell has proposed building a "world-scale" ethane cracker -- a facility that would create thousands of jobs -- with a capacity to process between 60,000-80,000 b/d in the Marcellus Shale region, either in Ohio, Pennsylvania or West Virginia (see Shale Daily, Dec. 5, 2011; Sept. 7, 2011; June 7, 2011). The company said it was still evaluating what products to make at the facility, but the leading option is polyethylene.

HB 4086 was submitted by Tomblin on Jan. 17, just days after his state of the state address on Jan. 11, when he vowed to do everything in his power to attract an ethane cracker to West Virginia (see Shale Daily, Jan. 17).

Two nonprofits -- Renewable Manufacturing Gateway and Aither Chemicals LLC -- have announced they will collaborate to build a $750 million facility in either Ohio, Pennsylvania or West Virginia (see Shale Daily, Jan. 19). Meanwhile, citizens and state officials are making their own efforts to attract an ethane cracker (see Shale Daily, Dec. 15, 2011; Aug. 26, 2011; July 18, 2011; May 6, 2011; Dec. 23, 2010).

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