Story by Danielle Smith
Shell is reportedly struggling to recoup its massive investment in Pennsylvania’s petrochemical sector, with weak fourth-quarter returns renewing concerns the project has underdelivered on jobs, growth and profits.
The company is seeking a buyer or partner for its Shell Polymers Monaca plant and may never fully recover its $14 billion investment in the venture, according to a report from the Ohio River Valley Institute.
Kathy Hipple, research fellow at the institute and the report's co-author, said data show Shell received a major state tax subsidy intended to build a regional petrochemical hub. The company has already collected about $90 million and could keep receiving roughly $60 million to $65 million a year if the company continues to purchase and process more than a billion gallons of ethane annually.
She pointed out Shell has begun to sell off tax credits intended to support the local petrochemical industry.
"By law, they are able to sell these tax credits," Hipple acknowledged. "So far, they seem to have sold 100% of the tax credits that they have received to other companies that are not in the manufacturing industry. They're usually in the insurance industry. Sometimes they're not even in the region."
Hipple noted the Pennsylvania Resource Manufacturing Tax Credit’s “lookback provision,” set to trigger in 2028, could allow legislators to reevaluate the flow of tax credits to Shell Polymers Monaca. Lawmakers can assess whether the facility has met its original objectives and if it has not, consider modifying the incentive.
Anne Keller, also at the institute, said the state’s tax credit structure was unusually generous. The program effectively gave Shell a five‑cent discount on every gallon of ethane feedstock the plant uses. She spoke with an industry analyst who explained lawmakers initially discussed capping the subsidy at 30,000 barrels per day but the limit never made it into the final legislation.
"The bottom line was that the plant use it, and that is a very, very significant discount for a plant like this," Keller emphasized. "These are big commodity manufacturing facilities and feedstock is one of the critical cost elements that allows them to be profitable."
The report stated Shell has not fulfilled its commitments for job creation or local economic development. Since the 2012 announcement of its ethane cr--ker project, Beaver County’s GDP has fallen 12%, the local population has dropped by 3%, and employment has declined more than 13%.
https://www.msn.com/en-us/money/markets/shell-failing-promises-as-it-seeks-exit-from-pa