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Cracker plant jobs claim may be way off

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By Timothy Puko
Friday, June 15, 2012, 10:10 p.m.
 

The jobs created by a proposed petrochemical plant in the region could be less than half of what Gov. Tom Corbett and state leaders have been touting, according to new numbers from a member of Corbett's cabinet.

There are likely to be 6,000 to 8,000 new permanent jobs if and when Royal Dutch Shell plc opens a plant in Beaver County, according to data from the Department of Labor & Industry. That includes about 400 workers at the plant and thousands of others grown across several sectors from manufacturing to retail.

State leaders consistently have claimed there will be 10,000 to 20,000 new permanent jobs as part of a pitch for a $1.65 billion tax credit for Shell and related industry.

As recently as Thursday, Corbett posted on his Twitter feed, "A crackerplant would create up to 20,000 permanent jobs in Southwest PA."

The governor stands by those numbers, spokeswoman Kelli Roberts said on Friday when asked about the discrepancy. They were based on a report from the American Chemistry Council, a chemical industry group, she said. It estimated 17,000 new American jobs if a company spent $3.2 billion to build an ethylene production plant in Pennsylvania.

Labor & Industry's research isn't finalized, and Corbett has been using the industry's numbers because they're the best available, Roberts said.

"We aren't inflating the numbers," she said. "Those were the first numbers to be concrete. So we have been using and continue using (them). What we're looking at, it's almost an impossible number to nail down."

The secretary of Labor and Industry, Julia K. Hearthway, said at a news conference in Beaver County on Thursday that a cracker plant in the state could create almost 15 new permanent jobs for one permanent job at the plant itself.

Shell officials told state leaders to expect more than 400 permanent jobs at the plant. Using Hearthway's figures and 400 to 500 new employees at Shell, that would mean 6,280 to 7,850 new permanent jobs across several industries, from manufacturing to retail.

Hearthway's press secretary Sara Goulet confirmed those numbers yesterday. Previous estimates from other state officials included temporary jobs from the plant's construction, and that was a mistake, she said.

"I think you have to look back to what (Hearthway) said (Thursday): There are stages and there will be additional industry coming in," Goulet said when asked about the discrepancy. "Of course, these are estimates, so we don't really know how many people are going to need to be hired. ... We can't even say how many would be permanent," she said.

"I'd like to think it's (the job estimates) not a purposeful effort to deceive the public ... but it's a dangerous game. I think a better tactic is to under-promise/over-deliver, not over-promise/under-deliver," said David Masur, Philadelphia-based executive director of PennEnvironment and one of the most outspoken critics of the tax credit. "It's more like they're a kid in a candy shop. Their eyes just keep getting bigger and bigger.

"It's probably icing on the cake on why this decision shouldn't be ramrodded through like this," Masur said. "When you're talking about billions of dollars of the taxpayers' money, you want to have the real facts before you make a decision."

Job creation estimates have been an important part of Corbett's sales pitch for the $1.65 billion tax credit Shell officials asked for to help them build in Pennsylvania. Shell Oil Co. watched Pennsylvania, Ohio and West Virginia compete for its business before announcing a land deal in Beaver County in March. State lawmakers passed new rules so Shell could be free from all state and local taxes if they build there, in Center and Potter.

State officials have yet to estimate the value of the tax-free zone. Critics bombarded the administration after word leaked of the governor's second tax-break proposal worth $1.65 billion. Some say the two programs together are too much of a giveaway for a company that made $31 billion in profits last year.

The tax credit -- capped at $66 million annually in Corbett's plan -- would go to Shell and other companies that buy or sell ethane from Pennsylvania and process and work with its byproducts in the state. That ensures Pennsylvania would get all the job growth -- from drilling to processing to petrochemical manufacturing -- its boosters claim.

The administration has yet to satisfactorily detail not only the job estimates, but how it would define in-state operators and enforce those requirements, said Senate Minority Leader Jay Costa, D-Forest Hills. Democratic leaders are meeting with Community and Economic Development Secretary C. Alan Walker and state Revenue Secretary Dan Meuser on Monday about those issues.

"A lot of questions have not been answered that we need answers to," Costa said. "But let me say, 6 to 8,000, it's important to note the nature of those jobs ... you're talking about positions that are very high-quality, family-sustaining positions. That's a significant statement."

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