Tuesday, November 5, 2013

Shell Cracker Jobs?




I was reading the paper the other day…well online …  It was a story about the Shell Cracker plant.  

I am a little jaded when it comes to this plant due to the heavy subsidization and the exaggerated claims of job creation it will bring.  I understand the technology, the market and the potential for spin off businesses using the product, but in the end this plant will receive $1.65 Billion in subsidy and have roughly 170 full time employees.  Those are the facts.

Corbett and the Republicans are quick to say they don’t believe in subsidies, or ‘picking winners’ but this is apparently only when they are talking about things that are not close and dear to their party line or when it does not involve a major donor to their reelection campaigns.  I can’t see any other way to spin it that Corbett is helping to create 170 jobs in the gas industry at a cost of $1.65 Billion or $9,700,000 per job.  

I realize the gas industry is cash strapped and on life support  and Shell only made $25.1 Billion in profits in 2012 so subsidy is completely necessary to get them to invest in a plant in Western PA…which happens to have more fuel under it than Saudi Arabia and the most cost effective place to build a cracker plant…  So it is good Corbett is giving them $1.65 Billion to create these 170 full time jobs.

What I found funny is the article talked about the site location they chose.  Shell is building on the site of an existing Zinc plant that employs 600 people.  These 600 people are losing their jobs to make room for the 170 jobs created by the Shell subsidy.  I find this very funny.  Corbett will create a net -430 jobs with the $1.65 Billion in tax payer money. 

In doing some research, the Zinc plant had an explosion in 2010 killing two and damaging the plant.  They then did an assessment to determine whether to build a new environmentally friendly plant here at the same location in Beaver or to move the plant out of state.  They decided to move it out of state, a decision made easy with the proposed sale to Shell.  I guess I don’t understand why Corbett didn’t subsidize this plant that was already here and employing 600 people?  He would have saved the 600 jobs instead of costing a net 430 jobs at a bargain price.  I imagine Zinc is not as good a donor as gas.

In another article Corbett claimed he was ‘bringing back the PA Sunshine solar program…that he has cancelled.  

"Last January, Gov. Corbett brought back the Sunshine Solar Program, and
since then, the state has invested more than $6 million into local economies
in the form of solar rebates," DEP Acting Secretary Chris Abruzzo said. "We
encourage Pennsylvania's residents and small business owners to not delay in
taking advantage of this funding before the program expires."

He is correct that you need to act fast before the program ends but it doesn’t expire.  It is being closed by Corbett even though its funds are not depleted.  And he didn't 'bring it back' he released the funds originally allocated to the program that his administration held up and was trying to redirect for gas and other projects.  The PA Sunshine program is the smoothest running program in PA history.  It has only one full time employee, Walt Dinda and has processed thousands of incentives totaling nearly $100 million in the past five years.  Due to the assistance of this program, PA now has over 4000 solar jobs.  4000 jobs for $100 million compared to Corbett’s 170 jobs for a single project at a cost of $1.65 billion.  The PA Sunshine program has created 4000 jobs at a cost of $25,000 per job verses the Shell plant that will cost taxpayers $9.7 million per job.  If you think the $25,000 per job is high for solar, please see an earlier blog showing the true economics of solar jobs and economic impact.  For Shell to do the same thing they will have to pay a ton of money to those 170 lucky folks.  

Protecting solar jobs in PA by closing the SREC borders like all of our neighboring states already do is ‘picking winners’, extending the AEPS to match that of neighboring states is picking winners, subsidizing solar through the PA Sunshine or any other program is picking winners, Community Energy through solar is picking winners…but all of this which created 2300% as many jobs as the Cracker plant has cost the taxpayer less than 1% of the subsidy given to one single company, Shell, for one single gas project. 

I guess I am confused on a few things.  I need to look up the definition of ‘Picking Winners’ and ‘Hypocrisy’.  I am confused on the meaning of both…either that or Corbett is.   

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