SCRANTON (TNS) — State legislators want to make natural gas the new coal industry in Northeast Pennsylvania.
“You are talking large manufacturing that we haven’t seen in a long, long time,” said state Rep. Aaron Kaufer, comparing it to the coal industry of the past.
The state House of Representatives recently voted 139-46 to pass House Bill 1100, which would offer a tax credit of up to 20% for energy and fertilizer manufacturing. Kaufer was the bill’s prime sponsor.
State senators still have to vote on the bill, and Gov. Tom Wolf has to sign the legislation before it can go into effect.
The manufacturing plants would convert methane from the region’s dry natural gas into ammonia, urea or methanol. Ammonia and urea are commonly used in fertilizer, and methanol is a solvent used in windshield wiper fluid, cleaning supplies and other products, said Tom Gellrich, founder and CEO of TopLine Analytics. TopLine works with organizations to understand the effects of shale gas in the chemical industry, he said.
To be eligible for the tax credit, which translates to getting $1 back for every $5 of tax revenue, firms will need to invest at least $1 billion in the plant and create at least 1,000 full-time construction jobs while the facility is built, according to the bill.
“It’s a huge opportunity for Northeast Pennsylvania,” Kaufer said. “Those are good-paying manufacturing jobs.”
Firms are eyeing the Upvalley as a potential spot for the facilities, but everything is preliminary, said state Rep. Marty Flynn, D-113, Scranton.
“It looks very probable in the future, once that tax credit becomes law,” Flynn said.
After construction is complete, Gellrich estimated a plant with a $1 billion investment would employ about 150 workers with an additional three to four contractors for every worker. The industry pays well, and a worker with a two-year degree would likely start at $60,000 to $65,000 a year with full benefits, he said. Employees with four-year engineering degrees could make $120,000 to $140,000, Gellrich said.
Locally produced fertilizer also means reduced costs for area farmers, he said.
The legislation mirrors a bill that offers tax credits to wet natural gas “cracker” plants, Kaufer said. Shell Oil Company is constructing a $6 billion cracker plant in Beaver County that would crack ethane molecules from wet natural gas and use it to make plastic.
The natural gas facilities are considered very safe for the environment, Kaufer said.
“The impact is minimal, and we don’t expect there to be any environmental concerns,” he said.
Bernard Goldstein, M.D., a professor emeritus of environmental and occupational health at the University of Pittsburgh, said he is not worried about crackers and plants affecting the environment.
“What I am worried about is the fact that we just don’t have enough oversight over our shale industry,” he said.
A $1 billion facility will have more governmental oversight than fracking sites, making fracking a bigger potential polluter, he said. Cracker plants and natural gas manufacturing could increase the demand for the gas, leading to more fracking, Goldstein said.
Fracking poses potential risks including water contamination and air pollution, among other concerns, according to the National Institutes of Health. Methane is a harmful greenhouse gas — more potent per molecule than carbon dioxide, Goldstein said.
“In terms of greenhouse climate considerations, there’s a lot of methane coming out from the fracking and from the transport of the natural gas,” he said.
Goldstein also questioned the need to incentivize companies with tax credits. Plants will use a tremendous amount of natural gas, which means it’s easier to place the manufacturing facility near a natural gas source compared to using a lengthy pipeline to transport the gas, he said.
“You start with a situation in which you’ve got a desirable activity occurring because of a fixed site,” he said. “The gas isn’t going anywhere else.”
He added that if state leaders can say, for example, Texas is competing with Pennsylvania for a large plant and is willing to offer incentives, “they’re at least being consistent with this being an economic incentive that’s needed to attract jobs.”
The chemical industry has grown significantly because of the shale gas boom, and the Gulf Coast has more than 300 shale gas-related projects announced or underway with only one in Pennsylvania — Shell’s cracker plant, Gellrich said.
“You need to give them an incentive to change,” he said. “You need to get on the map.”