In late 2018, states, cities, and coalitions of localities muddled together every imaginable hand-out, tax break, and financial incentive they could muster to attract a $5 billion Amazon “HQ2” investment to their preferred locale. Engineers drew up unsolicited renderings, politicians pandered to entice site selectors, and countless media stories stirred anticipation to guess where Jeff Bezos would land. Global news outlets dubbed it “The Amazon Hunger Games.”
Then, the long-awaited announcement came after 238 cities placed bids stuffed with cash, new public transportation proposals and publicly-funded infrastructure. The new location would be split into two: New York, NY and Arlington, VA, two of the wealthiest locales in America. But then, citing “local opposition,” Amazon canceled the plans in New York and instead chose to focus on what was now a $2.5 billion project in Arlington. This was the largest financial news story of 2018, and it carried well into 2019 until the Covid-19 pandemic sucked up all the media attention.
So here’s a question: Why haven’t you heard about an incoming investment project coming to Luzerne County, Pennsylvania, that is more than twice the size of Amazon’s HQ2 project — and will serve a regional economy in much greater need of good-paying jobs?
Most people don’t know that Texas-based Nacero announced plans to construct a $6 billion plant in Northeast Pennsylvania, sustaining 4,000 construction jobs for six years, and creating hundreds of manufacturing jobs that will revitalize our region’s economy. The facility will turn methane into fuel for your motor vehicle that is at least twice as environmentally beneficial than what you are pumping now, using domestically-produced natural gas from Pennsylvania. In Philly-speak, a $6 billion investment is the equivalent to four Citizens Bank Parks, four Wells Fargo Centers, and three Lincoln Financial Fields — combined.
So why has much of the media missed reporting on Pennsylvania’s largest economic story of 2021? Is it because utilizing fossil fuels in the cleanest and most responsible way doesn’t make for good click-bait? Is it because these family-sustaining jobs, mostly union labor, are not of interest to elite journalists? Does news outside of metropolitan areas not make headlines? Or is it simply that good news doesn’t garner headlines?
It’s hard to know — but the story of the Nacero investment in Luzerne County is a game-changer, economically and environmentally.
The plant will convert Marcellus Shale natural gas into zero-sulfur gasoline for use in existing cars and trucks, with no modifications needed. The raw material most needed is pure methane, and there’s an abundance of “dry gas” that meets this need in Northeast Pennsylvania, formerly a coal region that has seen raw materials outputs decrease in recent decades. In fact, Susquehanna, Wyoming, and Bradford counties are the largest producers of Nacero’s “feedstock” in the entire United States. It’s right here in our commonwealth.
The Marcellus Shale gas harvested in Northeastern Pa. is a dry gas, nearly all of it pure methane. Methane is used in natural gas synthesis manufacturing plants to create hydrogen and nitrogen in the form of ammonia and urea, two essential products in modern manufacturing.
The plant, which will be built on a former coal site of approximately one thousand acres of mine-scarred land, will also be an environmental boon for the former coal region. By reclaiming this former industrial site, sources of acid mine drainage will be mitigated from entering creeks, streams, and ultimately the Susquehanna River, all while providing economic restoration to an area that desperately needs investment.
The plant, which will be built on a former coal site of approximately one thousand acres of mine-scarred land, will also be an environmental boon for the former coal region.
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And unlike the government handouts that drove the Amazon discussion, Nacero will utilize a production-based tax credit passed by the Pennsylvania General Assembly enabled by Act 66 of 2020. The key difference here is that production-based credits are only awarded after a product is made, meaning that all the upfront investment in the plant itself (the construction wages, manufacturing plant hires and logistics chains) are in place and operational before any taxpayer subsidies kick in.
“The Nacero project is a monumental economic and environmental win for our commonwealth,” says Pennsylvania Manufacturers Association President and CEO David N. Taylor. “This is precisely the type of investment Act 66 of 2020 was designed to attract: one that will spur an economic transformation in Northeast Pennsylvania.”
Incentives that work
Two Luzerne County lawmakers are primarily responsible for the passage of Act 66, the Local Resource Manufacturing Tax Credit. State Rep. Aaron Kaufer (R-Luzerne) introduced the bill in the House, and state Senator John Yudichak (I-Luzerne/Carbon) was one of its biggest champions in the Senate.
“This is about clean energy jobs,” Yudichak said at a news conference announcing the plans for the new plant. “Nacero will fuel the plant with 100 percent renewable energy. They will use natural gas — our abundant, clean-burning natural gas — as a feedstock to produce a gasoline that is zero sulfur emissions and 50 percent less CO2 emissions.”
The tax credit law is modeled on a 2012 bill that enticed Shell Chemical Appalachia to build the multi-billion dollar Pennsylvania Petrochemicals Complex in Beaver County, currently the largest construction project in North America.
Additional natural gas projects are sure to come and bring thousands of jobs downstream — healthcare, restaurants and entertainment to serve the workers and their families.
“The backward linkage shows how much additional output is generated by a dollar’s worth of final demand for each industry,” the Pennsylvania Manufacturers’ Association notes. “Every dollar in final sales of manufactured products supports $1.33 in output from other sectors — this is the largest multiplier of any sector. Manufacturing plants… have a powerful and positive impact on economic development.”
The Nacero project is especially rewarding for local lawmakers as they have been battling a campaign by environmental extremists, mostly through litigation, to shut down Pennsylvania’s energy industries.
“Five economic development projects tied to Pennsylvania’s robust natural resources have been shut down by environmental extremists and their allies in the legislature over the last three years,” Yudichak says. “Communities across Pennsylvania have lost over $5 billion in economic development opportunities and millions of dollars in state and local tax revenue… [and unions] have been denied millions of work hours that would have provided good-paying jobs to thousands of union families.”
In Pennsylvania, the projects gone or suspended include a UGI pipeline that would have created an estimated 12,000 jobs, and a $1.5 billion upgrade of U.S. Steel’s Mon Valley Works that would have created 1,000 construction jobs. Both projects, Yudichak says, were “besieged by endless litigation from environmental zealots and outright opposed by activist legislators who want to stop the creation of any job connected to the natural gas industry.”
But what do the radicals gain from their fanatical opposition? Nothing but unnecessary economic misery for everyday citizens to support their political agenda.
But the Nacero project is clearly a major economic and environmental win, based in reality and ready to catapult Pennsylvania into a greener, cleaner future. What’s better than manufacturing a product in a clean manner, with little to no emissions, completely domestically?
Projects such as the Nacero plant are a win for Pennsylvania’s economy and environment. Here’s to hoping this is just the first of many announcements of this kind. And here’s to hoping that next time those projects are announced, they will be met with Amazon-level media hype.
Carl A. Marrara is the Vice President of Government Affairs at the Pennsylvania Manufacturers’ Association.