President's Column

President of the Senate and Lt. Governor, Jeffrey V. Kessler

Date: 01/26/2012

Cracker Bill Passes

The third week of the 2012 Regular Session was highlighted by the swift passage of historic legislation that could potentially enhance West Virginia’s economy for many years to come.

This week in the Senate, we suspended the constitutional rules on Jan. 25 to quickly pass House Bill 4086. This bill will allow ethane cracker plant investments of $2 billion or more to be assessed at their scrap value, or 5 percent of their actual value, and it would be in effect for 25 years. Revenue officials estimate that a company that invests that much would pay $1.5 million annually, as opposed to nearly $30 million in the first year alone.

The swift passage of this bill sends a clear and resounding message that West Virginia is not only open for business, we are ready to guarantee the success of this business for a long time.

West Virginia is in competition with Ohio and Pennsylvania for one or more of the plants, which would convert ethane, a byproduct from Marcellus Shale natural gas drilling, to ethylene, an organic compound integral to production of a variety of chemicals and plastics.

The American Chemistry Council estimates that a West Virginia cracker would create 12,271 jobs, with 2,484 people employed directly in the chemical industry and 6,262 indirectly through its supply chain. The remaining 3,524 jobs would be accounted for by the subsequent increase in consumer spending, according to the trade group.

Estimating a cracker's price tag at $3.2 billion to build, the council also believes such a project would provide 8,000 short-term, construction-related jobs.

A cracker would need between 60,000 and 80,000 barrels of ethane daily. West Virginia officials estimated this summer that the state's Marcellus shale wells pump out at least 150,000 barrels of the byproduct a day. They also projected at that time that ethane production will increase to 270,000 barrels daily by the end of 2015.

As you can see, we are serious about acquiring a cracker plant in West Virginia. This tax relief bill shows potential investors that we are, and will continue to be, a great place to do business. I was thrilled to see such a cooperative bipartisan effort where people came together to work for the betterment of the state as a whole. This legislation is truly a game changer in our state’s history.

This is the first bill of the regular session to complete legislative action.

If you would like to follow the daily action of the Legislature, visit the 80th Legislature on the web at

I hear your voice and I encourage all of you, regardless of party or affiliation, to contact me with any concerns you have regarding issues facing our district or our state. You can write to me at: Jeffrey V. Kessler, State Senate, Room 227M, Building 1 State Capitol Complex Charleston, WV 25305.

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