Sign Pennsylvania Banking RFP Now

Industry sign banking pennsylvania rfp now

good afternoon everyone my name is scott zions i lead the economic development incentives practice at the worries law firm we're honored to have you here for our sixth annual economic development incentives conference what's become the largest annual economic development incentives conference in the country last year we hosted more than 300 of you in person next year we're looking forward to hosting you in person again and this year we're making the best of it by having a virtual seminar and great speakers and and attendees so thank you very much for joining us we provide free continuing education as part of this conference all we ask of you is you please take a moment to complete the survey and give up your ideas for next year so we can make sure we serve you with ideas of interest i don't know anything further i'm going to hand it off to my colleague chris canezovic to lead this panel it's yours chris all right thanks scott um good afternoon everybody my name is chris canezovic i'm an attorney at vory's i work with scott in the economic development group um so during this session today we will cover how ohio pennsylvania and west virginia are attracting petrochemical uh chemical downstream and use manufacturing companies and businesses that support those operations to the ohio pa in west virginia kind of tri-state region we have lots to get through during the session so i'll do a quick intro of our panelists and then we'll get right into it so today i'm joined by matt sabolsky who's managing director of energy and petrochemicals for jobs ohio um matt joined jobs high on 2011 has held various positions during his time there including director of project management and director of energy and chemicals prior to that he's held various economic development roles during his career he's from steubenville ohio so so very close a part of this region that we'll be discussing today and earn his bachelor's degree in poli sci and his masters in public administration from west virginia university i'm almost i'm also joined by james howery who is he serves as manager of business development for the west virginia development office which is a division of the state's department of commerce he works in business attraction across multiple industries but focuses mostly on energy sector as well as chemical and polymer processing and downstream manufacturing operations so over the past year he has assisted the efforts of the governor's downstream jobs task force as well so james is based in charleston west virginia and holds an mba and a degree in economics from west virginia wesleyan college so finally i'm joined by brent vernon so brent is executive director of pennsylvania's governor's action team which is the commonwealth's lead state economic development office brenton has over 30 years of professional experience experience serving in state and federal economic and workforce development positions so prior to becoming the governor action team's executive director back in 2015 uh heel positions of deputy director of project management and senior project manager and brett holds a ba in poli-sci from penn state and an mpa from shippensburg university of pennsylvania so we'll go um here's just a quick rundown on the agenda and we will i'll give a quick overview on the tri-state region and the petrol petrochemical industry where things stand i'll turn it over to matt to discuss an overview in ohio and turn to brent for pennsylvania and then james for west virginia each of the three will give an overview of how their own state is handling recruiting and attractment of companies and businesses in this industry we'll have a panel discussion where we'll talk about a few different topics and then at the end we'll uh we'll also take questions from the group so please feel free to submit your questions throughout this the session and hopefully we'll get to uh some if not all of them at the end okay so i'd like to set the stage by by giving a brief overview of the petrochemical industry in this tri-state region why is growing and thriving there so ohio west virginia and pennsylvania sit atop the marcellus shale which is the biggest natural gas formation in the country so along with the utica shale which also you know which also this region sits on top of those shields produce a vast amount of natural gas liquids or ngls which is a class of drilling byproducts like ethane and propane that are used to make plastics and chemicals so in addition to these vast amounts of natural resources here a lot of the other pieces line up to make this region an ideal location for growth in the petrochem petrochemical downstream industry including proximity to unused markets there's a good existing infrastructure there's a skilled workforce that the industry can pull from and there's also an established plastics manufacturing industry that i'll have a little slide on in a minute here so this chart that we're looking at compares the amount of natural gas produced in ohio pennsylvania and west virginia to the rest of the country and as you can see the production in these three states is far outpacing uh you know the rest of the country and to put that in context if you look at the tri-state region's gas production and compare it to the rest of the world it would actually rank third behind the us and russia you know i mentioned uh in the opening here about the proximity to end use markets earlier and this graphic does a nice job of showing that 80 percent of the polyethylene demand in the country is with is within 700 miles of this tri-state region and similarly 70 percent of the country's polypropylene demand is within 700 miles of the three states i mentioned the the existing you know manufacturing base and this gives a pretty good indication of just how robust it is um this slide here shows you know this tri-state region the existing manufacturing in the area and how it surrounds uh the shell cracker facility site as well as proposed ptt gc cracker site uh both of which we'll we'll learn a little bit more about here shortly so with that background i'm going to turn over to matt so that he can uh discuss ohio and its role in securing petrochemical operations so matt take it away thank you chris good afternoon everybody some of the key items i'm going to touch on a brief jobs ohio overview and then provide some insight on some of the key themes that we focus on when we're working on petrochemical projects and then wrap up with a couple of case studies so very briefly jobs ohio is the state's private economic development organization we've been around for 10 years when governor kasich took office office in january of 2011. he wanted to privatize economic development in ohio bring people from various industry sectors that we focus on 10 of those sector focus silos that we focus on now bring people from industry to run those sectors and our sole mission is economic development so helping companies expand in ohio and then locate new opportunities given that we're a private company we have a board of directors this is a list of them they're all executives within companies that are located or headquartered in ohio and jp nauseaf second row towards the right there is our president and ceo he's been in that position it'll be two years next march or in march next month so we were privatized in 2011 and then in 2013 we uh privatized our uh liquor franchise so we entered into a 25-year lease with the state department of commerce where we purchased that liquor franchise for about 1.8 billion dollars and we paid back about 1.4 billion to the state through that bond sale and then that allows us to operate and use profits from the state from the sales of liquor within the state of ohio to operate on it on an annual basis and this is a very unique funding model and it allows us to avoid getting money from the state budget so uh we are not beholden to an administration that either favors or doesn't favor economic development we're we're kind of isolated from that and this gives us about 200 million dollars to operate on an annual basis and given that we're private we've been able to create our own policy guidelines we're heavily audited multiple times a year but we do have our own policy guidelines around programs so it gives us some flexibility on how we can use our funds and this structure is really critical to our success and i'll provide some examples of that related to the ptt project uh here in a bit we have over a hundred employees here in jobs ohio and then we have six regional partners and uh we have con consultants that operate in 10 international markets the majority of our 111 full-time equivalents in our office in columbus are a heavy concentration of back office because of our liquor franchise ownership we're kind of kind of operate as a billion dollar company when you look at the revenue so we have a significant amount of backup office operations and on the economic development side we have about 10 project managers and then the 10 sectors so we're pretty lean so we rely heavily on our regional partners and our local partners throughout the state since 2011 this does not include our 2020 numbers as they're still being finalized but we've won over 2500 projects about 57 billion in capital investment almost 10 billion in new payroll and about 200 000 new jobs and these metrics are commitments that companies provide to us when we provide them incentives to a project so if we provide incentives to a project then the company commits to certain metrics and then they sign agreements either with us or with the state of ohio if it's a state tax credit which we negotiate on behalf of the state these metrics also include projects that we may not have financially supported but we help them in some other way so we got them through a regulatory process we found them real estate we did some other uh played some other critical role in landing their investment in ohio chris touched on kind of the different graphic here but we've seen since 2008-ish i won't speak for brent but ohio benefited from kind of being the last in the shale development cycle so we saw things that were happening in pennsylvania in west virginia and it allowed our our department of natural resources ohio epa to learn from the other states and get ready for the shale development that really started taking off in ohio in 2010 and then in earnest in 2011. about five six years ago jobs ohio entered into stream midstream and downstream investment in ohio and uh we we publish those numbers either semi-annually or annually and from 2010 to 2019 we've seen 86.4 billion so about 60 billion is upstream so the actual exploration and production of wells uh 20.2 billion is in midstream so a lot of pipelines and processing plants when gas comes out of our wells especially in ohio we have a lot of wet gas so it's natural gas ethane propane and butane so those gases and liquids need to be separated out so that happens at processing plants and then we've seen about 6.2 billion in downstream investment right now that is has primarily been natural gas-fired power plants but we're working towards attracting more downstream chemical uh users such as the ptt cracker and then we also have a significant downstream chemical industry that we're working with so that they can hopefully expand in ohio by taking advantage of kind of this newly formed fully integrated system this is a map it's a bit hard to read on this slide but it's on our website if you visit jobsohio.com and go to the energy and chemicals sector tab but this just shows kind of that fully integrated mix the red is kind of the mid midstream facilities the small black dots and squares are meant to depict 25 active wells you see the pipelines the dark blue are a portion of our chemicals industry and things of that nature so we really do have a fully integrated system and it's really been built out that midstream upstream and midstream over the last 10 years so some key themes on petrochemical projects site identification for petrochemical projects while the type of project will determine the size and the type of infrastructure needed we rely heavily on a comprehensive site database that we manage throughout ohio with our local and regional partners but we really try to find sites that require the least amount of infrastructure or other costs that would need to be incurred to to develop so we could find a site that might work but it would need 30 40 million dollars of infrastructure upgrades clients don't want to pay for that and we don't want to get stuck with the bill for every project that we work on so we really try to be very selective in our sites know as much as we can about sites so both large and small so that we can put the the right ones in front of uh clients so we we really try to understand what project needs uh are there an ethane cracker is very has very different needs than say a smaller gas to methanol plant so and i'll provide uh comparison there later on we also have worked with our friends in pennsylvania and west virginia on understanding regional assets so for instance on the ethane cracker side mplx which is the midstream company for marathon operates processing plants throughout southwest pennsylvania west virginia and ohio and uh that allows for significant redundancy for an ethane cracker type project so understanding that is is important as well as underground storage which is been looking at all three states to help store natural gas liquids such as ethane also work very closely on regulatory assistance while jobs ohio is not a state agency we work very closely with ohio epa dnr etc army corps of engineers to in order to get projects through the regulatory process very quickly we've also mobilized support for public hearings so make sure that you know labor comes out in support of projects when they're going through the public hearing process and in fact the falcon pipeline which is an ethane pipeline that comes out of harrison county ohio and it will feed the ethane primary line to feed the shell cracker in menace pennsylvania there were public hearings that were held in ohio about the pipeline and we helped make sure that we had support out there because while the crackers in pennsylvania we see the importance of it to the region so we were happy to do that and then quickly incentive package development our funding stream allows us to target grant or loan funds specifically to project needs so it gives us a lot of flexibility and while we're very well funded we do take an roi approach to every project so we try to understand what type of economic benefit a project would have to the state and make sure that we're not providing offers that would make us underwater and then we also have the ability to tap into state incentive programs like tax credits and infrastructure grants uh and then one big distinction we do not directly incentivize startups early stage companies or pre-revenue companies because of the risk associated with those projects very briefly case study for the ptt cracker project it's in excess of eight billion dollars would be five to six thousand construction jobs about 500 operational jobs and they needed 500 acres on it on the ohio river with rail and heavy power so we found the site that we pitched to shell that ultimately ended up going to manaka pennsylvania and over the years jobs ohio spent about 70 million dollars in site prep and engineering work to help get the site uh cleared up there was a power plant that was shuttered on the on the property on the north end of the property so we did all that due to our flexibility uh with the jobs ohio funding so that when the ptt project does go to a final investment decision they can construct quickly and then a small case study alpont which is a subsidiary of hermitage chemical they were looking at northwestern ohio to build a gas to methanol plant and natural high pressure natural gas was the key for them so we found them a site right off of a high pressure gas line that's feeding a gas-fired power plant this was about a 62 million dollar investment 40 new jobs we provided them a grant for site prep and engineering uh construction costs and then also a state tax credit so it wasn't a huge dollar amount but we found them the right site that is helping them serve their clients um in the midwest basically from the chicago area on east and then we did work very closely with ohio epa because there were some really critical permitting pieces that um that were needed and the facility was up and running i think late last fall but here's just a couple of pictures and it's just outside of the toledo region and then very briefly 20 2021 forecast we're really hopeful that we can get ptt to an fid it'll be eight years this july that we've been working with them so very long a lot of resources we've put into that we are cautious to the gas to liquids projects that we see oftentimes they're being led by early stage or startup companies which we have a hard time incentivizing as i mentioned before we are seeing more biodiesel projects with states and provinces in canada passing low carbon fuel standards we're seeing more of those types of projects uh pop up and then more on the renewable side especially solar to feed various industries throughout ohio so we are trying to have more of a balanced approach uh big focus still on petrochemicals but also um being more uh accepting and and supportive of renewable projects to help uh companies throughout the state so with that i think i'll turn it over to brent great thanks matt um good afternoon everyone on behalf of governor tom wolf and dennis daven secretary of the department of community and economic development i want to thank chris uh and scott and everyone at his team uh for inviting pennsylvania to participate in this conference today it's a pleasure to be well with you and also with my neighbors from ohio and west virginia what i like to do similar to what matt had shared is give an overview of my office the governor's action team talk about some of our chief incentive programs specific for the petrochemical industry and some others and then wrap up uh briefly with an overview of the shell project in beaver county so uh what my office does the governor's action team we effectively serve as the state's lead economic development office providing comprehensive economic development services typically involving larger more complex projects considering pennsylvania for expansion or relocation we're headquartered in the state capital of harrisburg i have a team of 17 professionals that provide what we like to call concierge level services to our clients including location services data analytical research workforce investment assessment training resources and then packaging customized incentives we work directly under the governor and the secretary of dcd we also coordinate services and support through other state agencies on a priority basis including environmental permitting needs transportation matters including road rail as also as well as labor and tax assistance matters we typically work directly with corporate executives and their project teams incentive and location advisors and coordinate services with a vast network of our local economic development service providers across the commonwealth in response to rfps and similar to jobs ohio we here in pennsylvania also take an roi approach to resources that we're able to provide and leverage investment in our state quick map here most of our professionals are based in harrisburg but we do have regional offices located in erie pennsylvania northwest corner pittsburgh pittston which is in the northeast part of the commonwealth near allentown excuse me they're scranton and volksbury regional office in allentown which covers our lehigh valley area and also philadelphia and pennsylvania's southwest part of the state by the numbers take a look at the past six years of governor wolf's administration i want to be clear that this information is based on activity that my office and projects that we have worked on does not include other programs or areas of dced or even other agencies where incentives and business assistance resources are located so over the last six years my team has worked on just over a thousand different projects we made offers to almost 400 businesses completing about 357 of those to date those projects ended up creating over 38 000 new jobs work to retain 122 000 jobs through additional investment uh workforce training resources that we provided to help them achieve those goals and all in uh the work that my folks have done attracted 14 billion dollars in new private investment and you can see some of our clients uh right there as well on this slide so pennsylvania uh is located within a day's drive of nearly 40 percent of the u.s population and 60 percent of the canadian population and purchasing power including for the 10 largest markets in the united states uh this busy pin map showcases location of nearly one 000 chemical and plastic businesses across the commonwealth which take advantage of our location of raw materials customers business partners and workforce talent in addition to our business climate market proximity and economic development services we have exceptional resources specifically supporting the the plastics industry which we're very proud to showcase in pennsylvania we have two of only five accredited plastics engineering and technology programs in the nation penn college of technology is located in the central part of the state in williamsport and penn state erie is located in the northwest part of the commonwealth two programs i'd like to cover briefly that are specific to the petrochemical business the first is our pa resource manufacturing tax credit this was created uh in the early days of the due diligence process uh with shell the prm requires a one billion dollar minimum capital investment uh 2500 full-time equivalent construction jobs must be demonstrated and the tax credit makes available a nickel per gallon or two dollars and 10 cents per barrel of ethane purchased and used in the manufacturing process at a facility in pennsylvania the credits are limited to 20 percent of the businesses qualify pa tax liability each year there is a provision for sale uh or assignment uh the tax credit is not refundable and it has a 25 year shelf life it did begin in 2017 and will sunset in 2042. graham came online more recently very similar to the prm our local resource manufacturing tax credit was passed by our general assembly and signed by governor wolf last july it too provides a tax credit to a manufacturer purchasing dry natural gas methane of course for use in manufacturing petrochemicals such as fertilizers at a facility in a commonwealth its minimum capital investment is 400 million the project must demonstrate uh creating at least 800 full-time jobs during construction and the ongoing operation of the facility this tax credit is equal to 47 cents per unit of dry natural gas purchased and used in the manufacturing process of chemicals or fertilizers per unit is defined as a thousand cubic feet very similar again to the prm the use of the credit is limited to 20 percent of qualified pa tax liabilities uh it is uh maxed out at just over 26 million dollars per year made available for up to four projects also like the prm the local resource manufacturing tax credit has a provision for sale or assignment but it is not refundable another program i like to talk about is our keystone opportunity zone program uh that is not industry specific but uh is a very powerful incentive uh that we've had in pennsylvania for well over two decades it's uh straightforward very predictable and zones are already designated koz designations are typically granted to brownfield sites and locations which are underutilized or distressed the one thing i like to add here i think across the country there's a lot of programs that have a z somewhere in their language but our keystone opportunity zone program of pennsylvania is not to be confused with the federal qualified opportunity zone emission there are many properties in pennsylvania which uh have both programs creating what could be considered a potential super incentive site with compelling state and local tax avoidance uh from our koz uh as well as the potential to leverage investment uh through funds that could benefit from tax savings on capital gains that are invested in a federal opportunities zone i'd like to talk briefly about uh decommissioning and redevelopment playbooks for coal-fired power plants uh we have a number of these facilities that have and continue to be retired throughout the commonwealth the primary purpose of the of the playbook is to provide a menu of redevelopment plays for consideration by industrial site selectors and the development community as they seek new sites for investment these sites feature very valuable brown fields with industrial infrastructure already in place for the commonwealth these are priority redevelopment sites and the state has taken a very comprehensive approach for finding best and greatest reuse of these former power plant sites and to proactively showcase new opportunities to prospective investors i would also like to mention pennsylvania is a leader in the nation as far as the number of international offices that provide in-country representatives to work with foreign businesses considering investment in the u.s and pennsylvania as well as export assistance for pennsylvania companies as well now i'd like to briefly move into uh the shell project in southwest pennsylvania specifically in beaver county um the the folks that we worked with at shell when we started with them back in in 2011 uh invited us to participate on a journey with them uh when they announced uh plans uh for an ethylene cracker plant in the appalachian region uh end up uh finally looking outside of pittsburgh at a location which you can see on the left as was what the former horsehead zinc smeltering facility looked like back in in 2014 at that time shell was conducting and just starting its due diligence process with those efforts that spanned over two administrations in pennsylvania there were certainly numerous decision gates that had to be satisfied before shell made its final investment decision in june of 2016. so nearly a five year process from start to final investment decision and construction certainly continues in the photo on the right you can take a look at that in mid 2017 michelle announced completion of the site's early works program and that marked the beginning of the main construction phase so why pennsylvania and this site on the banks of the ohio river uh as we heard earlier talking about in utica plays in our region uh shell made a market-driven investment decision uh the plant is located to both the source of the ethane and its customer base more than 80 percent of the north american polyethylene customers are within 700 mile radius of the area and shells location in beaver county will provide them a competitive advantage over gulf coast operators by providing customers with a shorter and more dependable supply chain for the region and certainly our work through that due diligence process very much focused on the region's talent both for construction services as well as ongoing plant operations and i think throughout the entire process we maintained a presence of an inviting community that demonstrated a true partnership to work with shell on this process by the numbers uh six billion uh give or take on total investment uh approximately 1200 uh acres were ultimately uh assembled for this and uh once up and running uh shell will be producing at the beaver county facility uh just over two or excuse me over three billion pounds of plastics produced uniquely and conveniently located uh just about a half hour to downtown pittsburgh and only 15 miles from the international airport so it's a very prime location sitting on the ohio river with this picture it was taking uh just uh just less than a year ago the project certainly uh has been adjusted in terms of the construction schedule by the pandemic uh talking with the folks at shell at the start and during the pandemic uh like all of us they took the situation very seriously uh had the highest priority for life safety and the health of their workers and took appropriate measures uh to scale back and and do what they needed to do to address the situation and restart construction in a safe manner in accordance with uh pandemic uh guidance again we understand the project is probably better than 70 percent complete right now uh the operation startup question i think we're allowed to say it's it's coming soon and uh it's still slated to come online in the early 2020s uh which we're certainly in right now so we're wearing access uh for the start switch to get flipped on and and for this terrific project to start producing plastic resin and one last photo i'd like to share i think it's appropriate on a cold winter day is a terrific sunset photo of where the location is and the activity today looking at the ohio river going downstream looking west to our friends over in ohio so with that i thank you very much for your time and we'll be happy to answer questions following west virginia's presentation with james so i'll turn it over to you okay thank you so much brent and matt it's a pleasure to be with you as well and of course we'd like to thank the team uh scott and chris at 40s for allowing us to be part of the vedic presentation this is a great opportunity with far reach and i want to say thank you on behalf of our commerce department a little bit about our team governor justice was re-elected uh this past fall we'll serve another four-year term uh much of our leadership remains intact at the cabinet level uh similar to pennsylvania we operate as a state agency and so the commerce department is part of state government within that we have of course an office of economic development and teams within that that focus on business retention expansion uh recruitment of fdi and export assistance and then the other piece is business attraction so certainly this has been a unique time in human history living through the pandemic and certainly we would never make light of that what i would tell you is we were very fortunate to have a banner year in 2020 the thing that stands out the most of the announcement of hyperloop uh making the decision to place their certification center in northern west virginia that was a very competitive endeavor that involved a multi-agency approach and similar to the other two states you know we do try to provide that whole of government assistance as projects move forward but also in 2020 several companies based in the gulf coast placed investment in the kanawha valley of west virginia we're very pleased by that um on top of that we had an expansion of clockner pinoplast in the southern part of the state we saw west virginia methanol make their announcement and another headlining event for us was clorox decision to place a manufacturing plant in the eastern panhandle we'll talk a lot about worker performance you know we all know what we have in the region we have great muscle memory a mix of blue collar and white collar talent that isn't necessarily found um across the rest of the country but i will say that um anytime i'm in pittsburgh you know the first person i see is from where tender wheeling and certainly it's a tri-state labor shed at least in most of our state okay we've talked a lot about this um as matt and brent spoke i won't dwell on this we do think that our process is compelling because of the concierge level of service like the other states we make training available um through any mechanism necessary you know often it's the community technical college system sometimes it's the universities themselves we also believe that we offer um a type of collaboration that isn't always seen throughout the rest of the country business climate speaks for itself west virginia dating back to 2015 has made ongoing efforts to improve both taxation as well as toward legal reform and other metrics that impact the operating of business we have cut income tax over the past five years corporate we've also seen reductions in sales tax and we continue to look at ways to be more innovative at the handling of property tax again on maps you've seen many great images from my colleagues i won't spend a lot of time on this other t an to say we sit atop as scott touched on vast reserves of natural gas and natural gas liquids predominantly in the northern part of our state and the ohio river corridor i would say as you look at companies many of the world's best companies operate not just in west virginia but in some mix of the three states you know one example is solve a which has a plant both in marietta and parkersburg and then also you know you have a company like covestro who has investments in pennsylvania as well as west virginia okay let's talk a little bit about business assistance and you know i mentioned we're structured more like pennsylvania being a branch of government but we do try to look at best practice from ohio as well and a lot of the things that are done by our peers you know when it comes to working with either a vetted prospect or a new lead we really try to put everything at the disposal that would advance the discussion so we help obviously with reviewing sites identifying building options we pull together the state's financing programs as well as facilitate meetings with anyone in the transportation logistics space okay and just to continue that a little bit you know part of that offering is the governor's guaranteed workforce program which offers uh sorry operates as a training grant we also offer in-kind assistance his company screen talent on the way in and then when they're expanding when they if they have to set up training programs with partner institutions we do have the ability to make roadway improvements especially such that um you know the company's investment would uh would come to pass and in terms of utilities especially water and sewer the state maintains an infrastructure council to facilitate that [Music] okay talk a little bit about permitting with the west virginia department of environmental protection um certainly every state goes to great lengths to protect their environment and i would say we have some wonderful efforts at stream restoration as well as youth based programs that the team at dep does a tremendous job but on top of that we've been a very industry friendly uh dep and we have an affinity for industry and our attitude is you know how do we facilitate the project so you'll find that we have a prime minister so standards in west virginia typically never exceed those at the federal level and then also when uh when a project's being worked we provide a liaison so that the company has someone on the permitting side to work directly with one thing i would touch on this this occurred last year in the fall we were designated to now meet um ambient air quality standards under the um naaqs act and that's significant because that means that every county in part of west virginia is now entertainment and that speaks to air quality standards but of course ironically makes new permitting a little bit easier financial assistance briefly touch on the state economic development authority they do provide direct asset lending i'm sorry fix that fixed asset financing and a fairly modest levels as far as what we can provide and they do use standard underwriting but the eda helps in other ways as well some companies will set up an operating lease or synthetic lease and eda will help facilitate that and they also have the ability to issue industrial bonds getting into the tax report i always offer the disclaimer i'm not an attorney i'm also not an accountant and i don't want to put the um the audience to sleep so suffice it to say we have a very robust menu of tax credit programs that essentially provide offsets to income tax sales tax and property tax and some of the slides will touch on that i know folks may have questions and be happy to address any of those offline about specific programs but before i move on i will mention uh several things in particular okay at the bottom of the slide you'll see something known as the 5 for 25 legislation and of course that was passed a number of years ago when shell was starting to look at the appalachian region so 5 for 25 is essentially a property tax incentive for world scale investments it is based upon nick's code and requires capital investment 2 billion or more the 5 for 25 would assist any company that would locate a large hydrocarbons plant in west virginia but in its current usage it is enjoyed by many of the midstream companies that have fractionation and other separation facilities for natural gas liquids a couple of things are new on the horizon for us in the 2020 legislative session two new programs were passed first being the downstream natural gas manufacturing investment tax credit and this essentially is an offset against corporate income tax or pass-through income tax and it's uh very similar to our economic opportunity credit which of course is based on the job creation and capital investment the difference was this one obviously is that it must pertain to the natural gas or ngo industry and the credit lasts um up to 20 years whereas the other one lasts 13 years the second one is the natural gas liquids economic development act and to be very candid with you that was put into place to try to reinvigorate the discussion in west virginia of a natural gas liquid storage hub we very much want to entertain uh companies that are looking at storage of ngls and of course that's been a tri-state endeavor and what the credit would do um you know for a company that is transporting large volumes of ngl or creating permanent storage this would provide a income tax credit working as an offset against any property tax paid okay talk a little bit about some of the the projects that have have stood out over the years and again i'll try to be brief as i review this uh several years ago a canadian company known as videl gas compression made the decision to locate in wierton west virginia and this process moved very quickly it was definitely an all hands on deck approach um some of you may be familiar with the the general site that was chosen um the company ended up um placing their operation in a machine shop that is part of the old works and steel footprint so we're looking at a very large brownfield property that had already received significant remediation the building itself had great bones to it it did require some upgrades that were facilitated by the local economic development organization and the state through our eda was able to provide financing to facilitate the final decision and that investment was approximately 15 million in its initial iteration with about 45 permanent hires and just a really neat story because many of the workers came from um ohio and pennsylvania with weirton being a border city okay si group uh most of you would know this is atavant this is a morgan town and was previously a company called kimtora and the reason i lift this up this project was uh represented of course by uh ataban officials at the corporate level but also via site selection consultant so you know the way that we were able to administer health was very important for them to make a final decision um it's a good day anytime we beat texas for an investment that was the case here we also beat connecticut who had both of those states also had branches of the company and avon specializes in food packaging and has several innovative products and you wouldn't think necessarily that they would be in the university city of morgantown but they do operate along the uh the mon river and part of what they were looking for in addition to upgrades to access road uh they were also looking for help with equipment which was facilitated through several loans and then also energy efficiency um devices which actually the county commission stepped up in that case um this would also move quickly once the project became known and uh we were proud to get it closed okay this represents um a good one to close on uh although i do have one more slide after this uh five years ago going back five and a half we were absolutely delighted to have procter gamble um in one of the world's foremost consumer products company announced in the eastern panhandle of west virginia and you may see that and say you know i thought this was petrochemical presentation today and i'll just say this png more than any of us realize is a polymer chemical company you know they work with a lot of surfactants um and other advanced polymers you know they make everything from dryer sheets uh to shaving products i won't go through the list but their facility in martinsburg was their first major plan investment in nearly 40 years and that also took a very comprehensive approach we did have a site that was um for the most part a greenfield property that was ready to go uh we did make some water extensions to help facilitate their decision um and then other things that helped berkeley county uh with a payment in the love arrangement to help handle the property tax issue um also very proud of of png and what they've done their training center is housed at the blue ridge technical center which is actually in a different county so what they've done is they've made a commitment not just to martinsburg but to the whole panhandle and really to the region as their workers come from a four-state shed so divided by that project it was um 500 million capex in its initial iteration and it has grown much bigger since then okay what comes next uh what do we see as we we look at the year ahead we certainly want to build on the success of 2020. um i would tell you with methanol plants uh this this goes a little bit to what matt was saying earlier you know some of them are a bit blue sky in nature so we have one that's under construction that is um probably about 70 complete outside of charleston uh we look forward to them coming online and then we also have one that announced uh back in october so we're also working with them diligently you know something that we think about often is um the supply chain and i'm sure that will come up in questions and remarks we want to look at our existing companies and say okay what do they need uh to be more successful and that's very intuitive but sometimes you have to have those conversations we've done that with um you know a number of companies in both the petrochemical space as well as the aerospace industry and the final thing i'll touch on off that list you'll see where we mentioned existing chemical parks and the co-location model and that's perhaps west virginia's best chance it what i would call short-term success is having companies come in and a lot of the infrastructure is already in place and not just infrastructure but the services whether that's safety fire suppression industrial gases so i'm happy to share that map with anyone that's that's interested after the fact we have a number of chemical parks really throughout the kanawha river and ohio river region that facilitate those types of medium-sized investments so and wrapping up i want to thank scott and chris and your whole team it's a pleasure to be here and look forward to uh adding value in any way i can thank you all great thanks james and thanks brett matt that's awesome i really appreciate that so the hour is flying by so let's just dive into some q a um matt i'll start with you um and then we can let brent james you know weigh in as well so the gulf coast has historically been the main hub for petrochemicals in the country for many years um describe you know the ways in which this tri-state region may be more attractive than the gulf coast uh to the petrochemical downstream and and use manufacturing companies and businesses yeah it's a great question chris and it's something we've talked a lot about um with companies located in the gulf uh as well as the partners in west virginia and pennsylvania a couple things to come to mind one is when you're looking at these chemicals plastics we are in the middle of the the u.s demand we talked to you you showed your charts earlier 80 percent of polyethylene 70 percent of polypropylene is consumed in our region and so when you combine that with the low-cost feedstock ethane maybe propane or butane and other uses or natural gas being able to locate on top of the really low cost feedstock and then ship it a much closer distance makes it rather advantageous to be up here the fact that shells plant is nearing completion in monaca really helps cement uh our steak in the ground uh if we talk to companies seven eight years ago in the gulf they would just kind of pat us on our head and say don't worry about us send us your ngls and we'll take care of them now the shell project makes it a lot more real and then you look at the natural disaster equation and i know we've we've talked in preparation of this conference and james has some good maps we have a similar uh red cross map that we share which is the the hurricanes and other issues that the gulf coast has been hit with over the past few years and i i don't think i ever uh characterize us as displacing or replacing the gulf coast but being a very good uh kind of second petkin uh hub so when those operations do have to shut down um you know then having redundancy up here makes a lot of sense and then uh i think i circulated an email yesterday that due to the cold weather in houston the last couple of days several chemical companies had to announce force measure uh closings because of of the ice so now they're getting it on both ends uh summertime hurricanes and now uh february ice so um really the reliability the access to market the cheap feed stock really puts us well positioned so brent uh so the the natural resources are here we discussed it with with the shales shells building the cracker you know ptt hopefully is next it is the goal now to recruit businesses that would have otherwise located on the gulf coast to this region and if so what you know what steps or what strategies are being implemented to to attract this excuse me to attract those companies sure thanks chris and i think part of of the answer to that question uh is also based on uh what matt had shared uh you know certainly at the start of of the exploration by shell uh in the appalachian region uh other entities in the gulf coast were just uh taking a step back and and looking at that not really sure if an opportunity like this with an investment of this magnitude would actually come to fruition and it has it is uh for the first time in over uh two decades outside of the u.s gulf coast uh so for the the reasons that matt had shared as well um it has always been our position in pennsylvania that you know we're not going to be just satisfied with the shell project but it but it's part of a total solution to an opportunity in raising uh an entire industry not only in pennsylvania but the entire shell formation involving our neighbors in ohio and west virginia as well and i think one of the key uh items to to showcase and certainly shell knows this is is that transportation factor so after you take care of your fixed cost what variable cost can you get your arms wrapped around and then when you talk about selling resin competitively with fractions of a penny per pound making a difference combined with taking the feedstock right out from underneath your feet processing it for value added and then sending it maybe just down the street perhaps to a customer to make a a product out of it that has been part of our goal all along so it's just not the shell project and maybe three or four more ethane crackers are available to come online in the region through the as per the ihs market report but we also with as much vigor and emphasis uh to help our existing pennsylvania companies particularly those that are going to need more plastic resin that would be produced from shell to make products again whether it's construction material consumer products and packaging such as what james had mentioned out of png and other items that very much is part of our portfolio for economic growth is helping the manufa downstream manufacturing opportunities invest for the very same and similar reasons as why shell made the investment here market proximity consumer base okay great hey james you know shifting gears a little from you know from that attraction from the gulf coast gulf coast we were talking about do you have a sense for how low natura gas prices you know the struggles of many in the energy industry will impact you know the business development efforts sure that's that's a great question and we empathize with producers you know any low price low price environment um difficult for them to withstand but i would say this low prices are a clarifying uh kind of dynamic and what we've seen at least from our perspective is some consolidation um in the upstream industry which we would hope would lead to several types of efficiencies and the other thing that um low prices may help you know that the companies have an incentive now more than ever to talk with us about downstream users of their product so what we've seen over the past four to five months you know a lot more of the producer companies are calling us and setting meetings and saying okay we've seen the methanol announcements you know we'd love to be a part of supporting that and we'd also like to recruit more downstream users so again i think the consolidation it may be painful in real time but i think the long-term effects are going to be helpful uh we also hope that it leads to some infrastructure built out that hadn't previously happened as far as either gathering locations or um lateral pipe that connects different parts of the state to each other great so matt we are you know we have about a minute left um so i'll give you a quick one um so is the pandemic revealed anything in particular about the pet cam industry or downstream businesses that has surprised you or or you know made you think otherwise prior than you were then you're feeling prior to the pandemic yeah it's a great question um within about 50 seconds uh i think it's opened a lot of people's eyes the role that petrochemicals play in ppe medical devices pharmaceuticals themselves and combine that with realizing the long supply chains um supply chains throughout the world and uh understanding uh or getting a sense of how much we want to shorten those supply chains and have things more things made in the u.s jobs ohio is really focused on trying to understand opportunities related to shortening supply chains and when you look at it petrochemicals i think is the crux of of many things and while there are some detractors of the industry and plastics i bet uh 40 million people in the u.s wouldn't have gotten vaccinated over the last two months without petrochemicals whether it's through syringes or the vials that the vaccines are in or the shipping containers that are used for the for the cold storage so it's been an eye opening and i think they're more opportunities for us to capitalize on okay great well thank you um so that is all we have time for today i wish we should have gotten more of a question but um if you do have any for the audience members if you have questions please feel free to reach out to us thank you to everyone who took the time to tune in today we greatly appreciate it and have a great day you