I've blogged a number of times on investment incentives. I get regular alerts from an incentive consultancy and I noticed two incentives this week worth more than $1 billion dollars. Say that with a Dr. Evil voice.
Here are the details taken directly from ICAIncetnives.
Shell in Pennsylvania: $1.6 billion
In June 2012, Pennsylvania Governor Tom Corbett approved a bill for the State budget including $1.65bn tax credit for Shell and its potential partners. To be eligible for this tax-credit the companies must invest at least $1bn in capital expenditure and create 2500 construction jobs. This tax-credit shall apply from 2017 and for the 25 following years as soon as the ethane cracker production exceeds 4.25 million t/y (85,000 b/d) of ethane. Ohio and West Virginia are also in competition for the project.
Sasol in Louisiana: $2 billion
The state supported the project with more than $2bn worth of tax credits and other incentives, including a performance-based grant of $115m for land acquisition and infrastructure costs associated with the facility. Sasol also will receive the services of LED FastStart™ and will qualify for Louisiana's new Competitive Projects Payroll Incentive (up to 15% payroll rebate for each GTL job) and Quality Jobs Program (up to 6% payroll rebate for each ethane cracker job). To support the project's workforce needs during construction and operations, the state will be investing $20m for a new training facility and associated equipment focused on industrial technology at SOWELA Technical Community College in Lake Charles. Finally, Sasol is expected to utilize the Industrial Tax Exemption Program for both the GTL and the ethylene facilities.
I'm planning on blogging on a bunch of recent incentives, including a bunch of incentives over $10 million each in Germany. These two projects are huge, but calculating the present value of the incentives is pretty tough. Louisiana is spending $20 million up front to build a training center and offering over $100 million in incentives. But the bigger dollar amount for both projects is exempting the firms from future taxes. Will blog more about this over the weekend.