| A proposed $3 billion coal-to-liquids plant being touted by Gov. Joe Manchin for Mingo County could receive at least $600 million in tax breaks under West Virginia's economic development incentives, according to the Charleston Gazette.
Details of incentives for the TransGas Development Systems LLC project have not been made public by Commerce Secretary Kelley Goes or by the Mingo County Redevelopment Authority, which is behind the proposal.
The $3 billion plant would be eligible to receive tax credits worth 20 percent of its capital investment = $600 million.
Developers could take all or a portion of those credits, and would also be eligible for a variety of other incentives, including assistance for employee training and various infrastructure needs.
Ted Boettner, director of the West Virginia Center on Budget and Policy, noted that the $600 million in tax credits would amount to $3 million per job. The company says it plans to create 200 permanent jobs.
That's pretty pricey economic development, using taxpayer money.
"The state should be asking itself if these investments will deliver economic growth and quality jobs that have benefits. Unfortunately, no one but the state Tax Department will know if these jobs are created, the quality of these jobs and if TransGas hires West Virginia labor," Boettner said.
In August, the state refused to release a letter outlining possible incentives for a coal-to-liquids plant proposed for Marshall County until the Gazette filed a Freedom of Information Act request.
Goes told the Gazette no such letter or other document exists that outlines incentives for the TransGas project.
Boettner said the public generally can't find out the cost of state tax credits until three years after the credits are claimed, when the Tax Department publishes a report on that information.
"This doesn't help policy-makers or the public understand if these credits are producing any positive results," he said.
"Given the likely prospects of budget deficits in the near future, lawmakers will not discover until it's too late the loss of revenue."
"The real problem isn't this transaction, but the lack of disclosure and accountability in the business subsidies at the state level."
Could West Virginia officials be juggling some smoke and mirrors?
Last week, Manchin officials made the announcement of the project at the governor's second West Virginia Energy Summit at Stonewall Resort.
"West Virginia remains firmly committed to advancing coal-to-liquids technology. We are excited that TransGas Development Systems shared that goal and is prepared to invest in our state," he said.
The media said TV cameras had been banned from part of the energy summit.
"We don't believe that energy projects need any subsidies from the state, so we seek and ask for no government subsidies or tax credits," said the company spokesperson, but Manchin conceded the project would be eligible for existing state tax credits and other subsidy programs.
The conversion plant would turn 8,500 tons of coal into 18,000 barrels of gasoline a day.
The company claims to be a near-zero emissions facility, and plans to capture carbon dioxide emissions, but does not have a plan for disposing of them once it does.
The Charleston Gazette says Manchin has made luring liquid coal plants to West Virginia the top priority of his energy plan.
Joe Lovett, director of the Appalachian Center for the Economy and the Environment, said tax breaks for the TransGas project would be a "waste of taxpayer dollars."
"This plant will generate much more greenhouse gases than a petroleum processing facility, and at a time when the federal government is considering restricting carbon dioxide emissions, for the state to support a project that's not going to sequester its carbon dioxide emissions is like throwing tax dollars out the window," he said.
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