Steps needed to ‘Make it in WV' - Beckley, Bluefield & Lewisburg News, Weather, Sports

Steps needed to ‘Make it in WV'

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Sen. Brooks McCabe, D-Kanawha, is managing member and broker of West Virginia Commercial LLC. He has been involved in commercial and investment real estate for more than 30 years, and he also is general partner of McCabe Land Company LP. He has served in the West Virginia Senate since 1998, and is a special project consultant to The State Journal.

The State Journal's article by Jim Ross on the proposed ethane cracker in Wood County did an excellent job of outlining the significant events surrounding this most important announcement. 

The headline, "Plans Without Promises" spoke to the topic, but also alluded to what could be West Virginia's Achilles heel. Can we, as a state, do what is needed to capture the full force and effect of this major opportunity? And by so doing, assure that the cracker and its downstream polyethylene production units are actually built. Without specific promises, or expressed intentions on what the state needs to do, successful completion of the cracker will be less than assured. 

Andrew Liveris, Dow Chemical Company's chairman and CEO in his book, "Make It In America," describes Dow's business as taking oil and gas, adding heat, pressure and different chemicals in a variety of processes to create propylene, one of the world's most ubiquitous chemicals. Every $1 spent on oil and gas in the front end creates $20 on the back end. 

The ethane cracker is the start of this process. Liveris goes on to say that manufacturing is not necessarily the main driver of growth, but a prerequisite for growth. In West Virginia it may well be both the main driver and prerequisite for growth, for nowhere else do we have such significant near- and intermediate-term opportunities for sustained growth. Laveris's book clearly expresses many of the steps our state needs to take if we are going to "make it in West Virginia." 

If manufacturing, driven by oil and gas, is in fact our single biggest opportunity, state government needs to make some promises about what it needs to do in order to jump start a resurgence of manufacturing in West Virginia. To rephrase the question in a more direct manner, "Do the Governor and the Legislature have the will to do what is needed to reenergize manufacturing in West Virginia so it can become a global force in the chemical industry?"

If the will is there, West Virginia can find a way to eliminate the property tax on inventory and equipment. It can simplify administrative rules and regulations while eliminating redundant requirements. It can rewrite prescriptive regulations and make them outcome-based, so the business community can find the best way to meet the proscribed goals rather than have state government dictate procedures and processes. If the will is there, the state can nurture a collaborative relationship with industry, replacing the traditional combative relationship which has been more focused on reacting to problems than trying to work together to anticipate them. If the will is there, the permitting system can be accelerated and permit durations extended so industry has a more predictable business environment. Self-reporting can have a more central role in the regulatory system with penalties commensurate with the problem, if not reported in a timely manner. 

If the will is there, our regulations can be benchmarked to the states around us, the nation as a whole and to the global community with which we must compete. The state's workforce training system can be strengthened and properly funded to meet the significant needs of the new technology based manufacturing processes. If the will is there, the U.S. Department of Labor apprentice programs can be formally joined with the community colleges so all graduates of such programs receive an associate degree from a West Virginia community and technical college bringing the state up to national standards for a college educated workforce. If the will is there, West Virginia can pre-permit significant sites for major manufacturing facilities so the state can move quickly when new large-scale manufacturing opportunities arise. If the will is there, the state can re-examine the legal system with the purpose of reasonably limiting non-economic and punitive damages as well as bringing joint and several liability into an acceptable range from a national and international perspective. Innovation can be joined with cutting edge manufacturing and supported by research centers at our universities and the Mid-Atlantic Technology, Research & Innovation Center, all of which need increased state funding. If the will is there, that is the question. 

West Virginia Secretary of Commerce Keith Burdette commented, as reported in The State Journal, that the next phases for ethane cracker are permitting, design, securing a supply of ethane, financing and construction. Presumably if these are successful, the cracker will be built. What was not said was all the heavy lifting still required by the Governor and the Legislature to assure West Virginia's business climate is ready to compete at the global level and to assure the cracker will be built at the old Borg-Warner Plant in Wood County. The selected site, which was previously purchased from the plastics division of General Electric Company is owned by the Saudi Basic Industries Corporation and is being sold to Odebrecht, a Brazilian company, which is hoping to build the facility with construction workers and plant operators who would be coming from West Virginia. The polyethylene and related products would be sold to users around the world. This project is truly global in scope. The question remains, that even with a rich supply of wet shale gas and oil, does West Virginia have the competitive advantage to compete against the Gulf Coast region which since 2011 has announced over 100 new industrial plants? Shell appears to be backing out of its investment in South Western Pennsylvania and staying in the Gulf Coast, will Odebrecht ultimately have the similar fate? If West Virginia has the will to do what is necessary to be truly nationally and globally competitive, the ethane cracker will be built and it will be the first of several in West Virginia. If we are tentative and remain reactive rather than proactive, the state's future will be much less bright. We are in a crisis of opportunity. Let's hope we have the will to do what is necessary to be great, and not just good. To paraphrase Dow's CEO, "Let's make it in West Virginia!"