PITTSBURGH — A pair of economic impact studies that were used to justify billions of dollars in tax breaks to bring a massive petrochemical complex to Pennsylvania used flawed methods and misled lawmakers, according to a new report. Shell Polymers Monaca, the company’s first Appalachian plastics plant that sits about 30 miles northwest of Pittsburgh, began operations in November 2022. In 2012, Pennsylvania lawmakers offered Shell an “unlimited tax credit” to lure the company to the state in what was, at the time, one of the largest public subsidy packages ever awarded to a private company in the U.S.

The Pennsylvania Budget and Policy Center estimated at the time that these subsidies would save Shell $1.65 billion over 25 years. Proponents said the deal would usher in a new wave of economic growth for the state—a promise that hasn't panned out so far.

A new report from the Ohio River Valley Institute, a nonprofit think tank, examines a 2014 study and a 2021 follow-up study that have been widely cited as justification for Shell’s massive subsidies from taxpayers. Shell commissioned and funded the studies, which were conducted by researchers at Robert Morris University (RMU), a private university in a Pittsburgh suburb with around 5,300 students.

In the 2021 analysis, RMU study authors estimated the Shell plant would bring massive gains, including nearly 12,000 new jobs and more than $70 billion in economic benefits to southwestern Pennsylvania over the lifespan of the project. However, the Ohio River Valley Institute says these estimates were based on inaccurate economic projection methods, a failure to incorporate external costs, non-standard timelines and a misclassification of the plant’s purpose.