Bottom of the LNG Chain – Independence from Meaningful Taxes

One of the major U.S. hubs for LNG processing, storage and pipeline transportation is located at the center of Marcellus Shale country in western Pennsylvania near Houston, Washington County, Pennsylvania. The hub began with the construction of MarkWest’s cryogenic gas plant, which also includes a large railroad loadout yard for the shipment of propane and gas liquids.

MarkWest Houston PA Gas Plant next to the Western Area Vo-Tech School
More recent construction of the Houston Tank Farm, between MarkWest’s (Marathon) cryogenic gas plant and the railyard, was completed by Sunoco Pipeline LP / ETC Northeast Pipeline LLC, making it the origin of the Mariner East pipeline to the Marcus Hook export facility near Philadelphia, PA. Construction of that pipeline was rife with statewide environmental damage and PA DEP fines. Even our state attorney general had to get involved.
Houston Tank Farm - Sunoco Pipeline LP - ETC Northeast Pipeline LLC
Pipeline cuts scar Washington County Pennsylvania
A friend recently researched the deed, discovering the low real estate taxes being paid by the Houston Tank Farm, as she shared this comment:

“Washington County has the parcel listed as belonging to ETC NORTHEAST PIPELINE LLC. DEP Efacts lists the permit for the site as belonging to Sunoco Pipelines. (Sunoco is Energy Transfer). See how little they pay in taxes!”

Washington County Pennsylvania Property Deed research – July 2022
Sure enough! The Houston Tank Farm only paid $4,894.49 in 2020 county taxes, while in 2015, ETC Northeast Pipeline LLC paid $7.75 million for what’s now listed as “124 acres with a metal building” and only assessed for slightly over $2 million in 2022. Un-fracking-real! Meantime, the county Target store, on just over 1 acre, paid $21,954.67 or nearly 4-1/2 times as much in county tax, partly due to their building being part of the property assessment, unlike these 4 ‘cue balls.’
The Houston Tank Farm as it appears from Route 519
You can see why it’s been my distinct impression over the years, that the shale gas industry in Washington County, PA always ‘gets off cheap’ — as may be the case in other states as well. When I first looked into how cheap the taxes were for some of the real estate parcels with large, industrial-grade compression stations, I was told the actual equipment isn’t taxed. And the remainder of some parcels is taxed at low ‘Clean & Green’ rates.
Case in point
The Welling Compressor Station, covered in my previous blog here. That parcel and commercial operation only paid $861.45 in Washington County taxes in 2020. That’s just slightly over double what a small ranch house, situated on a small residential lot, paid that same year!
This industrial-grade commercial parcel only paid $861.45 in county taxes in 2020
Resource Curse?
Some use that term to describe areas that get pillaged for their fossil fuels while doing extensive environmental damage that sometimes isn’t, or can’t be, fully remediated. We tend to think of 3rd world nations, but our county shows a clear resemblance, when looking at its history of oil, coal and gas extraction, while the business groups love to spin our county as “The Energy Capital of the East.”
Perhaps “The Bottom of the LNG Chain” is more apropos!
Archive: Houston Gas Plant

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