COLUMBUS — Marathon Petroleum Corp’s new distribution subsidiary MPLX is expected to keep its operations in Findlay, creating an estimated 150 jobs worth $15 million in new payroll, after Ohio apparently won the expansion project over what was characterized as “fierce” competition from other states.
The Ohio Tax Credit Authority today voted to extend Marathon's Petroluem's existing 60 percent, 10-year job creation tax credit, originally approved in 2011, to 14 years. The new jobs are expected to pay an average of $48 an hour. The package was negotiated by the private non-profit economic development corporation, JobsOhio, and then placed in the hands of the state panel for final approval.
Marathon is expected to expand its corporate headquarters campus in Findlay to accommodate MPLX’s headquarters and, in the process, recommit to maintaining the 1,650 jobs it promised when it was itself a beneficiary of a tax-credit package itself in 2011.
MPLX was spun off as a separate entity in 2012 to distribute and store crude oil and other petroleum products for Marathon and other producers. It owns some 2,800 miles of pipeline, storage facilities in the Midwest and Gulf Coast regions, a barge dock facility on the Mississippi River just north of St. Louis, and a butane storage cavern in West Virginia.
Marathon remains a partial owner of the new entity.
David Mustine, JobsOhio’s general manager for energy, polymers, and chemicals, said he would leave it to Marathon to talk about which states made plays for MPLX. Marathon has not made its own announcement yet.
“We knew it would be highly competitive,” he said. “A company like Marathon could have located these kinds of facilities anywhere. A lot of the energy industry is based in Houston…We certainly considered the Gulf Coast to be competition as well as other areas of the Midwest and Southeast.”
Mr. Mustine also declined to discuss other elements of the incentive package, some of which are still being negotiated. The city of Findlay, the Findlay-Hancock County Alliance, and the Toledo-based Regional Growth Partnership were all part of the talks.
Two members of Marathon Petroleum’s board — Gary R. Heminger, Marathon’s president and CEO, and Steven A. Davis, Bob Evans Farms, Inc.’s chairman and CEO — also serve on JobsOhio’s board of directors. Mr. Heminger is also chairman and CEO of the new MPLX limited partnership.
But JobsOhio’s general counsel, Don Grubbs, insisted neither played a role in the deal that won the MPLX headquarters for Findlay in accordance with the board’s conflicts-of-interest policy. The non-profit corporation, Gov. John Kasich’s top priority upon taking office in 2011, has faced criticism for operating largely behind closed doors and for handling projects that can have connections with its board members.
The board first brought up the MPLX project in November when it had yet to decide whether it would be a good idea for JobsOhio to pursue it. Mr. Heminger was not present at that meeting, and Mr. Davis left the meeting after completing other non-MPLX business in accordance with JobsOhio conflicts policy, Mr. Grubbs said.
The project was first brought to JobsOhio through a consultant.
Marathon Petroleum — the largest firm in northwest Ohio, the largest oil refiner in the Midwest, and the fourth largest refiner in the country — was itself spun off from Houston-based Marathon Oil Corp.
In 2011, it received its own 75 percent tax credit lasting 15 years to retain its 1,650 Findlay jobs in addition to the 60 percent, 10-year credit to create an additional 100 jobs. The company said it has, in fact, added 220 new jobs.
The 2011 deal was consummated shortly before JobsOhio took shape and before its board was appointed by Mr. Kasich.
Mr. Mustine stressed that the 150 new Ohio jobs would be in addition to the 220 already added at Marathon Petroleum. There would, however, be some overlap in the job commitments of Marathon and its subsidiary.
For instance, Marathon’s renewed commitment to retain jobs at Findlay remains at 1,650 and does not include the 220 additional jobs created since 2011.
Mr. Mustine said having a pipeline and storage distribution system and its Fortune 500 parent based in Ohio would be an asset given the development of Utica shale oil primarily in the southeastern portion of the state.
MPLX has already announced plans to build the $140 million, 49-mile Cornerstone Pipeline from Harrison and Carroll counties to Marathon’s Canton refinery.