Citizens for Pennsylvania’s Future (PennFuture) is calling on the commonwealth to explore “green initiatives” for the oil and gas industry, which could help in the economic recovery from Covid-19.
In a report titled “A Green Stimulus and Recovery Platform for Pennsylvania,” PennFuture said Pennsylvania’s economy will need to recover from the ongoing pandemic, and officials should implement initiatives such as the Regional Greenhouse Gas Initiative. The initiatives require polluting systems to purchase annual credits to emit carbon. The credits could be used to support recovery efforts from Covid-19.
PennFuture estimated the cost to implement the initiatives at $2.8 billion, which could preserve or create up to 389,000 jobs in Pennsylvania.
Wexford, PA-based Pennsylvania Independent Oil and Gas Association (PIOGA) said the initiatives would not help as PennFuture has indicated.
“PennFuture claims in its Green Stimulus Report that its proposals will improve Pennsylvania’s economic recovery from the Covid-19 pandemic, when, in fact, they would do the exact opposite,” PIOGA President Dan Weaver told NGI. He said Gov. Tom Wolf’s “ill-advised plan to unilaterally enter into the Regional Greenhouse Gas Initiative will quickly kill thousands of jobs in energy-producing counties in southwestern Pennsylvania and steadily erode additional jobs in energy-intensive industries, such as steel manufacturing and paper mills.”
PennFuture also called for legislators to explore eliminating subsidies for fossil fuels, which would include “exempting oil and gas reserves from property tax assessments.”
Pennsylvania, at the heart of the No. 1 natural gas source in the Lower 48, the Appalachian Basin, more than doubled electricity generated from gas to 36% from 2010 to 2018. Over the same period, coal fell by more than half to 21%, according to the Energy Information Administration (EIA).
PennFuture said that subsidies for fossil fuels should be reviewed, as well as tax expenditures redirected to “cleaner alternatives.” In addition, the group urged imposing a severance tax on gas drilling production to catalyze interest, depending on the amount of gas produced by wells.
A severance tax would support additional proposals “as Pennsylvania transitions away” from the gas drilled from unconventional formations to “more sustainable economic development opportunities,” PennFuture’s report said.
About half of Pennsylvania households rely on gas as the primary home heating fuel, according to the EIA. In 2017, Pennsylvania was the third largest coal-producing state and the third largest coal exporter.
“State investment incentives for manufacturers using ethane to produce consumer goods from Pennsylvania-produced natural gas will create good paying jobs as the commonwealth works to emerge from the pandemic,” Weaver said. A severance tax “would drive natural gas producers to other states with far more attractive climates for drilling shale wells.
“Those producers and the service companies that support them would take jobs, taxes and impact fee taxes with them in the process. Penn Future’s proposal is laughable.”
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