by Gordon Tomb
With Democrat Josh Shapiro as a newly inaugurated governor and a brand new legislative physique, Pennsylvania will both shine as an vitality famous person or proceed down the dim path of financial decline.
The commonwealth is a nationwide chief in vitality manufacturing regardless of being stifled by onerous rules, market-distorting subsidies and an irrational hostility towards fossil fuels.
Shapiro’s vitality insurance policies can have implications for the facility grid’s reliability all through the Northeast, 1000’s of jobs within the coal and pure fuel industries, and the competitiveness of producers statewide. Residential electrical energy charges—already up a median of 73 % since 2020—will proceed to erode Pennsylvania’s competitiveness except the established order adjustments.
In 2021, the Keystone State exported extra electrical energy than every other state, in line with the Impartial Fiscal Workplace. The U.S. Vitality Data Administration lists Pennsylvania as the second-largest internet provider of whole vitality to different states, after Texas, and the third-largest coal-producing state, after Wyoming and West Virginia. Pennsylvania pure fuel manufacturing hit a report 7.6 trillion cubic ft in 2021, second solely to Texas.
Vitality producers managed that regardless of a regulatory regime inclined to abuse its authority. For instance, the Division of Environmental Assets (DEP) of the earlier governor, Tom Wolf, tried to impose new rules on coal mines that straight contradict current regulation. DEP withdrew the proposal solely after the Impartial Regulatory Evaluation Fee disapproved it.
Throughout his tenure, Wolf repeatedly tried to enact a severance tax on pure fuel—an business already burdened by greater than $6 billion in particular taxes and costs over the past decade. In 2019, Wolf started his unilateral push for entry into the Regional Greenhouse Fuel Initiative (RGGI), whereas being opposed by legislators, labor unions, and the general public. RGGI, at the moment beneath evaluation within the courts, is a carbon tax on electrical energy mills that may value Pennsylvania shoppers $800 million a 12 months and easily transfer many of the emissions to neighboring states.
Will Shapiro take a extra affordable method to vitality regulation?
Shapiro’s been lukewarm in regards to the carbon tax, saying it’s “not clear” whether or not RGGI would “tackle local weather change, defend and create vitality jobs and guarantee Pennsylvania has dependable, inexpensive and clear energy for the long run.”
With allies in each the environmental and labor communities, Shapiro’s marketing campaign rhetoric alternately addressed the pursuits of each—talking generally of allowing reform to hurry approvals of vitality tasks and different instances of severely limiting gas-well drilling. “Josh refuses to just accept the false selection between defending jobs or defending our planet,” stated his marketing campaign web site.
As legal professional normal, Shapiro charged pure fuel drillers and pipeline operators with criminality for offenses ordinarily dealt with as civil issues. Trade supporters fear that such therapy dampens enterprise funding within the state. The environmental left labels Shapiro’s felony prosecutions of producers as solely a “slap on the wrist.”
What we do know is that Shapiro proposes to extend various vitality’s share of retail electrical energy gross sales from 18 to 30 %—a 67 % enhance. The choice vitality program already prices shoppers $104 million a 12 months in subsidies and places energy crops fueled by coal or fuel at a drawback.
Whereas some rules are necessary for well being and security, there are too many onerous restrictions that maintain the state from producing inexpensive vitality. Shapiro ought to assist a constitutional modification that ensures the legislature can evaluation and disapprove rules that unduly prohibit vitality manufacturing. Elected representatives, not unelected bureaucrats, ought to have the ultimate say over these expansive and dear rules.
Shapiro must also again regulatory reform that enables energy crops and properly drillers to proceed to function and make use of tens of 1000’s of individuals. Three at-risk energy crops alone assist greater than 8,000 jobs.
Lastly, Shapiro ought to withdraw from the RGGI carbon tax and streamline rules on the state’s fossil gasoline business. This is able to promote inexpensive vitality manufacturing and energy grid stability and assist unleash Pennsylvania’s vitality potential.
In 2023, championing good vitality coverage shall be essential for Shapiro. Creating Pennsylvania’s deposits of pure fuel and coal would improve its function as a worldwide powerhouse and promote the well-being of Pennsylvanians. However additional limiting Pennsylvania’s vitality potential will proceed to drive investments, jobs, and other people out of the state.
This commentary was first printed at Actual Clear Vitality, January 22, 2023, and will be accessed right here.
Gordon Tomb is a senior fellow with the Commonwealth Basis, a Pennsylvania-based free-market suppose tank and a senior advisor with the CO2 Coalition, Arlington, Virginia.
