DV Journal

Environmental activists call it a “methane fee.” The energy industry calls it a “natural gas tax.” Either way, Pennsylvania consumers are likely to feel the effects in their pocketbooks.

The U.S. House of Representatives is expected to vote this week on its version of the budget reconciliation bill — also known as the “Build Back Better” bill — which includes increased fees on methane emissions. Methane is a byproduct of oil and natural gas production, and as a result, the fee would be an increase in the cost of production.

Environmentalists say reducing methane is essential to the fight against climate change. At the COP26 meeting in Scotland last week, the United States announced it will participate in the Global Methane Pledge to cut methane emissions 30 percent by 2030.

“Methane has more than 80 times the warming power of carbon dioxide over the first 20 years after it reaches the atmosphere,” says Environmental Defense Fund (EDF) on its website. “Even though CO₂ has a longer-lasting effect, methane sets the pace for warming in the near term.”

As National Geographic reports, “Whereas carbon dioxide persists for centuries, most methane converts to carbon dioxide or gets cycled out of the atmosphere within about a decade.”

Meanwhile, two of the world’s biggest methane emitters — China nor Russia — refused to sign the Global Methane Pledge.

And energy producers point to America’s surging costs to heat their homes this winter and the wider inflation problem as evidence this is the wrong time to add costs to consumers’ utility bills.

“This is nothing more than a tax on natural gas at a time when policymakers should be focused on solutions that support affordable, reliable energy while reducing emissions,” says API Senior Vice President of Policy, Economics and Regulatory Affairs Frank Macchiarola.

“We must continue to drive down methane emissions without adding new burdens on American families and businesses,” added said Karen Harbert, President and CEO of the American Gas Association. “Our analysis indicates that the proposed tax could increase natural gas bills from 12 percent to 34 percent, depending on the variation of the proposal assessed.”

Sen. Joe Manchin, a Democrat representing natural-gas producing West Virginia, has been reluctant to support legislation with a tax or fee on methane. As a result, House Democrats have been trying to find ways to change the terminology and get Manchin’s blessing once the bill is approved in the House and sent to the Senate. Democrats’ have a razor-thin majority in both chambers and need the support of every Democrat in the Senate.

Winning over Manchin has not been, and will not be, easy.

“Major oil and gas companies are actively investing in, developing, and using new technologies to detect and repair leaks, which are known to be a public health risk and contribute to climate change,” Manchin said in August 2020.

Delaware Valley U.S. Reps. Madeleine Dean (D), Mary Gay Scanlon (D), and Brian Fitzpatrick (R) declined to respond to requests for comment about the upcoming Build Back Better bill vote.

Meanwhile, API’s Frank Macchiarola says methane is already being regulated.

“The direct regulation of methane by the EPA is the most impactful way to build on the downward trend of methane emission rates in key producing regions rather than a duplicative and punitive natural gas tax that would only hurt American consumers and undermine the economic recovery,” says Macchiarola.

Gordon Tomb, senior adviser to CO2 Coalition, does not see a need for the regulations.

“Methane makes up a minuscule portion of the atmosphere — less than two parts per million — and together with carbon dioxide contributes an estimated 0.012 degrees C a year — an amount too small to even measure,” says Tomb. “Regulating emissions of either gas has no basis in science and imposes an unnecessary burden on businesses and the people who buy their products.”

And, Tomb added, “When politicians are talking about regulating methane, they are usually talking about taxing methane that gets leaked to the environment during production operations, treating that methane as a pollutant,” says Tomb. “Of course, methane is put into the atmosphere from all kinds of sources, and in the scheme of things the amount in the atmosphere is quite small irrespective of where it is coming from.”

The Marcellus Shale Coalition has also warned that taxes or fees would be bad for everyone.

“Layering more taxes on strongly regulated domestic energy production increases costs for those who produce and rely on these essential resources, with low-and fixed-income families shouldering the disproportionate share of the tax hike,” the group wrote in a September letter that included the Gas & Oil Association of West Virginia and the Ohio Oil & Gas Association.

And while organizations including the Sierra Club say fossil fuel organizations do not care about the environment, Marcellus Shale Coalition begs to differ.

“Our members are fully committed to improving air quality and further reducing all emission sources, particularly methane since it is the very product we sell, through leveraging best available technologies and practices.”

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Reports that TV star Dr. Mehmet Oz plans to run for the U.S. Senate in Pennsylvania as a Republican had tongues wagging this week.

Doctors have served in Congress, so it would not be unprecedented.  Currently, several Republican doctors are serving in the Senate including Rand Paul of Kentucky, Bill Cassidy from Louisiana, Kansan Roger Marshall, and John Barrasso of Wyoming.

In the House, doctors Larry Bucshon, a thoracic surgeon, represents Indiana, and Michael Burgess, an OB/GYN represents Texas.

Sen. Pat Toomey, a Republican who currently serves Pennsylvania, is not running for reelection, leading to a long list of candidates, both Democrat and Republican, who are vying for Toomey’s seat.

But if he decides to run, Oz wouldn’t be the only doctor in the race.

Democrats Val Arkoosh, chair of the Montgomery County Commissioners and an anesthesiology specialist, is a doctor. Kevin Baumlin, chair of Pennsylvania Hospital’s emergency department, is also running.

“We have many great candidates for the Senate and governor positions and in the final analysis the people of Pennsylvania will make the ultimate decision and select the candidates they believe can represent them at the highest level of leadership excellence,” said Dr. Nche Zama, a cardiothoracic surgeon from the Poconos, a Republican who is running for governor.

Dr. Robert Sklaroff, who practices hematology, oncology, and internal medicine and is affiliated with Nazareth Hospital, said of Oz, “It seems he has not reflected the fundamental views of the Republican Party, both regarding domestic policy (having supported a lot of progressive Democrats) and foreign policy (having supported Turkey’s Islamist President Erdoğan). From a medical perspective, he has hawked ‘miracle cures’ that aren’t based upon peer-reviewed data. My major concern is election integrity and he has never—to my knowledge—addressed violations of election integrity in 2020 which, in my humble opinion, continues to be the major threat to democracy.”

On a lighter note, Dr. Bob Michaelson, a retired Montgomery County resident, said, “I guess Dr. Oz (meets) the constitutional qualifications of being at least 30 years old, a U.S. citizen, and a resident of his state. Being a public TV personality seems to have worked for others. I don’t know how well he would legislate, but I would prefer the Wizard of Oz in most cases.”

And forensic pathologist Dr. Jonathan Briskin said, “I think he should stay on TV.”

Oz, if he decides to enter the race, would face a crowded field including author and veteran Sean Parnell, who was endorsed by former President Donald Trump; former ambassador Carla Sands; Montgomery County businessman Jeff Bartos; TV personality and author Kathy Barnette; and Montgomery County lawyer Sean Gale on the Republican side. Democrats include Lt. Gov. John Fetterman, U.S. Rep. Conor Lamb, and state Rep. Malcolm Kenyatta.

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Gov. Tom Wolf signed an executive order Thursday raising the minimum wage for workers at companies that receive state grants, loans, or tax relief to $13.50 an hour. It is now the minimum hourly rate for state employees.

At a press conference near Pittsburgh Thursday, Wolf pointed out the current $7.25 minimum wage in Pennsylvania is less than workers are paid in all surrounding states. New Jersey’s minimum wage is $12. New York’s is $13.20, Ohio’s is $9.30, and West Virginia’s is $8.75.

Wolf also called on the state legislature to pass laws requiring paid sick leave, institute federal workplace protections, and raise the minimum wage for all workers to $12.00 with a path toward $15 an hour by 2024.

“With our economy on the comeback, there are so many job openings that people can select the option that is best for their family. This has created a tremendous moment for workers,” said Wolf in a press release. “With Pennsylvanians’ renowned work ethic, this is an opportunity to improve jobs and workplaces. My workforce plan will create safer workplaces, guarantee paid leave, and promote higher wages for workers.”

But Commonwealth Foundation Vice President Nate Benefield said Wolf’s actions were unnecessary because wages are already rising.

“Everything in Wolf’s action Thursday was meaningless and unnecessary,” said Benefield. “Wages have consistently risen in Pennsylvania because of market forces, and are rising now due to high demand for labor. Government mandates are neither helpful in raising wages or helping employers fill jobs. All this activity was simply virtue signaling to appeal to Wolf’s campaign donors (government union bosses).”

And  Senate Majority Leader Kim Ward (R-Westmoreland) said, “Pennsylvanians are tired of still dealing with the effects of the political agenda forced on them throughout the pandemic. From selective business closures, to mask and vaccine mandates, to breaching Pennsylvanians’ personal health information, as well as the inability to properly process unemployment claims, Pennsylvanians are worn out by the uncertainty presented by the Wolf administration.”

Wolf’s announcement is “one more attempt to bypass the voice of the people,” Ward added. “The efforts outlined today to protect Pennsylvania workplaces is a ruse that further opens the door to executive branch overreach, crushes small businesses, and generates greater confusion for employers to keep their employees employed and safe. Pennsylvanians have already spoken when it comes to government interference in our lives and workplaces when they voted to limit the governor’s executive powers with the passage of the constitutional amendment in the primary.”

Pennsylvania Chamber of Commerce CEO Gene Barr said the Chamber “appreciates the governor’s intent” but warned of unintended consequences. “For example, requiring strict wage and benefit standards for employers to qualify for state aid may not impact larger corporations but could pull critical lifelines from small businesses already struggling through pandemic and workforce crises,” Barr warned in a statement.

“The governor has also called for public shaming of employers who violate labor laws,” Barr said.  “We certainly support holding accountable those who skirt the law, harming employees and creating an unfair advantage over law-abiding competitors. At the same time, policymakers should recognize that violations are often unintentional and eventually remedied. Employment laws and regulations are notoriously complicated; such as similar federal and state laws that include subtle differences creating what’s known as the ‘compliance trap.’

The governor mentioned employers owing unemployment compensation back taxes, but some may not even be aware they owe, especially after the chaos of the last year and a half.  We would hope a public list of ‘bad actors’ only includes companies who violate the law and willfully fail to comply after exhausting appeals or any administrative resolution process,” Barr said. “We look forward to working with the administration as it further develops these policies.”

While Republicans say Attorney General Josh Shapiro’s announcement of criminal charges against Energy Transfer is really about politics and not the pipeline, Pennsylvania’s green activists are transparent about what they want.

Kill the Mariner East 2. And do it now.

Which raises the question, what happens if they succeed?

“Now that the attorney general and the grand jury have done their job, there should be no question: It is time for an immediate halt of the Mariner East pipeline project,” green activist Rep. Danielle Friel Otten (D-Upper Uwchlan) said after Shapiro’s press conference. “I am once again calling on Gov. Wolf, the DEP, and the PUC to revoke Energy Transfer’s permits to operate in Pennsylvania.”

State Sen. Katie Muth (D-Chester/Montgomery/Berks) joined Friel Otten and a handful of Pennsylvania progressives to make the same demand in a letter to the Wolf administration.

“We urge you to take immediate action to halt the Mariner East Pipeline project, revoke the company’s permits to operate in Pennsylvania, issue a moratorium on all future permits, and ensure all impacted residents have clean drinking water in their homes through a public water provider,” they wrote.

It’s an extreme stance, particularly given the $2.5 billion, 350-mile project transporting natural gas liquids from western Pennsylvania to the Marcus Hook facility is nearly completed, and thousands of energy sector jobs are at stake.

“Mariner East 2 is critical because the natural gas in southwestern Pennsylvania comes out of the ground with all kinds of other chemicals,” says David N. Taylor, president and CEO of Pennsylvania Manufacturers’ Association. “The natural gas itself is methane, but the methane comes along with ethane, butane, propane, pentane, and natural gasoline, so these are feedstocks that manufacturers can use to make things.”

That is why Taylor says it is so important to get those petrochemical feedstocks from where they are harvested to where they can be processed and then used as a manufacturing input.

“That’s the purpose of Mariner East 2,” says Taylor. “It’s to deliver those inputs from southwestern Pennsylvania to southeastern Pennsylvania.”

Energy Transfer projects the Mariner East and Marcus Hook projects will generate more than $100 million a year for Pennsylvania’s economy. Critics dismiss those numbers, but they concede the energy sector is a key part of the state’s finances.

Speaking about natural gas at an October 4 meeting of the Pennsylvania Senate Environmental Resources & Energy Committee, David Callahan, president of Marcellus Shale Coalition, said Pennsylvania has benefited greatly.

“Thanks to our abundant natural gas resources, along with our embrace of competitive energy markets, Pennsylvania has benefited from tens of billions of dollars in investment and several hundred thousand direct and indirect jobs, including those in the building trades,” said Callahan. “Nearly $14 billion has been invested to date in new natural gas-powered electric generation, not to mention the billions of dollars of investment and thousands of jobs associated with downstream utilization of natural gas and natural gas liquids such as the petrochemical facility in Beaver County that will open up considerable downstream opportunities.”

Callahan went on to add that these natural gas-related investments across the state have brought “billions of dollars to our communities and helped support thousands of more Pennsylvanians with family-sustaining wages.”

If activists succeed in shutting down the pipeline, it would leave manufacturers struggling to get natural gas-related raw materials they need.

“There are many manufacturing processes that require a temperature point that can only be met with natural gas,” says Taylor. “You may have heard about the Shell investment to turn ethane into polyethylene, and polyethylene is at the top of the top of the value chain that — depending on how you process it — can yield every kind of plastic, rubber, paint, glaze, sealant, adhesive, and solvent, all  consumer products people handle and use every day.”

And then there’s the looming national shortage of natural gas. The EU is already suffering through an energy crisis so severe that some nations are considering a return to coal. Lack of access to fuels, natural gas in particular, is driving electricity prices to all-time highs in Europe.

Now come warnings the U.S. may face supply issues as well. Ernie Thrasher, chief executive officer of Xcoal Energy & Resources LLC, told Bloomberg utility companies fear fuel shortages this winter could trigger blackouts.

“These utilities are worried the assets they have can’t get enough fuel,” Thrasher said. “There are people of high authority at large utilities who are deeply concerned.”

Pipeline politics aren’t helping. There has been a spate of pipeline closings due to political pressures since President Joe Biden took office in January. He issued an executive order canceling the Keystone XL pipeline on his first day on the job. In July, Dominion Energy and Duke Energy announced they were canceling the Atlantic Coast pipeline due to “legal uncertainty” in the face of repeated challenges from pipeline opponents. And the plug was pulled on the PennEast pipeline just months after winning a major victory before the Supreme Court for similar reasons.

If convicted, Shapiro’s office says Energy Transfer will be sentenced to fines and restitution.

On this edition of the Delaware Valley Journal “On The Air,” State Sen. Dan Laughlin talks about his plans to run for governor and the pitch he plans to make to Pennsylvania GOP primary voters:

‘Nobody hates me.’

Is there room in the Grand Old Party of 2021 for a consensus-building candidate? Laughlin thinks there is and he explains why.

With DVJournal News Editor Linda Stein and Michael Graham of InsideSources.

The Wolf administration wants the Keystone State to have a carbon-free electric grid by 2050. But not all Pennsylvanians are amped by the idea.

“I think it’s very good for Pennsylvania that Wolf has only one more year left in his term of office and he can’t run for governor again,” says chairman of the Pennsylvania Environmental Resources and Energy Committee Daryl Metcalfe (R-Butler County). “These types of policies are just going to drive up the cost of energy that we all need in our daily lives.”

Gov. Tom Wolf (D) announced the Pennsylvania Climate Action Plan 2021 on Wednesday, calling for statewide action on climate change by all sectors of the state.

“As thousands of Pennsylvanians try to recover from historic flooding and tornadoes related to the remnants of Ida this month, the message is clear: we must move now out of a reactive mode on climate change,” Wolf said.

The Wolf administration’s Department of Environmental Protection echoed the governor.

“As a result of increasing greenhouse gas emissions from human activity, Pennsylvania’s average temperature has risen nearly 2 degrees Fahrenheit since 1900, bringing more heatwaves and increased intensity of extreme weather events, including heavy rainfall and flooding,” said DEP in a statement ahead of the climate plan announcement. “Pennsylvania is on course to climb another 5.9 degrees by the middle decades of this century.”

There is no data showing any increased intensity in extreme weather. And there has been no increase in flooding.

“These conclusions of the IPCC, indicate that it is simply incorrect [emphasis in original] to claim that on climate time scales the frequency or intensity of extreme weather and climate events has increased for: Flooding, drought (meteorological or hydrological), tropical cyclones, winter storms, thunderstorms, tornadoes, hail, lightning or extreme winds,” writes Professor Roger Pielke, Jr. of the University of Colorado.

There are 18 recommendations in Wolf’s Climate Action Plan. They include updating and enforcing building codes, improving energy efficiency in the residential and commercial sectors, increasing the use of on-site solar power in those sectors, adding to the number of electric vehicles, and using programs and incentives to increase energy efficiency in agriculture.

“We’ll get our biggest greenhouse gas emission reductions from creating a carbon-free electricity grid that uses renewable and nuclear energy,” said DEP Secretary Patrick McDonnell at a virtual press conference.

“In a world of wishful thinking, policy changes should be based on sound science so that new regulations are reasonable, cost effective, and achievable with existing technology,” says David N. Taylor, president and CEO of Pennsylvania Manufacturers’ Association.

“Gov. Wolf’s  ‘Action Plan’ fails all of these bright-line tests in moving the goal posts on Pennsylvania’s productive sector,” says David Taylor. “Our manufacturers require reliable and affordable energy to add value and satisfy customers, and private sector innovation has led to dramatic decreases in energy-related emissions over the past two decades.”

As these innovations advance, Taylor says we will continue to drive economic growth while improving our environment, all without unnecessary and costly intervention from  Wolf Administration.

“Among those who can’t afford such absurd illusions are more than 8,000 workers whose livelihoods depend on coal-fired plants in Indiana and Armstrong counties and hundreds of businesses and millions of consumers whose profitability and wealth would be eroded by higher electricity prices resulting from Wolf’s so-called green grid,” says Gordon Tomb, senior fellow for the Commonwealth Foundation.

Leo Knepper at Citizens Alliance of Pennsylvania (CAP) agrees.

“Wolf is living in some sort of an alternate reality if he thinks that something like a zero-carbon energy grid is desirable or realistic for Pennsylvania,” says Leo Knepper, political director for Citizens Alliance of Pennsylvania (CAP). “A paper released in 2016 estimated that the clean energy mandates in place at that time would cost the commonwealth over $700 million in higher electricity costs and 11,000 jobs by 2025.”

The impact of the types of mandates the governor is now suggesting would be far worse, says Knepper.

“Between 2000 and 2018, carbon emissions from energy production dropped by 20 percent, and that’s not due to new mandates,” says Knepper. “Carbon output dropped because natural gas became more price competitive and it is a cleaner-burning fuel.”

As lower-emission energy generation becomes more competitive on a price per kilowatt-hour, Knepper says its consumption will increase and carbon output will naturally decrease further.

“Government trying to front-run the technology and force adoption will result in much higher costs, job losses, and a lower standard of living overall,” says Knepper.

Earlier this year, U.S. Steel announced its plans to cancel a $1.5 billion investment in Mon Valley Works, a decision that affected 3,000 workers. Critics blamed it on the environmental policies from Wolf and President Joe Biden.

“The loss of this $1.5 billion project is a devastating blow to the economy of southwestern Pennsylvania and a slap in the face to the hard-working blue-collar families who were counting on these jobs,” said Pennsylvania state Republican legislators in a May statement. “It is a clear reminder that we need a commonsense, cooperative strategy on energy and the economy.”

“What they announced is the kind of socialist pie-in-the-sky that fits well with Biden’s agenda and AOC’s agenda and The Squad’s agenda from D.C.,” says Metcalfe. “I think Wolf is certainly trying to attract attention from Biden so that when he’s done harming Pennsylvania through his gubernatorial work that he may be able to attract Biden to try to bring him into his administration.”