GOP's energy promises are really difficult

Marc Levy, Associated Press

Republican Bill McSwain pledges to be a pro-energy governor by “turning on the spigot of natural gas.” Another hopeful, Dave White, says he wants Pennsylvania “to be the energy capital of the world.” A third candidate, Lou Barletta, says having a glut of natural gas in the ground without a pipeline is “like being in college and having a keg of beer without a tap.”

In Pennsylvania, the No. 2 natural gas producer after Texas, the importance of the industry is emerging as a top issue among Republican contenders for governor before the state’s May 17 primary.

The issue has taken on new urgency in the aftermath of Russia’s invasion of Ukraine, which has revived the debate over how to enhance domestic energy production and spurred a pledge from President Joe Biden to increase liquefied natural gas exports to Europe to undercut Russia’s leverage there.

Despite promises by the Republican candidates, however, there are constraints on what they could do in office. While governors have influence over state agencies and lawmaking, they have limited ability to grant what the industry really wants, like building interstate pipelines and big refineries. That’s because other states and federal policy are involved.

“They don’t control those things,” said David Masur, executive director of Pennenvironment, a Philadelphia-based environmental group. “Their power, if elected, stops at the border of Pennsylvania. And if other states have aggressive climate-change agendas, clean-energy agendas, the marketplace makes clean energy competitive, if not cheaper, than fossil fuels.”

Industry leaders describe drilling in Pennsylvania as strong and access to gas as plentiful, with established pipeline rights of way and thousands of wells waiting to be drilled into the nation’s most prolific gas reservoir, the Marcellus Shale.

But for examples of Pennsylvania’s limits, look no farther than its borders.

Democratic governors in neighboring New York and New Jersey have effectively blocked the construction of major interstate pipelines — the Constitution and the PennEast pipelines — carrying gas from Pennsylvania to big metropolitan areas and, possibly, yet-to-be-built refineries to export liquefied natural gas, or LNG.

The states seem unlikely to change that position anytime soon.

New Jersey Gov. Phil Murphy, who won reelection last year, “remains committed” to his promise to reach 100% clean energy in the state and an 80% reduction in planet-warming greenhouse gas emissions by 2050, his office said.

Interstate pipelines and LNG facilities also require federal approval and face opposition from environmental groups, which say natural gas mustn’t be a long-term energy solution because it emits the potent greenhouse gas methane.

The industry and its Republican allies contend that natural gas can make the U.S. more energy independent and counter Russia’s influence, while being planet-friendlier than higher-carbon oil and coal. Toby Rice, president and CEO of Pittsburgh-based gas exploration firm EQT Corp., projects that it would take 6,500 miles (over 10,400 km) of pipeline and $250 billion in LNG infrastructure in the U.S. to serve the U.S. and Europe and substantially cut coal use worldwide by 2030. Still, scientists are increasingly alarmed at the growing amount of natural gas infrastructure and say it will threaten efforts to slash carbon emissions to necessary goals.

The presumed Democratic nominee for governor, state Attorney General Josh Shapiro, talks of balancing natural gas with expanding renewable energy. Shapiro ran for attorney general vowing to hold the gas industry accountable. He challenged the move by President Donald Trump’s administration to allow LNG to be shipped by rail, criminally charged several companies and issued a grand jury report on the need to toughen industry regulations.

During his campaign for governor, he has taken a middle-of-the-road stance - partly a nod to influential labor unions whose workers build power plants, pipelines and refineries. He says it’s a “false choice” to have to pick between “environmental justice and the dignity of work and energy opportunity.”

The current governor, Democrat Tom Wolf, has what environmental activists and the industry see as a mixed bag. Wolf, who is constitutionally term-limited, is aiming to make Pennsylvania the first major fossil-fuel state to impose a carbon pricing plan, although his regulatory effort is currently held up in court. At the same time, he pursued higher taxes on natural gas production, but missed meaningful opportunities to combat greenhouse gases, environmental advocates say.

He also stepped up for the industry: His administration issued permits for major gas-fired power plants, pipelines and refineries, and Wolf himself signed off on tax breaks to lure natural gas synthesis plants.

Now, interest in building big, natural gas-fueled projects is surging, and a new governor could take office in 2023 with opportunities to land some. Fulfilling Biden’s promises to surge natural gas exports to Europe could mean expanding existing pipelines across Pennsylvania and building new LNG terminals, possibly along the Delaware River near Philadelphia.

“We think that there is an opportunity for Pennsylvania to become a major LNG exporter,” Rice said.

Beyond LNG, industry boosters are optimistic about landing a gas-fed hydrogen fuel plant — funded by Biden’s infrastructure law — in southwestern Pennsylvania, plus the construction of refineries across Pennsylvania’s rural gas fields to make fertiliser, chemical products and fuels.

Meanwhile, a proposal for an LNG refinery in northeastern Pennsylvania that had envisioned transporting its product by rail to a Philadelphia-area export terminal is on hold — and Biden’s administration is moving to suspend the Trump-era LNG-by-rail rule.

While a governor might not single-handedly give the gas industry what it wants, he or she could be helpful, industry advocates say.

Barletta, White, McSwain and others in the nine-person GOP primary field for governor talk about stripping down unnecessary regulations or speeding up permitting times.

That might help lure a big project, as would slashing Pennsylvania’s corporate tax rate, said Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry.

Being a vocal advocate could help too, like lobbying a fellow governor in a neighboring state to permit a pipeline, Barr said.

In recent days, Pennsylvania’s Republican-controlled Legislature took up a pro-industry package of measures, including a resolution urging the governors of New York and New Jersey to allow the construction of gas pipelines from Pennsylvania.

During that debate, Democratic state Rep. Greg Vitali said the idea that a legislative resolution would sway those governors is “fanciful.”

“They’re going to make their own decisions with regard to which pipelines they accept,” Vitali said, “and which pipelines they reject.”