Shale subsidies' tab to flirt with $1B
HARRISBURG — The discovery five years ago that the Marcellus shale and its natural gas could spew big profits and cheap, homegrown energy has spurred gas-friendly state officials to run up a growing taxpayer-funded tab to encourage the use of the hydrocarbons.
Bills pending in the Republican-controlled Legislature could deliver hundreds of millions of dollars in subsidies over a decade — possibly approaching $1 billion — in addition to the expanding number of checks being written by Gov. Tom Corbett.
With the assent of lawmakers, Corbett, a Republican who says the industry has the potential to reindustrialize Pennsylvania, tapped four pots of money for more than $30 million for natural gas projects.
That includes money for a processing project by plastics maker Braskem S.A. of Brazil, pipeline construction to link facilities of French drug maker Sanofi SA, scores of compressed natural gas vehicles and about a dozen fueling stations. About one-fifth of that money is drawn from a $200 million-a-year drilling fee on the industry.
On top of that, lawmakers last year approved what could become the state's biggest taxpayer-paid economic development incentive ever — possibly in excess of $1 billion over 25 years — to entice the construction of a multibillion-dollar petrochemical refinery in Beaver County to convert natural gas liquids into ethylene for the plastics and chemicals industries. Netherlands-based oil and gas giant Royal Dutch Shell PLC is considering it.
Patrick Henderson, a deputy chief of staff for Corbett who spearheads the administration's energy policy, couldn't say how much money the administration ultimately would be willing to spend to encourage natural gas use.
Some of the subsidies were drawn from economic development incentive money that is designed to spur hiring, and it was coincidental that natural gas was a key aspect of the project, Henderson said.
Otherwise, Henderson said, the state so far has made a “relatively modest investment of dollars” for compressed natural gas vehicles and fueling stations, primarily to convert diesel-powered bus and truck fleets.
The argument for Pennsylvania's rising natural gas vehicle subsidies is that the money boosts the local economy by favoring a domestic industry and diversifies the nation's fuel sources by displacing oil that is more expensive and often from abroad. Supporters tout natural gas as a cleaner energy source, but researchers at the Engine Research Center at the University of Wisconsin-Madison and the Center for Alternative Fuels, Engines and Emissions at West Virginia University say there is very little difference in pollution from a new diesel engine and a natural gas engine.
The Corbett administration wants to strategically plant vehicles and fueling stations to encourage public and private sector fleet managers to invest their own money in the enterprise, Henderson said.
“If we can get one or two into your fleet and show you it works, you're more inclined to buy going forward,” Henderson said. “That's really the goal, to have mini-demonstration success stories in a host of fleets. Our goal is not to buy 20 vehicles for the guy who has 20 in his fleet.”
Recipients of the money include Seal Beach, Calif.-based Clean Energy Inc., Houston-based Waste Management Inc. and Philadelphia-based Sunoco Inc.
Other states offer an array of subsidies that encourage natural gas use, but a comprehensive tally does not seem to exist.
Of the bills pending in the Legislature, as much as $60 million a year in a wide-ranging transportation funding bill passed overwhelmingly by the Senate in June would be available to help the state's mass transit agencies convert their fleets to “an alternative energy source, including compressed natural gas.”
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Husband charged in ax murder of wife hangs himself in cell
- Cochranton farm specializes in growing out-of-season vegetables
- ‘Tipping point’ near for Pa. government, conservative expert predicts at Freedom Forum
- As House looks to dismantle state stores, hybrid system might be option
- Pa. Senate approves ‘paycheck protection’ constitutional amendment
- Wolf touts in-home care for seniors
- Liquor privatization bill clears Pennsylvania House panel
- State lawmaker wants Congress, NCAA to examine decision on Penn State sanctions