PA’s Conflicted Relationship with Natural Gas

The government giveth, and the government taketh away. Nowhere is this more apparent than in Pennsylvania’s relationship with the natural gas industry.

On the one hand, Gov. Wolf offers a Pipeline Investment Program that would provide $24 million in matching grants to businesses, schools and hospitals for connections to gas pipelines.

On the other, the Pennsylvania Department of Environmental Protection (DEP) proposes new rules on already highly regulated production activities. The gas industry filed a legal challenge to some of the rules. They claim the regulations will cost $2 billion a year “without providing meaningful environmental benefits.” Excluding initial start-up costs, DEP estimates the maximum annual cost of the regulations to be $31 million, or about $24,000 a well.

Meanwhile, Braskem America, a plastics manufacturer, chooses Texas over Marcus Hook, Pa., for the location of a $500 million plant because of Pennsylvania’s lack of pipeline capacity to deliver feedstock.

At the same time, pipeline projects are missing in-service targets due to regulatory delays.

Delayed by about 18 months is the start-up of Sunoco Logistics’ $2.5 billion Mariner East 2 project, which will transport natural gas liquids from western Pennsylvania to Marcus Hook. The company is responding to requests from the DEP for additional information on permit applications.

In New York, the Constitution Pipeline, has languished since April when New York regulators denied the project a water-quality permit. The denial came four months after New York Gov. Cuomo had approved $2 billion in economic-development grants that included an extension from the pipeline to a manufacturing plant.

Pennsylvania should learn from these missed opportunities and stop efforts to finance pipeline extensions to private businesses with tax dollars. After all, Governor Wolf just lamented policies that put well-connected businesses before taxpayers:

” . . . too often, special interests and the well-connected are put before Pennsylvania families and the middle class.”

So why not return to citizens the $24 million being transferred from an “underutilized” fund for alternative energy projects? Instead of doling out politically-selected grants, the Governor should focus on ways to balance safety with enhancing the competitiveness of one of the state’s most promising enterprises.

In general, state government is too focused on doling out taxpayer cash and promulgating regulation than on fostering an environment for good-paying jobs and economic growth.