Lawmakers Fight Wolf on Cap and Trade Plan

Pennsylvania sits at the epicenter of what energy industry analysts aptly describe as the “natural gas revolution” that created hundreds of thousands of new jobs and reduced carbon dioxide emissions.

In fact, Pennsylvania is second only to Texas in terms of natural gas production, and second only to Wyoming as a “net supplier of energy to other states” according to the Energy Information Administration. But this could all change if Governor Wolf pulls the commonwealth into a multi-state cap and trade agreement that imposes limits on carbon dioxide emissions.

Innovative drilling techniques have made it possible to access large deposits of gas in the Marcellus Shale, which cuts across a large portion of the state. This natural gas revolution has had a positive transformative impact on the economy. Recent studies show the natural gas industry has produced hundreds of thousands of jobs for Pennsylvania while pumping tens of billions of dollars into the state’s economy.

The best part? It’s helping to heal the environment.

Forbes reports that the development of the Marcellus Shale and the expanded use of natural gas has enabled Pennsylvania to reduce Co2 emissions by 30%. Why, then, is it necessary for the state to become part of the Regional Greenhouse Gas Initiative, commonly known as RGGI? That’s a question lawmakers in both parties are asking as they advance legislation to prevent Wolf from joining the agreement without General Assembly approval.

The Regional Greenhouse Gas Initiative is a compact of New England and Mid-Atlantic states that currently includes Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, Vermont, and New Jersey. Virginia is set to join in 2021. RGGI empowers government officials with the authority to implement “cap and trade” measures to place an upper limit or “cap” on the amount of Co2 emissions that power plants can emit, while also creating “allowances” within interstate auctions that may be traded back and forth among companies subjected to the Co2 caps.

Wolf issued an executive order in October 2019 instructing his Department of Environmental Protection to begin formulating regulations that would enable Pennsylvania to enter the multi-state climate agreement. The deadline for the department to present a regulatory plan to the state’s Environmental Quality Board is September 15.

In the meantime, the General Assembly passed legislation that prohibits Wolf from joining RGGI and imposing carbon taxes without legislative approval. Yesterday the Senate passed House Bill 2025 and earlier in the week the Senate Environmental Resources and Energy Committee passed Senate Bill 950 out of committee. Both bills include language that reaffirms the General Assembly’s authority over tax policy while making it clear that Wolf’s Department of Environmental Protection cannot act unilaterally “to abate, control, or limit carbon dioxide emissions by imposing a revenue-generating tax or fee on carbon emissions.”

Notably, the House bill was co-sponsored by seven Democrats, and passed by a vote of 130-71 in July. That’s just six votes shy of a veto-proof majority. The final Senate vote on HB 2025 also received bipartisan support. Wolf has indicated he will veto the legislation.

A press release from Sen. Gene Yaw, the Republican chairman of Environmental Resources and Energy Committee, criticized Wolf’s “unilateral actions” while calling on the governor to rescind his executive order.

“Highlighting Governor Wolf’s unilateral decision and ‘go-it-alone’ approach, members of the Committee noted that the $300 million annual tax on carbon will be paid directly by Pennsylvania electricity consumers and employers alike, while forcing in-state plant closures and boosting energy production in surrounding states, like Ohio and West Virginia,” the release said. “The members have called on the governor to rescind his Executive Order instructing DEP to participate in the RGGI.”

The House and Senate have both held extensive hearings on RGGI and the impact it could have on Pennsylvania. Caleb Stewart Rossiter, executive director of the Co2 Coalition, challenged the Wolf administration’s assumptions about Co2 during an August hearing.

“We are not in a Co2 driven climate crisis; that is a scientific fact,” Rossiter said in his testimony. “Some models predict we may be in one in a hundred years, but even their estimated damages pale next to the fossil-fuel increase in wealth we will have to manage them. And remember, there are benefits to Co2 emissions as well; since the molecule is a crucial plant and plankton food that improves crop and ocean productivity.”

Carl Marrara, vice president of government affairs for the Pennsylvania Manufacturers’ Association, echoed the sentiments of many during a June hearing before the Senate when he told committee members that RGGI would result in job losses without producing any environmental improvements.

"If Pennsylvania enters RGGI, not a single atom of carbon will be lessened because the power generation will just transfer further west to Ohio or West Virginia and be sold back to us for a higher price,” Marrara said. “We lose the jobs, we lose the power, and we all pay more for no environmental benefit.”