American Oil and Gas Reporter - March 2021 - 28

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IssuesUpdate: Pennsylvania Independent Oil & Gas Association
Pennsylvania Net Electricity Generation by Source, Nov. 2020
Petroleum-Fired

Natural Gas-Fired

Coal-Fired

Nuclear

Hydroelectric

Nonhydroelectric Renewables
0

1,000

2,000

3,000

Source: Energy Information Administration, Electric Power Monthly

4,000

5,000

6,000

7,000

8,000

thousand MWh

In part because natural gas constitutes the state's top source for power generation,
PIOGA is resisting Governor Tom Wolf's effort to enroll Pennsylvania into the Regional
Greenhouse Gas Initiative. PIOGA President Dan Weaver indicates that Pennsylvania's
carbon dioxide emissions from power generation have dropped by 33% since 2005, a
cut greater to or equal than those achieved by RGGI member states.

Weaver says one of the few recurring
rhetorical themes is particularly rankling:
He seems to forget that the United States,
unlike most countries, recognizes private
mineral rights.
" The governor keeps referring to Pennsylvania's production as 'the people's
gas,' and saying that its revenue should
go to the people, " Weaver clarifies. " The
gas legally belongs to the individual property owner. If Wolf sincerely wants revenue
from the people's gas, he should do what
Governor Rendell did and open state
lands to leasing and/or nonsurface disturbance drilling. That will unlock the
people's gas. "
Fortunately for PIOGA, the severance
tax has gone down in each of the previous six legislative sessions, Slagel indicates, and dynamics show no move
in its favor. " PIOGA still has very
strong advocates in the Republicancontrolled House and Senate, " he affirms.
" I believe they will do what they must
to stymie that effort. "
Weaver concurs, noting that the GOP
gained seats in both legislative chambers,
and suggesting that the political climate
will discourage Republic lawmakers
from conceding to a Democratic governor.
" There is such a divide it makes you
wonder about the governor's chances
for success, " he considers. " But we
cannot discount the possibility of such
a tax, either. "
Weaver explains that history shows
28 THE AMERICAN OIL & GAS REPORTER

how quickly last year's non-negotiable
can become this year's bargaining chip
and cautions that a severance tax on one
industry may seem mild compared with
Wolf's desire to add 1.5% to Pennsylvania's income tax. With that history in
mind, PIOGA has been working with a
coalition formed through the state's chamber of commerce to meet with lawmakers
virtually and emphasize that Pennsylvania
producers cannot afford a severance tax.
" The fate of a severance tax is yet to
be played out in this session, " Weaver
stresses. " I am not willing to say it definitely won't pass. "
RGGI Clash
Another controversy with PIOGA's
attention is the governor's push for Pennsylvania to become part of the Regional
Greenhouse Gas Initiative, which describes itself as the first mandatory market-based program in the United States
to reduce greenhouse gas emissions. Its
member states are Connecticut, Delaware,
Maine, Maryland, Massachusetts, New
Hampshire, New Jersey, New York,
Rhode Island and Vermont. Wolf signed
an executive order in 2019 to join the
RGGI through the regulatory process,
drawing objections from many lawmakers
that no governor can unilaterally submit
the state's electrical generation to a capand-trade program.
The 2020 Pennsylvania Legislature
passed HB 2025, which prevents Penn-

sylvania from joining RGGI without legislative approval, press accounts note,
but Wolf vetoed it. According to Weaver,
the regulatory comment period for the
state's effort to bring Pennsylvania into
RGGI drew more than 13,000 comments
before it closed on Jan. 14.
Slagel points out that Pennsylvania's
term limits prevent Wolf from seeking
election for a third time, and expresses
hope that RGGI opponents' multipronged resistance can keep RGGI
membership at bay during the governor's
final two years.
" It may be possible to slow or delay
things until the lame duck is out of office, "
he suggests. " Whoever his successor is
may not be so dedicated to adding Pennsylvania to RGGI. "
Weaver mentions that lawmakers are
trying to pass legislation like HB 2025
again this session. " It is unlawful for
Pennsylvania to participate in RGGI without legislative authorization, " he holds.
" Pennsylvania's Air Pollution Control
Act does not authorize regulation of
carbon dioxide. Nor does the Pennsylvania
Uniform Interstate Air Pollution Agreements Act. "
After all, he continues, RGGI's proposed mandatory CO2 emissions allowance fees constitute a tax Pennsylvania lawmakers have not approved.
Even if PIOGA could ignore the move's
flimsy legal underpinnings, Weaver
stresses the association would oppose
it as contrary to the interests of both
the state and the industry.
" Joining RGGI is not going to significantly achieve the stated goal, " Weaver
says. " Pennsylvania's electric generation
would migrate to non-RGGI surrounding
states, which would be a significant economic loss for Pennsylvania. "
How hard will Wolf push the effort?
Slagel admits it is difficult to distinguish
between the ambitions to which Wolf
will devote significant time, political
capital and other limited resources, and
the stances that are more symbolic than
substantive.
" It is tough to see through all the
pandemic-related turbulence and figure
out where the governor's sentiments
truly lie and how diligent he will be in
pursuing certain goals, " he allows. " However, joining RGGI would be harmful
enough to our members and the state
that we have to assume it is one of
Wolf's true priorities and do everything
we can to fight it. "
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American Oil and Gas Reporter - March 2021

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