House Democrats scrutinize natural gas incentives

HARRISBURG — State incentives worth $27 million that encourage the adoption of natural gas as a vehicle fuel will help replace the equivalent of 17 million gallons of gasoline burned in trucks and cars annually with a homegrown alternative.

At a public hearing on Monday, House Democrats examined whether those and other state incentives for greater use of natural gas for heat, power, manufacturing and transportation are wise.

The House Democratic Policy Committee got a nuanced answer to its succinct question: Should Pennsylvania incentivize natural gas?

For over two-and-a-half hours, experts testified about how the state currently encourages use of Pennsylvania’s abundant shale gas; what alternative energy incentives might look like; and whether, given the world’s steady march toward dangerous climate change, the state should be spurring natural gas use at all.

State Rep. Greg Vitali, a Delaware County Democrat who organized the panel, suggested there are no clear answers but legislators should be better informed as they consider “almost a continual stream of bills” to incentivize natural gas further.

Representatives from the state’s economic development and environmental agencies made the case for the natural gas incentive programs they already administer.

Denise Brinley, who focuses on energy and advanced manufacturing as a special assistant to the Department of Community and Economic Development secretary, said the state is actively recruiting large natural gas users to relocate to Pennsylvania; working to expand chemicals manufacturing that uses natural gas as a feedstock; and promoting the “winning combination” of natural gas, solar and battery storage to build cleaner energy micro-grids.

The commonwealth will benefit most from natural gas that is used here, she said, but other economic factors are enticing it elsewhere.

“The natural gas markets are driving gas out of Pennsylvania to the areas where energy companies can get higher prices for that gas,” Ms. Brinley said. “So I argue that we need to look very carefully at the incentives that can make a difference in delivering gas to Pennsylvania projects and residents.”

Later experts tempered the state agencies’ enthusiasm by pointing to past fossil fuel incentives that turned out to contradict competing state policy goals to reduce energy use and carbon emissions.

Natural gas provides no real greenhouse gas emissions advantage over gasoline or diesel as a transportation fuel, said Michael Griffin, engineering and public policy professor at Carnegie Mellon University. But natural gas might make meaningful health improvements if it is used as a replacement fuel for dirty diesel garbage trucks and buses in densely populated urban areas.

Robert Altenburg, the director of the energy center at the environmental group PennFuture, said Pennsylvania’s current sales tax rules create incentives for using fossil fuels for energy rather than conserving it, because purchases of energy-saving items like solar panels are taxed while most electricity purchases are not.

As an alternative, the state could adopt strategies that encourage the use of natural gas to develop the kinds of chemicals and materials that enable advances in renewable energy and energy efficiency, Tom Peterson, president the Washington, D.C.-based Center for Climate Strategies, said.

“Be very, very cautious about the natural gas industry — and any incentives that you might provide to it — making the renewable energy and energy efficiency industries less competitive,” he said. “The two can be positively linked.”

The hearing’s third act featured experts laying out the need to shift away from carbon-emitting fuels in order to avoid the worst effects of climate change.

Donald Brown, a scholar in residence at Widener Law School who contributed to the Intergovernmental Panel on Climate Change, said the global consensus from the recent climate accord in Paris is to try to limit warming to 1.5 degrees Celsius above pre-industrial levels. That demands an immediate energy transition everywhere, including the commonwealth.

“Pennsylvania should be carbon neutral as quickly as possible, but no later than 2040,” he said, acknowledging that his position is provocative. “That means we’ve got to substitute non-fossil fuels for all fossil fuels, including natural gas.”

Laura Legere:

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