Year in Review: Pennsylvania energy policy

Pennsylvania has had a significant year for energy development, with hundreds of millions of federal dollars coming into the commonwealth.

Though the status of the Regional Greenhouse Gas Initiative, the first mandatory market-based program to reduce greenhouse gas emissions by the United States, remains mired in a legal fight, hydrogen hubs and natural gas have kept legislators and the public busy.

Hydrogen

In October, the federal government announced $750 million for the MACH2 hub in southeastern Pennsylvania and $925 million for the ARCH2 hub based in West Virginia that extends into Pennsylvania, Ohio and Kentucky.

Democratic Gov. Josh Shapiro and Senate Republicans alike praised the announcement, celebrating the potential for more jobs and growth in the commonwealth.

Environmentalists and fiscal watchdogs, though, are less excited about the hubs. They say the hubs haven’t proven to be economically viable, threaten the environment, and could waste massive amounts of taxpayer dollars.

A proposed liquefied natural gas export terminal, too, has sparked similar issues. A legislative task force has heard from developers and labor leaders of the potential economic opportunity it presents, while residents near the planned location say it could directly harm their health.

The liquefied natural gas fight is reflective of a common dynamic concerning energy policy in Pennsylvania: a health versus wealth tradeoff.

Natural gas

Though energy production has grown in places like Texas and Louisiana, Pennsylvania has lagged behind. The Independent Fiscal Office predicted 2023 will have the fewest wells drilled in the last decade.

That decline is a result of significantly lower prices and pipeline constraints. Many pipes have hit capacity to carry out natural gas.

Critics of the industry say pipeline improvements won’t fix the problem in the long run – instead, they warn of production hitting a plateau in the Marcellus Shale.

Following a drop in prices, the IFO warned in the summer that impact fee revenues could dramatically fall after a record 2022. By December, their prediction came true: revenues fell by $105 million. Along with low prices, fewer new wells meant that aging wells returned less money to local and state governments.

Orphan well plugging

As the state government spends more money, aided by federal largesse, to plug orphan oil and gas wells (those that lack an identifiable owner), a lurking taxpayer cost underpins the environmental process.

The Shapiro administration has touted its efforts to plug 100 wells within 10 months – more than the past six years – but it’s hardly a dent in the 30,000 orphan wells in the Department of Environmental Protection's database.

Those 30,000 are only a fraction of the estimated 200,000-500,000 undocumented orphan wells scattered across the state. Some nonprofit groups have plugged them, too, but warn that a federal project to boost well-plugging efforts may not prioritize the most harmful wells.