Corbett Is missing the boat, and we'll pay the price

Four former Environmental Protection Agency (EPA) Administrators recently wrote an Op-Ed for the New York Times. If Governor Tom Corbett missed it, he needs to read it.

The subject was climate change. The four writers, William Ruckelshaus, Lee Thomas, William Reilly and Christine Todd Whitman, all headed the EPA under Republican presidents - Richard Nixon, Ronald Reagan, George Bush, and George W. Bush, none of whom are light weights when it comes to conservative credentials. The Op-Ed makes several important points.

First, science does not support the claims of climate change deniers.

"There is no longer any credible scientific debate about the basic facts: Our world continues to warm, with the last decade the hottest in modern records, and the deep ocean is warming faster than the earth’s atmosphere. Sea levels are rising. Arctic Sea ice is melting years faster than projected."

Second, inaction on climate change has real costs, and we do not have time to wait.

"The costs of inaction are undeniable. The lines of scientific evidence grow only stronger and more numerous. And the window of time remaining to act is growing smaller: Delay could mean that warming becomes 'locked in.'"

Third, protection of the environment and public health has always been a conservative value.

"As administrators of the E.P.A ... we held fast to common-sense conservative principles — protecting the health of the American people, working with the best technology available and trusting in the innovation of American business and in the market to find the best solutions for the least cost.

That approach helped us tackle major environmental challenges to our nation and the world: The pollution of our rivers, dramatized when the Cuyahoga River in Cleveland caught fire in 1969; the hole in the ozone layer; and the devastation wrought by acid rain."

Fourth, conservatives should support President Obama's climate action plan to cut carbon emissions and invest in renewable resources.

"[P]resident Obama’s June climate action plan lays out achievable actions that would deliver real progress. He will use his executive powers to require reductions in the amount of carbon dioxide emitted by the nation’s power plants and spur increased investment in clean energy technology, which is inarguably the path we must follow to ensure a strong economy along with a livable climate."

Finally, action on climate change will promote and not harm the economy.

"We can have both a strong economy and a livable climate. All parties know that we need both. The rest of the discussion is either detail, which we can resolve, or purposeful delay, which we should not tolerate.       

[W]e must continue efforts to reduce the climate-altering pollutants that threaten our planet. The only uncertainty about our warming world is how bad the changes will get, and how soon. What is most clear is that there is no time to waste."

Regrettably, the administration in Harrisburg doesn't get it when it comes to climate change. Governor Corbett dodges questions about whether he believes in global warming, and seemingly lacks serious concern about the consequences of not taking action on climate change. Instead of working to cut carbon emissions and invest in clean energy technology, the Governor rejects any new investments in renewable power, all the while offering billions of dollars in subsidies to coal and gas interests.

In the words of four Republican EPA Administrators:

"[W]e must continue efforts to reduce the climate-altering pollutants that threaten our planet. The only uncertainty about our warming world is how bad the changes will get, and how soon. What is most clear is that there is no time to waste."

Should Governor Corbett continue to hide his head in the sand on climate change, Pennsylvanians will undoubtedly pay the price.

Wet Gas, Pipelines, Fractionation and a Changing Landscape

The Dayton Daily News recently reported that Houston-based Enterprise Products Partners would begin expansion of the ATEX Express Pipeline in Ohio, Pennsylvania, West Virginia and Indiana.  These types of projects will continue to come online in an effort to push natural gas liquids (NGL) from Southwest Pennsylvania, Ohio and West Virginia to the Gulf Coast and elsewhere, and it will be sure to change our landscape.

Most Pennsylvanians know NGL as "wet gas" - the liquids produced in association with methane. NGL production is growing by leaps and bounds in certain parts of the Marcellus and Utica shale plays. As industry analysts RBN Energy explain, NGL itself does not have much value until it undergoes fractionation - the process of separating NGL into its component parts - ethane, propane, butane, iso-butane, and methane (or pure natural gas).

Once LNG is broken down, the ethane component can be used as feedstock at an olefin or cracker facility to produce ethylene, a basic building block for making plastics. This is what Shell is considering for Beaver County. The other components can be shipped to various domestic and overseas markets, such as the growing Latin American market for propane.

If the NGL cannot be fractionated, production at the well head must stop - and that is not good for companies that invested millions of dollars to purchase gas reserves. For that reason there is a rush to rapidly ramp up fractionation capacity and construct pipelines to transport LNG and various components to market.

The Enterprise pipeline is being constructed to transport NGL to Texas. Sunoco/MarkWest are constructing the Mariner West pipeline to take NGL north to a fractionation complex in Sarnia, Ontario, which will eventually deliver products throughout Canada. The Mariner East Project will take NGL from Southwest Pennsylvania to Sunoco's processing facilities on the Delaware River, and from there products will ship overseas and to other markets.

In addition to pipelines, the major Midstream companies operating in Southwest PA (MarkWest, Dominion, Williams and Chesapeake) are constructing up to eleven fractionation facilities between Moundsville, WV and Houston, PA - less than 50 miles apart.  At the same time, numerous expansion projects along the Gulf Coast are underway to increase fractionation and cracker capacity there.

These pipelines and fractionation facilities will enable NGL production from Marcellus and Utica shale to boom. According to Callie Mitchell, an RBN Energy analyst, NGL production in Southwest PA is poised to grow astronomically in the next five years - as shown on this graph - from 43 Mb/d (a meager 1.2% of US annual production) to an astounding 450 Mb/d by 2017.

Governor Corbett and others envision the processing of wet gas as a "second industrial revolution" that will "transform" all of Pennsylvania into a second Gulf Coast that doesn't just produce gas, but also processes it. In contrast, I recently heard an industry insider dismiss that vision as a "pipedream," explaining that it was much more convenient to enlarge existing facilities on the Gulf Coast, with their easy access to shipping ports and downstream markets, than to reconstruct Mont Belvieu, Texas along the Ohio River. Most likely it will be a blend - perhaps more a rowdy party than a revolution. We will see.

The Governor now does not expect to know whether Shell will build a cracker plant in Beaver County until sometime next year.

One thing is certain - wet gas will continue to change our landscape. This blog will continue to explore what those changes will mean for our communities and environment.

Corbett's tax breaks are all about natural gas, to the exclusion of renewable energy

Tim Puko reports in this morning's Tribune-Review that there is "quite a bit" of capital looking for investment opportunities in renewable energy in Pennsylvania and elsewhere. 

EverPower, a wind developer, employs 60 workers in Pittsburgh that have an uncertain future, in part, because of shifting government policies. EverPower would like to expand its business in Pennsylvania, as would Joe Morinville, owner of the Pittsburgh-based solar company Energy Independent Solutions. But if development picks up outside the United States, that is where the growth will occur.

Unless you are associated with the gas industry, don't look to the Corbett Administration for leadership on this issue. Patrick Henderson, Tom Corbett's energy executive, told Puko that "he [the Governor] won't be passing new tax credits or incentives in favor of renewable power ..."

Why will Corbett not adopt tax policies that promote investment  and job growth in Pennsylvania's renewable energy sector? According to Henderson, “I think it's time for all of them to stand (and compete) on their own.”

Ah yes, the ole' "we don't play favorites" argument. That must explain why the Corbett administration offered Royal Dutch Shell $1.65 billion in tax breaks to locate an ethane cracker plant in Monaca, Pennsylvania. Does the word "hypocrisy" come to mind?  Because, you know, we don't play favorites.

The fact is that Corbett has gone "all in" with natural gas, betting that focusing every state policy on developing that single industry - from superseding traditional local control over planning to balancing the state's budget on the back of childhood education instead of a reasonable shale gas tax - will raise the tide for all.

The Pennsylvania Department of Labor and Industry reports that the Commonwealth's unemployment rate of 8.1% continues to exceed the national average of 7.7% percent, and has increased from over a year ago when it was 7.6 percent.  Over that same period, the Bureau of Labor Statistics reports that unemployment in 37 other states and Puerto Rico has decreased - but not in Pennsylvania. 

Corbett's single industry plan does not appear to be working for Pennsylvania.