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House Republicans’ “Marcellus Works” Bills on the Move

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The “Marcellus Works” package of bills is designed to spur job growth through the increased use of Pennsylvania’s home-grown natural gas, and the House Finance Committee has just advanced a series of tax credits for natural gas vehicle fleets, heavy-duty trucks and fueling stations. 

“With the high unemployment, we know that the Marcellus Shale industry – and now with the discovery of oil in this state – is a big plus for this Commonwealth,” state Rep. Stan Saylor (R-York) told the committee.  “It is time for us to start using our own resources to benefit Pennsylvania citizens.” 

Saylor is the prime sponsor of HB 301, which would provide tax credits for companies that utilize natural gas in their vehicle fleets. 

Several Democrats on the Finance Committee voted in favor of the bills, but minority Chair Phyllis Mundy (D-Luzerne) argued that corporate tax breaks do not pave the road to economic prosperity.  “We have gone way too far with this notion,” she says.  “This is trickle-down economics at its worst.” 

Up next for the tax credit bills is the state House, while five more “Marcellus Works” bills await possible Wednesday action in the House Environmental Resources and Energy Committee.

Natural Gas “Shoppers” Have New Way to Compare Prices

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Natural gas customers have had their choice of suppliers for about 14 years, but  many don’t make a switch.  Now, the Pennsylvania Public Utility Commission   is offering them a new tool to comparison shop.

When the PUC upgraded its web site recently, it created PAGasSwitch.  While pricing information has been available for some time on the Office of Consumer Advocate’s website, this tool is very much like PAPowerSwitch , in that it allows interactive comparisons. It allows customers to see prices, services and incentives from natural gas suppliers.

Denise McCracken of the PUC says only about 12% of natural gas customers have switched recently and they’re hoping the new tool will encourage more of them to “shop” for a natural gas supplier, just like consumers shop for an electricity supplier.

The website is www.puc.pa.gov.

Resource Extraction Bill Awaits Governor’s Signature

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A mineral resources bill could provide a new revenue stream for the 14-universities in the State System of Higher Education.  SB 367 is now awaiting the governor’s signature after clearing both the House and Senate.  It would authorize mineral leases for more state-owned land, like prisons or state-owned universities. 

“Currently the law only permits the Department of Conservation and Natural Resources (DCNR), and the Game Commission or Fish & Boat Commission to enter into such leases,” explains Senator Don White (R-Indiana), the bill’s prime sponsor. 

The minerals the bill refers to could include everything from limestone to coal; but most importantly Marcellus Shale natural gas. 

Governor Tom Corbett spoke out in favor of the concept on Radio PA’s Ask the Governor program, stressing that horizontal natural gas drilling allows for the wells to be thousands of feet off site – not right in the middle of a the university’s quadrangle. 

“This will be beneficial to the student body, if we get tuition reduction, beneficial to the schools and to the State System of Higher Education,” Corbett explains.

Under White’s bill, money raised from the leasing of mineral rights at a state-owned university would be allocated as follows: 50% stays with the home university, 35% is distributed system-wide, and 15% would be used for tuition assistance across all 14-schools.

Budget Package Signed Just Before Midnight Deadline

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The new fiscal year began on Sunday with the second straight on-time, no tax increase budget.  “Today we reaffirm our commitment to job growth, to education, to the needy and to the taxpayers… our goal is growing new jobs,” Governor Corbett said upon signing the $27.7-billion dollar spending plan late Saturday night.

But critics say the new budget does little to preserve the social safety net.  They lament the elimination of a cash grant welfare program for more than 60,000 needy and disabled residents.  “A lot of men in my district will have no means of support.  And in my district, no means of support means take what you need,” explains Rep. John Myers (D-Philadelphia).  The administration has agreed to continue the program for one more month to ease the transition.

Governor Corbett says he’s pleased that an improving financial picture allowed them to restore funding to several areas, including the Accountability Block Grants that fund full-day kindergarten programs across the state.  Public schools are essentially being level-funded this year, while an extra $40-million dollars has been earmarked for the most fiscally distressed districts.

One of the biggest budget restorations came in the area of higher education, where state-owned and state related universities had been facing cuts of 20% and 30% respective, which would have been on top of last year’s 18% and 20% cuts.  The new level funding comes with a commitment from the university presidents that tuition hikes will be kept at a minimum for the upcoming school year.

Much of this weekend’s activity focused on the other executive and legislative priorities tied to this year’s budget.  Lawmakers signed off on a new system of teacher evaluations for public school teachers, and an expanded Educational Improvement Tax Credit (EITC) program that will give businesses tax breaks when they fund school choice scholarships for low-income students in the state’s worst-performing schools.

Another big victory for the administration was the so-called “ethane cracker tax credit,” which Governor Tom Corbett has described as a new industrial revolution in Pennsylvania.  It passed with broad, bipartisan support.

Charter school reform legislation did not get finalized before lawmakers’ summer break, however Corbett and leading Republicans vow to keep pressing the issue in the fall.  Also, there will be a pilot program to offer county human services funding in block grants vs. seven separate line items.  Up to 20-counties will be able to participate in the pilot; Corbett had originally proposed Human Services Block grants statewide.

Automakers Respond to Natural Gas Boom

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Pennsylvania was among the first states to sign a memorandum of understanding, which indicates their intent to start converting fleet vehicles to natural gas.  Only a matter of months after the agreement was first announced, Chrysler and GM are unveiling plans to produce natural gas-powered pickup trucks.  “We are going to try to convert our fleets – light duty trucks – over to natural gas, to give Detroit some impetus to do this,” Governor Tom Corbett said on Radio PA’s Ask the Governor program.  “I can’t say directly that’s what Chrysler looked at, but I think it certainly had an influence.”   

Corbett believes the natural gas boom is changing everything, and as a result the natural gas infrastructure will develop fairly quickly. 

House Republican Whip Stan Saylor (R-York) is adding legislative muscle to the conversation by introducing a bill that would incent companies to convert their commercial fleets to natural gas.  “By incentivizing these vehicles we will use natural gas, which will spur construction of the statewide refueling network that is needed to create and spread the use of natural gas vehicles here in Pennsylvania,” Saylor said at a capitol news conference. 

The network of refueling stations would then make it practical for consumers to drive natural gas cars.  Saylor believes it would both lower transportation costs and further expand Pennsylvania’s natural gas industry. 

Saylor’s bill would tap the state’s Clean Air Fund for $6-million dollars a year, over the next five years, to provide grants that help cover the costs of converting large trucks to natural gas.  “This is a perfect example of why that fund was created,” Saylor says, noting that natural gas vehicles reduce carbon emissions by 90%. 

Saylor says the natural gas equivalent of a gallon of gas only costs about $2-dollars, compared to gasoline prices which are approaching the $4-dollar mark.

Developing a New Natural Gas Infrastructure

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Private industry is working to develop a new, natural gas infrastructure in Pennsylvania and beyond.  For instance, Clean Energy Fuel Corp’s new plans call for “America’s Natural Gas Highway.”  The nationwide project will develop about 150-natural gas fueling stations over the next three years.  “We are planning… to put stations in Carlisle, Mill Hall and Smithton, Pennsylvania for the national network,” says Clean Energy’s Vice President of Public Policy and Regulatory Affairs Todd Campbell. 

July’s Marcellus Shale Advisory Commission report made several references to natural gas-fueled vehicles, and Governor Tom Corbett wants to develop Pennsylvania’s natural gas infrastructure.  “We need to encourage the development of markets for the use of that natural gas here in Pennsylvania,” Corbett said on a recent edition of “Ask the Governor” on Radio PA. 

“For instance along the Turnpike, we have all of the Sunoco’s along the Turnpike.  Just like there’s a diesel tank there, there should be a natural gas tank there.” 

Clean Energy is already operating natural gas fueling stations in 28-states, including Pennsylvania, but they mostly serve high-volume fleets like the ones found at airports or operated by trash haulers.  “I think the time where you and I are driving around in a natural gas car is probably five to ten years.  That’s probably a little optimistic,” Campbell says.  Regardless, he believes there is an industry out there waiting to be born.

Marcellus Shale

There’s More Natural Gas Down There Than First Thought

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A new assessment from the US Geological Survey finds that the Marcellus Shale contains about 84-trillion cubic feet of undiscovered, but recoverable, natural gas.  That’s a 4,100% increase over 2002 figures.  “We’re learning much more about the Marcellus, geologically and scientifically,” says Marcellus Shale Coalition policy and communications director Steve Forde.  “We’re learning it is much more valuable and more prolific than anybody had imagined a decade ago.”

These numbers come on the heels of new state Department of Environmental information that indicates Marcellus Shale natural gas production has increased by 60% in just the past 6-months.  Marcellus Shale Coalition president Kathryn Klaber says the gains aren’t just due to an increased number of wells, but more efficient drilling techniques as well. 

Lt. Gov. Jim Cawley

Lt. Gov. Jim Cawley

The coalition believes these reports affirm the sustainability of the natural gas industry in Pennsylvania.  Speaking in Wilkes-Barre, Wednesday, Lt. Governor Jim Cawley said the natural gas industry and related businesses generated more than 72,000 new hires in PA over the past 18-months.  Cawley chaired the Marcellus Shale Advisory Commission, which issued 96-recommendations (including an impact fee) this summer.  That report is expected to receive considerable legislative attention this fall. 

Meanwhile, Governor Tom Corbett (R), former Governor Ed Rendell (D) and former Governor Tom Ridge (R) are all expected to speak at Shale Gas Insight 2011, an industry conference, next month in Philadelphia.