A bill introduced this month in the U.S. House of Representatives could wallop Pennsylvania’s burgeoning shale gas industry and related chemical sectors.
Shale gas is the raw material driving major, statewide energy-industrial investments such as Shell’s $6 billion ethane cracker plant in Beaver County and new gas-powered electric generation plants.
The Climate Leadership and Environmental Action for our Nation’s Future Act, or CLEAN Future Act, H.R. 1512, would set new regulatory demands before permits could be approved for facilities that produce plastics or the raw materials used to produce plastics, such as ethylene or propylene. The legislation calls for new Environmental Protection Agency (EPA) rules on emissions, monitoring and waste operations, and it directs the National Academy of Sciences to conduct a study on the current and planned expansion of the plastics industry to examine environmental justice and health impacts.
The bill from House Democrats, sponsored by House Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-NJ), is one that many national energy-environmental groups, e.g., Natural Resources Defense Council and the BlueGreen Alliance, have already said they support.
However, business and industry groups are watching H.R. 1512 closely and with concern. Pennsylvania is home to many plastics manufacturers and related processing activities that employ tens of thousands of people.
Tony Radoszewski, president and CEO of the national Plastics Industry Association, said, “The CLEAN Future Act—as currently introduced—aims to end the manufacture of one of our country’s most valuable and sustainable materials: plastics. Multiple lifecycle analyses show that plastics are the most sustainable material in comparison to all existing alternatives, including glass, aluminum and paper.”
Tools and technologies exist now to address plastic waste and repurpose it through advanced recycling, progress that’s hindered by H.R. 1512, Radoszewski said, adding that “the CLEAN Future Act moves us further from a solution that would truly address plastic waste.”
Kevin Sunday, director of Government Affairs for the Pennsylvania Chamber of Business and Industry, was one official who testified on March 18 at a hearing on H.R. 1512 held by the Energy and Commerce Subcommittee on Environment and Climate Change.
“Permitting under the National Environmental Policy Act must be made transparent, fair and nimble so that vital energy and transportation infrastructure necessary for a modern economy can be built in a timely manner,” Sunday said. He comments that higher energy prices due to taxes, regulatory requirements or a lack of infrastructure do not result in better environmental outcomes, “but they do result in worse economic performance.”
Sunday focuses much of his attention on New Source Review (NSR), a formal process in state and federal air quality permitting. NSR can be required by a new facility or expansion or operational changes at an existing facility. NSR is difficult enough already, Sunday comments, and H.R. 1512, if enacted, would expand NSR’s programmatic reach. In three years, for example, the bill requires EPA to finalize regulations to control greenhouse gases and other pollutants.
NSR issues, Sunday emphasizes, need to be more streamlined and efficient. “Because of the costs associated with triggering New Source Review (NSR) thresholds, companies have canceled projects that would have reduced emissions, lowered operating costs and provided an overall benefit to public health and the environment,” Sunday said in written testimony. Disputes between state and federal regulators over interpretation and application of regulatory criteria result in sizeable legal and engineering costs and leave projects in limbo for months, or years.”
In his closing comment, Sunday writes that “Many of the CLEAN Future Act’s provisions are sweeping in their scope and may have significant unintended consequences; as such we strongly encourage deliberation and economic evaluation of these proposals.”
David Passmore, a Distinguished Professor Emeritus at Penn State University, has expertise in economic modeling. His work includes close study of Pennsylvania’s energy-industrial sector, particularly regarding employment. He has challenged industry’s calculations for projected benefits, especially for employment, calling those numbers overly optimistic. Still, Passmore said these big new investments portend significant regional impacts.
Regarding H.R. 1512, Passmore commented that “if I were in the energy business I would be really nervous about the investments that have been made.” He said the Act’s directive to fix things first and then move forward is an expectation, a “statement of faith,” that probably won’t have the intended results. Regarding employment, for example, Passmore said the bill “could move us backwards” because the number of so-called green jobs rarely increases as expected. He cited experiences in Spain where new green jobs have increased but older, more traditional jobs have declined at a greater rate and employment numbers are actually down.
Passmore noted these mega-projects, once underway, take on their own inertia. “You can’t just stop and then return to pick up the pieces,” he said.