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Gas industry representatives, along with Congressman Scott Perry, railed against Pennsylvania’s possible nuclear power bailout as a “market distortion” during a talk about the state’s natural gas energy economy with the Carlisle Area Chamber of Commerce on Wednesday.

Perry and the presenters argued that the state and the federal government erred in placing any portfolio requirements on power companies, including carve-outs for wind and solar, the same carve-out that nuclear power companies seek in Pennsylvania.

“We just continue to invest, and if you say anything against wind and solar, you’re against the environment,” Perry said. “I’m not against the environment, but I don’t understand why I have to keep paying and paying.”

The root of the issue is legislation being discussed in Harrisburg to add nuclear power generators to the state’s Alternative Energy Standards Portfolio Act, which was created in 2004.

The law requires that electricity distributors source their wattage from a certain mix of sources — currently, for instance, at least a half-percent of distribution must be from solar suppliers by 2021.

Proposed legislation would modify this so that nuclear power is included, requiring 50 percent of power portfolios to be sourced from “Tier III” renewable energy, of which 77 to 83 percent would be designated for nuclear power, and the remainder for sources such as solar, low-impact hydroelectric, geothermal, and others.

Cost

But while nuclear power may be infinitely renewable with no carbon emissions, it still isn’t cheap enough to compete with natural gas, a source of power that has boomed in Pennsylvania since drilling and hydrofracking began in the Marcellus Shale formation a little over a decade ago.

“Some of you may be aware there’s a battle going on in Harrisburg right now about nuclear bailouts,” said George Stark, director of external affairs for Cabot Oil & Gas. “I’m your culprit, I’ve lowered your energy bills because we have such an abundant amount of energy that your bills are less. The nuclears don’t like that, they’d like the bills to be held in check.”

Stark highlighted Cabot’s success in natural gas production in Pennsylvania. Cabot operates oil wells in Texas, but started a natural gas arm in Susquehanna County 10 years ago, which has since made Cabot the fifth-largest natural gas producer in the nation.

At the same time, it’s brought the once-impoverished Susquehanna County to full employment at much higher wages than before, Stark said.

Prior to the natural gas boom, and prior to Pennsylvania’s introduction of a competitive market model for ratepayers, energy prices in the state were 10 to 15 percent higher than the national average, according to David Taylor of the Pennsylvania Manufacturer’s association. Now, Taylor said, they’re 5 to 8 percent lower.

This has been a huge driver for manufacturing, Taylor said, given that energy is often a factory’s largest cost input. He framed a potential nuclear carve-out as a deathblow to Pennsylvania’s gas-driven low energy costs.

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“If we lose out on the benefit of what Pennsylvania’s natural gas revolution makes possible ... we’re going to lose out on the best shot that we have to give people an actual business reason to locate and invest and hire here in Pennsylvania rather than someplace else,” Taylor said.

Conversion

Perry also said conversion of electricity production to natural gas is the major factor in the United States’ roughly 1-percent-per-year reduction in carbon-based greenhouse gas emissions since the mid-2000s.

“The Green New Deal of the last 10 to 15 years has been natural gas,” Perry said.

Natural gas emits about 43 percent less carbon per thermal unit than coal, and about 27 percent less than oil, according to federal numbers.

But it still isn’t greenhouse gas-free, something that will likely make the argument more difficult for skeptics of renewable energy bailouts.

While he hasn’t publicly taken a position on the nuclear bill, Gov. Tom Wolf signed an executive order this year to reduce greenhouse gas emissions in Pennsylvania 26 percent by 2025, and 50 percent by 2050. The state Department of Environmental Protection’s draft plan on how to do this includes further requirements for renewable energy in electricity portfolios, including nuclear.

Perry, who has been reluctant in the past to characterize climate change as man-made, said on Wednesday that “climate change is an incredibly important topic.”

The boom

But he also blamed renewable energy providers for not seizing on the hydrofracking boom.

“We know that they’re important and we want a breadth in our portfolio. But your failure in a free market to invest wisely and to see what was coming when it was coming is your fault,” Perry said.

However, oil and gas companies — by their own admission — face the same problem when it comes to climate change. Cabot’s 2018 financial summary filing says the company is exposed to investment risk because its portfolio does not address climate impacts.

“To the extent financial markets view climate change and GHG [greenhouse gas] emissions as a financial risk, this could negatively impact our cost of and access to capital,” Cabot wrote. “In addition, warmer winters as a result of global warming could also decrease demand for natural gas.”

“We just continue to invest, and if you say anything against wind and solar, you’re against the environment. I’m not against the environment, but I don’t understand why I have to keep paying and paying.” <&textAlign: right>— Congressman Scott Perry

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Email Zack at zhoopes@cumberlink.com.

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