Governor Tom Wolf’s Fracking Legacy

Photo by Governor Tom Wolf from Harrisburg, PA
Governor Wolf Portrait, CC BY 2.0, Source

In one of his final acts as Pennsylvania’s governor, Tom Wolf signed a huge, multi-billion dollar taxpayer giveaway, in large part to the oil and gas industry.

Stephen Caruso of Spotlight PA reports on November 3, 2020: Tom Wolf signs $2 billion tax package that encourages natural gas production in Pa. – Despite the size of the package, lawmakers introduced and passed the bill in just a few hours with no public hearings.

Ninety cents out of each dollar offered will be used to encourage the use of natural gas, including $1 billion in tax incentives to attract a new “hydrogen hub” to Pennsylvania. The package will provide $50 million a year in tax breaks to a company that agrees to produce hydrogen for 20 years and increase an existing methane tax credit from $30 million to $56.5 million annually.
The package was publicly introduced as an amendment to a bill just after 3 p.m. on Oct. 26. Less than six hours later, both the state House and Senate passed the legislation. There was little public debate and no public hearings. The credits are transferable, meaning that if a company does not have a tax liability, it can sell the credits to another company.

Stephen Caruso | Spotlight PA

Active and plugged unconventional wells in Pennsylvania.

“This is slapdash industrial policy at its worst that will perpetuate Pennsylvania’s addiction to fossil fuels.”

Patrick McDonnell, president of the environmental group PennFuture and a former cabinet secretary under Wolf

Regional Clean Hydrogen Hubs – establishing a new tax credit program with an annual cap of $50 million over a 20-year period allows for an additional $1 billion in tax credits to be awarded.
House Bill No. 1059

“We support reducing tax rates for all businesses and oppose handouts to the politically selected.”

Stephen Bloom, Vice President of the free-market Commonwealth Foundation

‘Sweetheart deal’ of $2B tax credit program rushed through Legislature
A bill rushed through the Pennsylvania General Assembly and quickly approved by the governor grants $140 million in tax credits annually. In total, the program will offer $2 billion in tax credits over its lifetime. And some lawmakers are not happy.
While the EDGE program comes from Pennsylvania taxpayers, a federal hydrogen hub program is making up to $8 billion available for six to 10 hubs across the United States.

Anthony Hennen | The Center Square

“We have a huge opportunity to transform our energy system and create millions of good paying jobs and put our state on a sustainable pathway. This legislation takes us in an opposite direction.”

State Senator Nikil Saval (D., Philadelphia)

Dawn Keefer represents the 92nd District in the PA House of Representatives:

“This is $2.6 billion in tax credits in a bill that we just got. We have yet to see all the language or get through all of the language. And again, this is government picking winners and losers, and small businesses usually seem to be on that losing side. We’ve done tax credits for decades and we’ve gotten nominal results. We’ve lost population, we’ve lost businesses … but you know what? Let’s do another round of tax credits. This is what drives people out of our commonwealth, this is what closes our businesses.”

Rep. Dawn Keefer, R-Dillsburg, on the House floor as the bill came up for consideration (Source)


The Ohio River Valley Hydrogen Hub: A Boondoggle in the Making
The hydrogen hub’s most noticeable effect is that it would perpetuate coal and gas industries in the region and perhaps expand the latter. But that only amounts to locking in an economy that is already causing the region to shed jobs and population. Except for a temporary bump in construction jobs to construct the pipeline network, the hub would do nothing to create new jobs. In contrast, clean energy transition with an emphasis on distributed generation and improvements to homes and buildings to achieve increased efficiency would likely stimulate job growth in the tens of thousands while also reducing utility bills, increasing disposable incomes, and improving the quality of life in both public and private spaces by making them safer and more comfortable. 

Pennsylvania Lawmakers Add $30M in Tax Incentives for Natural Gas Use, Offer Carrot for Hydrogen Hub
Companies that have invested a minimum of $400 million into an in-state fertilizer, natural gas liquids or petrochemical project could be eligible to receive the credit at a rate of 47 cents/Mcf of purchased dry gas by filing an application to the state’s Department of Revenue by March 1, once the tax credits come into play. PA EDGE tax incentives [will] come into play beginning January 2024, and could last through 2049.

‘H2Hubs’ will fuel American hydrogen production in $8 billion program
The tricky part is that not all hydrogen is created the same way and can come with different benefits and pitfalls. At the moment, most hydrogen is made using gas. To make hydrogen from gas, methane reacts with high-temperature steam under high pressure. That process releases carbon dioxide, and then there’s the threat to the climate that comes from methane leaks across the entire gas industry. Methane is an even more potent greenhouse gas than carbon dioxide.

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