Pennsylvania Oil and Gas Industries Respond to State Joining RGGI

On July 13, the Pennsylvania Environmental Quality Board voted 15-4 to adopt final rulemaking surrounding the state’s participation in the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade program.

The initiative establishes limits on CO2 emissions from fossil fuel-fired electric generating units (EGU) in Pennsylvania. Tuesday’s vote comes nearly two years after Governor Tom Wolf’s October 2019 executive order instructing the state to formally join the RGGI. 

In addition to placing the regulatory limits, RGGI permits the trading of CO2 allowances to help facilitate cost-efficient compliance with those limits in other participating states, each of which establishes its own annual CO2 emissions budget for fossil fuel EGUs. Final form rulemaking from the PA Environmental Quality Board includes a declining annual CO2 emissions budget of 78 million tons for 2022. The emissions limit would then decrease to 58 million tons by 2030, representing a 31% decrease from 2019 levels.

Following the vote, Pennsylvania Independent Oil & Gas Association President and Executive Director Daniel J. Weaver issued a statement condemning the program and the governor’s executive order:

“Gov. Tom Wolf continues his use of strongarm tactics to impose an expensive, unwise and job-killing policy on the Commonwealth by placing a tax on carbon production and joining the Regional Greenhouse Gas Initiative … multiple independent state advisory boards, legislative committees and regulatory commissions have expressed their opposition to this blatant example of executive overreach, which would make Pennsylvania the only state in the RGGI program that did not seek legislative approval to join the group … at its most basic level, this proposal ignores state laws that require legislative approval of any new tax and do not authorize, under the state's Air Pollution Control Act, the regulation of carbon dioxide.”

Weaver continued to describe the shortcomings of the Wolf administration’s policy and its effects on the future of electricity generation for Pennsylvania moving forward:

“Economically, RGGI will result in the loss of thousands of jobs at fossil fuel electric generating facilities around the state by taxing those facilities and favoring more-expensive renewable sources. Environmentally, RGGI will have little impact on our air quality, as the electricity Pennsylvania demands would be generated in states to the west that will never join RGGI and whose emissions will drift to the east into our state. Pragmatically, Pennsylvania has already reduced CO2 emissions from fossil fuel generation by almost 40 percent in the last dozen years without the economic burdens of RGGI.”

For states that have joined the RGGI, the program has reportedly generated hundreds of millions of dollars a year in funds to allocate toward investment in clean energy and emission reduction technologies. The Pennsylvania Department of Environmental Protection estimates that RGGI would bring the Commonwealth nearly $2 billion in federal funding and net 30,000 jobs between 2022 and 2030. As of the time of Tuesday’s vote, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont and Virginia have all formally joined the RGGI, with Pennsylvania neighbors Ohio and West Virginia unlikely to join in the near future.