Pennsylvania has led the way on natural gas exploration, producing and exporting more energy than ever before, creating good jobs, injecting billions of dollars into the economy and helping to drive down emissions.
We can continue to spur industrial growth and economic development, advance emissions reductions and improve our environment with a regulatory framework that supports these ideals. Meaningful action on regulatory reform must happen now so that Pennsylvania’s economy can grow while we prepare to meet the energy demands of the future — including carbon capture, hydrogen development and the infrastructure to support it.
At a recent state Senate hearing conducted by the Majority Policy Committee and Chairman Dan Laughlin, of Millcreek, R-49th Dist., to examine “regulatory reform and cutting the red tape in Pennsylvania,” I provided testimony on the many challenges to bolstering energy development and building out new infrastructure and outlined measures that could help mitigate these obstacles.
For decades, our regulatory and permitting processes have hindered investment in critical infrastructure, delaying numerous projects and canceling some projects entirely.
At the federal level, a 2017 analysis showed that at any one time over $150 billion in energy investment can be waiting in the National Environmental Policy Act (NEPA) pipeline. The analysis also found that a two-year NEPA review time limit could spur up to $67 billion in energy investment.
The White House Council on Environmental Quality’s own reports indicated that energy projects wait an average of 4.5 years for federal review of their environmental impact statement alone. And a recent study found that at least 10 major energy infrastructure projects, representing more than $34 billion in private spending, were delayed or canceled due to endless and uncertain permitting processes.
In Pennsylvania and the Appalachia region, these pipeline projects could deliver 4.6 billion cubic feet per day of natural gas for homes and businesses, support thousands of family-sustaining jobs and contribute $19 billion in private spending to local and regional economies.
However, their benefits have not been realized. And while the Fiscal Responsibility Act passed by Congress earlier this year included certain NEPA process reform provisions and was a step in the right direction, much more is needed to fix our outdated regulatory regime.
In Pennsylvania, our own regulatory and permitting programs cause further delays for our industry. Discrepancies in approvals, cumbersome reporting requirements, and a maze of permits, technical guidance documents, rules and regulations affect our ability to secure permits and move projects forward in a timely manner. As of 2022, Pennsylvania was the 12th most-regulated state in the nation, having more than 166,000 regulatory restrictions, according to the Mercatus Center at George Mason University.
The natural gas and oil industry, like many others, depends upon a permitting process that is transparent, consistent, predictable, and efficient as we plan and execute capital investments in the commonwealth. And with vast areas of recoverable natural gas resources that have yet to be explored, Pennsylvania is well positioned to boost energy production and bolster its economy if permitting delays can be improved.
According to the U.S. Energy Information Administration (EIA), estimated proven reserves in the Marcellus shale basin are 144.7 trillion cubic feet (Tcf), and roughly 31.8 Tcf in the Utica shale. The EIA estimates that there are an additional 671 Tcf of technically recoverable natural gas resources in these two basins that have yet to be discovered. This extraordinary amount of natural gas is equal to more than 170 years’ worth of the natural gas consumed for home and water heating in the entire U.S.
And as Pennsylvania leads the charge on the next generation of energy technology with carbon capture and hydrogen hubs, modernizing our permitting processes and regulations must be a priority. A recent study found that if policies are implemented to support all types of hydrogen development, it could reduce greenhouse gas emissions by up to 37% through 2050 and inject billions of dollars into the economy through jobs. To unlock these benefits, we need to start building the necessary infrastructure.
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Proactively examining permitting process challenges and potential solutions, as Sen. Laughlin and the Senate Majority Policy Committee explored at their recent public hearing, are positive steps. With the right regulatory framework and efficient, predictable permitting processes in place, Pennsylvania can continue to grow its economy, advance shared climate goals and provide the energy needed to power our everyday lives today and decades from now.
Stephanie Catarino Wissman is the executive director of the American Petroleum Institute Pennsylvania.