A state House committee chaired by Rep. Daryl Metcalfe, R-Cranberry, rejected a much-delayed emissions regulation this month, possibly jeopardizing over half a billion dollars in federal highway funds Pennsylvania could use to maintain its deficient roads and bridges.
The U.S. Environmental Protection Agency informed the state’s Department of Environmental Protection earlier this year that if it does not regulate the oil and gas industry to reduce smog-forming emissions by Dec. 16, the federal government is required by the Clean Air Act to impose sanctions on the state and will withhold funds used to maintain the state’s highways.
Those sanctions could cost the state $500 million to $750 million in federal highway funds next year, according to a spokeswoman for the state Department of Transportation.
The state DEP had crafted oil and gas regulations, but the House Environmental Resources and Energy Committee intervened to block them from going into effect at its meeting in August. The GOP-controlled committee passed a resolution disapproving the rule-making, even after the Independent Regulatory Review Commission had already found it “in the public interest” in July.
By blocking the regulations, some long-awaited transportation improvements and construction jobs could be eliminated, House Democrats and agency officials said. Meanwhile, Mr. Metcalfe and his Republican colleagues say the federal government is making a “hollow threat” and that the state’s proposed regulations would kill jobs in the oil and gas industry.
The regulation that was blocked by House Republican committee members would have only applied to the unconventional side of the oil and gas industry, which uses hydraulic fracking to release oil and natural gas from shale formations far below the shallow wells of the industry’s older half. The conventional drillers sued the DEP to stop the regulations from going into effect for them earlier this year, after the department tried regulating emissions industrywide.
The DEP then whittled down the regulation in June to apply to just the unconventional side, whose emissions reductions would only meet a quarter of the EPA’s guidelines. The DEP said it is designing a separate regulation for the conventional industry, knowing that only a complete regulation would stop the sanctions clock.
Nonetheless, the House energy committee shot the unconventional regulation down by a party-line vote, 15-9.
Now the House can vote to kill it when it convenes in September, leaving the state Senate to hammer the nail in the coffin. Both are controlled by Republicans, and November’s election is unlikely to change the balance of power in either chamber.
A potentially major impact
The Legislature has the power to review regulations. But Mr. Metcalfe’s decision to block them was “a proactive and unusual step,” said Rep. Greg Vitali, D-Delaware, who is the minority chairman for the House Environmental Resources and Energy Committee.
Historically, the Legislature does not usually derail such regulations — especially when federal money is tied to them. But in 2021, the Legislature did intervene in a big way by blocking the state’s entrance into the Regional Greenhouse Gas Initiative. The regional agreement would have required Pennsylvania to limit the carbon dioxide emissions of its electric power sector or pay other states for exceeding the regional cap.
While blocking RGGI didn’t have immediate consequences for Pennsylvania, the recent action by the House energy committee could delay or cancel transportation improvements throughout the state, disrupting commutes and eliminating construction jobs, all to block a regulation that the unconventional oil and gas industry does not oppose.
PennDOT expects Allegheny County to lose $37 million in federal highway funds, Butler to lose $12 million and Fayette to lose $7 million. Washington, Beaver and Westmoreland counties are all also likely to lose money.
In Allegheny County specifically, PennDOT communications director Erin Waters-Trasatt said obstructed projects could include the construction of an interchange between state Route 50, Interstate 79 and Vanadium Road in Bridgeville; a safer interchange where the Parkway West meets Banksville Road just outside the Fort Pitt Tunnel; and improvements on Liberty Avenue and Washington Pike.
Rep. Sara Innamorato, D-Lawrenceville, a member of the House Transportation Committee, said her district will lose $2.5 million for the Route 28/Highland Park Bridge interchange project that’s already underway.
“It’s really impacting our major metropolitan areas and the city and municipality and stretching up into all corners of the county,” she said. “It’s not only impacting the thoroughfares but the jobs for building that infrastructure.
“That’s all going to be put on hold because Chairman Metcalfe is pulling a political stunt.”
But Mr. Metcalfe said he believes blocking the regulation would stop the state from threatening more jobs than necessary.
“[The DEP] wanted to be more restrictive,” he said, adding that he thinks the proposed regulations go beyond what the EPA required. “They wanted to kill more jobs in the state, like they’ve been doing.”
DEP press secretary Jamar Thrasher disagreed. “The regulation does not go beyond what is required,” he said.
The clock is ticking
Most of the opposition to the regulation has come from the conventional oil and gas industry, which says the costs to comply would put a disproportionate burden on it as opposed to the unconventional industry.
In fact, Jim Welty, who lobbies for the Marcellus Shale Coalition that represents the unconventional industry, used his vote on the Environmental Quality Board to approve the regulation in March, when the regulation would still have applied to both sides of the oil and gas business. He abstained from the vote in June when the regulation only applied to the unconventional industry.
Republicans and Democrats also disagree about whether the EPA will even impose sanctions.
“[The EPA] never withheld federal funding for anything,” said Senate Majority Leader Kim Ward, R-Hempfield.
But as of June 16, the federal agency had already sanctioned the oil and gas industry for the state’s noncompliance. Companies that seek permits for building or modifying major emission sources in the state must now purchase twice the number of offset credits from other permitted sources that curtail their emissions. Though the industry has not yet felt these sanctions, it will in years to come as the Department of Environmental Protection processes new projects.
As for highway sanctions, EPA imposed them in St. Clair, Mich., in 2010. Because the EPA found St. Clair’s air to be sufficiently clean a month or so later, the EPA suspended the sanctions. EPA spokesperson Eileen Demear said that “there were little to no adverse impacts.”
Still, other states don’t seem to think the EPA is horsing around.
Since the EPA started its “sanctions clock” on five states in November 2020, California, Connecticut, New York and Texas all submitted their regulatory plans to stop the clock. Pennsylvania is the only one to not comply.