Tuesday, June 25, 2019

Op-Ed: Legislature Should Take A Hard Look At Cap-And Invest Program To Use All Of Our Energy Options

By Jim Seif, Former Secretary Of DEP

Pennsylvania is taking its place, once again, as a rising national and international energy leader, but major policy and economic hurdles still face us.
There are no “silver bullet” solutions, but the General Assembly can steer us through these rapids, and they are currently grappling with three issues -- carbon limits, electricity generation and the looming budget deadline -- that mark a pathway to continued leadership.
As the legislature considers various policy options, as part of the current budget discussions and beyond, I hope they’ll take a hard look at setting Pennsylvania up to participate in a cap-and-invest program.
Recent impassioned debates involved our troubled nuclear power industry, natural gas extraction and the future of coal, state revenue, and the alternative energy portfolio standards (AEPS.) All this discussion has been valuable, but can we find a single strand among them all that can move us forward?
On the question of carbon limits, let’s concede the fact that uneven government intervention in our marketplace does exist, and includes both burdens and boosts. Nuclear generation stands at the highest levels of state and federal regulation.
Such intervention, although necessary to protect public health and safety, dramatically raises the cost of nuclear electricity. At the same time, nuclear generation is both clean and renewable, and can provide nearly limitless baseload energy.
Our natural gas industry produces low cost electricity and is now both economically dominant and more accessible than most other means of generation, but it does have some carbon impact.
Coal, the fuel that launched our Commonwealth into Industrial Age dominance still employs thousands of Pennsylvanians and remains abundant in our state. Yet, the industry labors under levels of intervention higher than natural gas, and the generation of electricity from coal creates a much greater carbon footprint.
Renewables like wind, solar and biomass provide clean energy, with startup costs dropping by the day. Yet, with obstacles ranging from zoning restrictions to “not in my backyard” local opposition, siting for these new technologies is a challenge, and may still call for the huge government boosts that got them started in the first place
So, this is not a level playing field.
The result is an energy scene where conservation, economic development, consumer interests, and regulatory oversight dance an uneasy tango, sometimes even in different ballrooms.
Or make that, different legislative committees.
If we are to continue our rise to international energy leadership with a full slate of production, let’s consider the value of “all of the above.”
Coined by T. Boone Pickens after the 9-11 attacks and domestic energy challenges, the philosophy is simple: all forms of energy – including new technologies and conservation – should be encouraged.
The worldwide demand for energy is not leveling off and will not do so in the foreseeable future. That means there is no “bad” form of energy, and no energy policy should say that.
To that end, I believe that a cap and invest program – the kind that Pennsylvania membership in the Regional Greenhouse Gas Initiative (RGGI) would encourage – is a good idea.
As a market stabilizer, cap and invest simply puts a grading scale on the costs associated with higher levels of carbon. It can, and should, be tailored to Pennsylvania from the start: the coal industry needs time to adapt and plan, with initial waivers and investments in advanced clean tech.
Natural gas needs clarity on offsets, and the elimination of a proposed extraction tax.
Nuclear needs help to survive massive regulatory costs and the legacy of operational changes, like the decommissioning of Three Mile Island.
Renewables need help to get established in places of great need, like our cash-strapped dairy farms and legacy industrial towns. By coupling an opportunity cost with the promise of a streamlined tax scheme, we can encourage both energy responsibility and economic growth.
And, we can translate our energy leadership to policy leadership with bipartisan efforts.
Unlike the Green New Deal, which would impose a cost upwards of $93 trillion, or 450 percent our economy, cap and invest is a market-based solution.
As a Republican, conservative and former member of the Thornburgh and Ridge Administrations, I support solutions that harness market forces.
Cap and invest is such a solution.

Jim Seif served as Pennsylvania’s Environmental Protection Secretary from 1994-2001.
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