Pa. legislative package would boost funding for natural-gas vehicle conversions


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Republican Gov. Tom Corbett's Act 13 legislation defined the state's approach to shale gas development when it was passed in 2012. The hundreds of pages of law introduced an impact fee levied against drillers, outlined what communities could regulate and promoted the use of natural gas in everyday vehicles.

Now a new wave of shale legislation is moving through Harrisburg. Think of it as Act 13's B-side.

The Marcellus Works legislation package, introduced by House Republicans in recent weeks, looks to kickstart demand for Pennsylvania's natural gas through tax-credit programs and loans awarded to companies and agencies that convert vehicles to run on compressed natural gas.

The package of bills, named for the state's Marcellus Shale gas formation, has been branded since 2011 and even has its own website. The bills are in various states of development in Harrisburg -- one tax credit program for CNG fleet vehicles passed last week, while another encouraging transit agencies to buy more CNG buses will be under consideration this week.

It's a plan proponents say would make any Earth Day celebrant a happy camper: CNG vehicles have less air emissions than gasoline- or diesel-fueled cars. And natural gas is cheaper, too, costing about $1.90 per gasoline gallon equivalent.

But like anything involving the words "Marcellus Shale," the legislation has attracted controversy. Significant provisions of the bills that granted industry representation on some state committees haven't made it to the House floor, and critics say the millions of dollars in incentives could be better spent on programs that need the money more than the gas industry.

All of the Marcellus Works bills have Republican sponsors from across the state but are part of a larger national trend toward government incentives for natural gas use. The application of hydraulic fracturing (or fracking) in shale states across the country has created a bounty of new natural gas that needs to be used somewhere.

In turn, state governments have rushed to pass legislation related to the development -- industry representatives say more than 250 pieces of natural gas-related legislation have been introduced so far this year.

Many of the nine bills in the "Marcellus Works" target large agencies like the Port Authority that could convert entire fleets, or try to create tax credits that would help pay for the construction of fueling stations along Pennsylvania's major travel corridors.

"The goal is to make better use of domestic fuel and reap the benefits of cleaner urban air," said Rep. Jim Marshall, R-Big Beaver.

Mr. Marshall is the sponsor of a bill that would encourage the state's three largest transit agencies to phase out diesel vehicles and replace them with those that run on CNG or other alternative fuel sources. The bill had initially created a mandate for all large transit agencies to have a 100 percent CNG fleet by 2027, but that mandate was dropped through the amendment process.

"Initially there were some authorities who had concerns about cost," he said. The bill is up for floor consideration this week.

Focusing on fleets at the state level makes sense, said Diana Stares, director of the Center for Energy Policy and Management at Washington & Jefferson College.

Any state incentive for personal CNG vehicles can run into problems at the border, since drivers may be reluctant to buy such a car if they know they'll have a hard time fueling up once they leave Pennsylvania on that cross-country road trip.

"The federal government has been as supportive as it can with regards to the development of natural gas," said Ms. Stares. "But I think they feel there's a variety of choices, and they're not comfortable getting behind one to the exclusion of others."

The legislation has some high-profile proponents in the natural gas industry, which is banking on increased consumer demand for natural gas to help raise natural gas prices to a level that can justify costly shale drilling.

The Marcellus Shale Coalition industry group called the "common sense efforts" of the Marcellus Works legislation catalysts for "job creation, cleaner air, more affordable energy and American security and competitiveness."

Though sponsors of the bill say the legislation doesn't duplicate Act 13's laws, the Marcellus Works package has faced significant headwinds from opponents who say it's still too much given to an industry already granted so much.

"New tax credits being considered in the House will cost $73.5 million next year, almost as much as the governor has proposed in new basic education funding," said Sharon Ward, director of the left-leaning Pennsylvania Budget and Policy Center, in a statement released last week.

"Most Pennsylvanians would likely prefer to invest that money back into our children's schools and our local communities, rather than subsidizing energy giants."

Criticism from House Democrats has already forced significant revisions to some of the Marcellus Works bills.

One provision found in some of the legislation created seats for industry representatives on a board that would counsel the governor on future tax incentive distribution. Those seats have been struck from the bills.

All told, there have been more than 250 pieces of natural gas-related legislation introduced in state governments across the country so far this year, said Richard R. Kolodziej, president of the NGVAmerica industry group. Other states looking at CNG incentive programs include West Virginia, Oklahoma and Louisiana, he said.

Though the Marcellus Works legislation has exclusively Republican sponsors, similar laws elsewhere have originated on the other side of the aisle.

In California, for example, it's the Democrats calling for more natural gas use -- because they're concerned about the state's air emissions.

businessnews - marcellusshale

Erich Schwartzel: eschwartzel@post-gazette.com or 412-263-1455.


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