Pa.’s “Regulatory Logjam” Hurts Jobs

A regulatory logjam is hurting Pennsylvania’s competitiveness and slowing economic progress, according to a recent Associated Press report. The story, on an MSC analysis of state government data, found the time it takes for regulators to issue key natural gas development permits continues to worsen – topping more than 200 days for a permit that should only take, at most, two weeks.

These regulatory delays, as TV news outlets across the Commonwealth report, jeopardize the benefits that affordable and abundant natural gas is delivering, and “could affect Pennsylvania jobs.”

(Click HERE to watch “Logjam” Online)

Underscoring the critical need for job-creating, pro-growth policies and regulatory certainty, MSC’s Dave Spigelmyer told the AP that these bureaucratic delays set the Commonwealth back as states are in fierce competition for investment in energy development and advanced manufacturing projects. “We’re at a tipping point if we are going to be a winner in developing jobs and long-term manufacturing opportunities,” Spigelmyer said.

Recognizing that unnecessary regulatory delays cost jobs and slow the Commonwealth’s ability to attract much-needed investment, the Butler Eagle’s editorial board this week called on the Wolf administration to “get its regulatory responsibilities handled in a timely manner.

“These applications are being prepared by highly trained, experienced engineers. Many have been submitting applications to the DEP for a decade or longer. The delays are more likely political and local than they are regulatory routine.”

Combined with the continued threat of a massive energy tax increase and new, burdensome regulations, the Commonwealth is becoming less competitive, hurting Pennsylvania’s ability to attract new jobs and move the economy forward.

Such delays threaten to squander this otherwise “tremendously exciting time” for our region’s manufacturers who are primed to hire and expand thanks to abundant, affordable natural gas, Pennsylvania Manufacturers Association president David Taylor told a Westmoreland Co. panel Thursday. He noted that this expansion “isn’t going to happen on its own” if state lawmakers continue to pursue policies like higher energy taxes and additional, unnecessary regulatory red tape that threaten this energy opportunity.

Here’s what they’re saying:

REGULATORY LOGJAM

  • Drillers: Permit Limbo Hurts Pa.’s Competitiveness: As Pa.’s governor touts the potential for billions of dollars in new investment by petrochemical manufacturers, his environmental agency is struggling to process applications to drill the natural gas wells that will be needed to supply the fledgling industry. An analysis by the industry-funded Marcellus Shale Coalition shows that approval times for a key permit are going up in two of the three regional offices that review them. … The regulatory logjam is hurting Pa.’s competitiveness with other shale states like West Virginia, Ohio and Louisiana, said David Spigelmyer, president of the Pittsburgh-based trade group. “We continue to have no certainty in this industry,” he said. The gas industry’s complaints about permitting come as Democratic Gov. Tom Wolf makes a push to attract plastics and petrochemical manufactures that use natural gas as a feedstock. … But IHS Markit also warned Pa., faced with competition from other gas-producing states, “must begin taking immediate steps” to support long-term economic development. The report called for “aggressive action to address potential developmental and infrastructure constraints.” … Drillers working in Pa.’s gas-rich southwest feel the bottlenecks most acutely. The regional office in Pittsburgh takes more than 200 days to process an erosion control permit, up from an average of 139 days in 2015. … A 2012 policy instituted by Wolf’s predecessor, Republican Tom Corbett, was intended to streamline environmental permitting, requiring erosion control permits submitted through an expedited review process to be handled within 14 business days. … Spigelmyer said Pa., the nation’s No. 2 natural-gas producing state after Texas, has an opportunity to use its natural resources to lure manufacturing jobs “if we get this right.” “We’re at a tipping point if we are going to be a winner in developing jobs and long-term manufacturing opportunities,” he said. (Associated Press, 3/26/17)
  • DEP Delays Could Hamstring Wolf’s Hope of Renaissance: When completed some six or seven years from now, [Shell’s Beaver Co.] ethane cracker plant will turn natural gas into the hottest commodity in the plastics market — ethylene. … Spinoff businesses are not far from the imagination. There will be far more jobs across the region than the 600 people the cracker plant will employ. … Let’s not lose sight of this point, particularly as the state DEP struggles to keep up with applications for new Marcellus gas well permits. Approval times are lagging for a key permit at two of DEP’s three regional offices charged with reviewing the applications, according to a study by the industry-funded Marcellus Shale Coalition. The regulatory logjam is hurting Pa.’s competitiveness with other shale states like West Virginia, Ohio and Louisiana, said David Spigelmyer, president of the Pittsburgh-based trade group. … DEP spokesman Neil Shader blamed the increasing delays, in part, on enhanced scrutiny of permit applications. He said the agency is working to “enhance permit review consistency across its district offices” and also wants to improve the “quality” of the drillers’ permit submissions, which he said would help staff work more efficiently. We’re not buying it. These applications are being prepared by highly trained, experienced engineers. Many have been submitting applications to the DEP for a decade or longer. The delays are more likely political and local than they are regulatory routine. … As state chief executive, Wolf must ensure that the DEP gets its regulatory responsibilities handled in a timely manner. The next industrial boom is riding on the outcome. (Butler Eagle editorial, 3/31/17)

MANUFACTURING OPPORTUNITY

  • Thanks to Shale, “It’s a Tremendously Exciting Time” for Pa. Manufacturers: Construction of an ethane cracker plant in Beaver Co. could lead to a “renaissance” of manufacturing in Southwestern Pa., especially in the plastics and chemical sectors, officials said Thursday at a shale conference at Westmoreland Co. Community College. “We’re part of a revolution here,” said Mike Storms, director of operations for engineered products at the Elliott Group in Jeannette. … “It’s a tremendously exciting time, but it isn’t going to happen on its own,” said David Taylor, president of the Pa. Manufacturers’ Association. The Elliott Group, which employs 1,200 people in Westmoreland Co., is building six large compressors and three large steam turbines for the Shell cracker plant. Storms said the contract represents 40,000 man-hours, not including 15,000 to 20,000 hours of engineering labor. … Taylor said the result, once the plant begins production in 2020-21, could be a manufacturing boon for the region. “Businesses have an actual economic reason to locate close to the source of the feedstock. It’s a competitive advantage,” he said. The plant will mean 6,000 construction jobs and 600 permanent jobs, as well as the potential for growth, Taylor said. “With the ethane in the Marcellus shale, there is enough of a capacity for four more plants of that scale. Beaver Co. represents only 20 percent of the potential,” he said. Those jobs will include 300 to 400 large equipment operators attached to the International Union of Operating Engineers, including 200 crane operators, said Steven Columbus, administrative manager of the IUOE’s training center in New Alexandria. “It’s going to be tremendous work,” Columbus said. “It looks like a pretty good run for us in the near future.” Other local construction projects that will draw from the IUOE pool include Sunoco Logistics’ Mariner East 2 pipeline (500 operators), the Tenaska Westmoreland Generating Station near Smithton (40 operators) and six more natural gas power plants planned for Western Pa. and eastern Ohio, he said. (Tribune-Review, 3/30/17)

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