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Senate
Environmental Resources & Energy Committee Reports Reports
provided by PA Legislative Services The
Senate Environmental Resources and Energy Committee held an
informational briefing on the Department of Conservation and Natural
Resources' (DCNR) natural gas leasing plan. Members
in attendance included Chair Mary Jo White (R-Venango) and Senators Ted
Erickson (R-Delaware) and Mike Brubaker (R-Lancaster). DCNR Secretary Michael DiBerardinis said Jim Grace, Deputy Secretary for Parks and Forestry, explained that the oil and gas
program has been a major DCNR program for past 60 years, with 1,437 drilled
wells and $153 million in DCNR revenue. He said the goal of the program is to
manage impacts and balance tradeoffs consistent with ecosystem management
principles and Forest Stewardship Council certification standards. He offered
that the $153 million has provided money for conservation, recreation and
flood control projects, including the purchase 26 state parks, oil and gas
development rights under state parks and forests, and Heritage projects and
botanical surveys. DCNR owns 85% fee simple and controls the surface and
subsurface, Grace stated. He told the committee that there are currently 99
active leases on 270,609 acres with 650 royalty producing gas wells. Grace
explained that the key part of the discussion is the difference between
"deep" and "shallow" gas drilling. The deeper the wells,
the greater the well spacing and less surface disturbance, he said, adding
that deeper wells produce higher volumes of gas. DCNR's 2003 State Forest
Resource Management Plan Proposal was to discontinue new shallow gas leases
and focus on deep gas drilling, he stated. He added that many groups resisted
the proposal because of concerns about rising energy prices. The 2007 State
Forest Resource Management Plan Update had a proposed policy that allows
limited shallow gas drilling on a case-by-case basis and a revised lease,
Grace explained. The revised lease includes: · Specific and restrictive well
spacing across all drilling horizons to reduce surface disturbance · Provisions for increased
confidentiality and dispute resolution for operators · A modified bonus and fee
structure that reflects nationwide industry norms He
stated the revised gas drilling policy focuses on deep and medium development
to minimize surface disturbance. He also said it allows for limited shallow
drilling if reservoirs are encountered, with additional shallow gas leases
considered case-by-case. Chairman
White asked for the total acreage of the state forests. Grace answered 2.1
million acres. Chairman White asked about the prospects of drilling for oil
on state forest land. Grace replied that no oil has been found under the
state forests. Senator
Brubaker asked if any of the environmental community's concerns are included
in the revised plan. Grace said the environmental community asked the
department to be more specific on what areas can and can't be drilled. The
plan also includes requirements related to buffer strips and requirements on
drilling at night. Senator Brubaker noted that the leases are also
strengthened on the business side because they are set at national norms. Chairman
White asked what the national norms are. Grace discussed raising the minimum
bonus bid and the setting of the bid price based on the market. He added that
the plan also includes a confidentiality statement. Chairman
White inquired how the department arrived at the 75,000 acre amount. Grace
stated they felt it was the prudent way to go. He noted that the proposal in
2002 for the Chairman
White asked if the department would consider expanding drilling if this
program is successful. Secretary DiBerardinis replied that the department has
to meet its certification from the Forest Stewardship Council. He added that
the department should not jeopardize the certification. He offered his belief
that the proposal will work while meeting the needs of the forest and energy
needs of the state. If the proposal works we will expand it, he added. Chairman
White asked when leases will be offered. Grace said late summer and bids will
likely be received in the fall. Drilling activity probably won't start until
next spring, he explained. Nate
Collins, PA Legislative Services The
Senate Environmental Resources and Energy Committee met to consider
Senate Bill 949.
A05294 by
Mary Jo White, was described as technical making
numerous corrections to the bill. The amendment was adopted
unanimously. Chairman
Mary Jo White (R-Venango) said more amendments will likely be needed because
with a 238 page bill more technical changes will almost certainly be
necessary. Senator
Richard Kasunic (D-Fayette), the sponsor of the bill, commented that this is
an important piece of legislation for the safety of mine workers. He noted
that many hours have gone into crafting this legislation. The state's mining
laws have not been rewritten for many years so an update is necessary, he
remarked. DEP
Secretary Kathleen McGinty called the bill a historic piece of legislation
and a great step forward for mine safety. She suggested that a rewrite of
mining laws is necessary going forward as there is more of a push to use
indigenous energy sources in an effort to achieve energy independence. This
is a bipartisan effort to protect mine workers, she concluded. Senator
James Rhoades (R-Schuylkill) clarified that the bill does not affect mining
of anthracite coal, which has a different set of rules. He then remarked that
he hopes this bill will create an emphasis on the use of Chairman
White explained that there are still a few open issues related to the
legislation so the United Mine Workers have not signed on in support of it.
In her opinion, some of the issues they are concerned about should be dealt
with in contract negotiations, and she believes that the government has gone
just about as far as it can in drafting this legislation. Nate
Collins, PA Legislative Services Hearing Held on Alternative Energy Investment Act
http://www.pasenategop.com/news/archived/2007/1107/mjwhite-111407.htm The
Senate Special Session Committee on Energy Policies, chaired by Sen. Mary Jo
White (R-Venango), held a public hearing today on legislation that would
invest $530 million over the next seven years in consumer energy programs,
energy conservation, and the development of alternative and renewable energy. Special
Session Senate Bill 1, the Alternative Energy Investment Act, was introduced
by Sen. White and Sen. Tommy. Tomlinson (R-Bucks). The measure provides
funding for grants and loans to projects geared at improving energy supply
and efficiency, increasing conservation and reducing demand for energy – with
no tax increases. The
hearing featured testimony from alternative energy producers, the Secretary
of Community and Economic Development, and others. Additional
Information:
Senate GOP Alternative Energy Plan Rejects Administration’s Call for New Taxes The Senate Special Session Committee on Energy Policies approved legislation to invest $530 million over the next seven years in consumer energy programs, energy conservation, and the development of alternative and renewable energy. The Alternative Energy Investment Act, introduced by Sen. Mary Jo White (R-Venango) and Sen. Robert M. Tomlinson (R-Bucks), provides funding for grants and loans to projects geared at improving energy supply and efficiency, improved conservation and reduced demand for energy – with no tax increases. "Our focus needs to be on
helping energy consumers," said Sen. Tomlinson. "Energy costs are
going up, and the state should support energy conservation and alternative
energy development as a long-term way to reduce the impact those rates have
on "This package is both aggressive and balanced," said Sen. White. "We're providing a fiscally responsible approach to encouraging the development of alternative and renewable energy and energy conservation." The senators noted that much work lies ahead to reach a consensus on legislation creating a fund to promote energy conservation and alternative energy. Special Session on Energy Web Page Senate Committee Advances Alternative Energy Investment Act in Special Sessionhttp://senatormjwhite.com/press-2007/101707.htm The Alternative Energy Investment Act, introduced by Sen. Mary Jo White (R-21) and Sen. Robert M. Tomlinson (R-6), provides funding for grants and loans to projects geared at improving energy supply and efficiency, improved conservation and reduced demand for energy – with no tax increases. It was reported out of committee by a vote of 13-1. "Our focus needs to be on helping energy
consumers," said Sen. Tomlinson. "Energy costs are going up, and
the state should support energy conservation and alternative energy
development as a long-term way to reduce the impact those rates have on "This package is both aggressive and balanced," said Sen. White. "We're providing a fiscally responsible approach to encouraging the development of alternative and renewable energy and energy conservation." The senators noted that much work lies ahead to reach a consensus on legislation creating a fund to promote energy conservation and alternative energy. Special Session Senate Bill 1 would provide: · $20 million annually for consumer/home energy efficiency programs. · $20 million annually in tax credits for investments in alternative energy production projects; and · $20 million annually to finance a $250 million bond for alternative and renewable energy development, clean energy and energy conservation, and pollution control technology. For consumers, $20 million would be available for grants, rebates and reimbursements for: · Purchasing energy-efficient heating and cooling units and appliances; and · Residential energy conservation projects, including purchasing and installing: · Solar or solar photovoltaic panels; · Energy efficient windows and doors; and · Insulation, air-sealing and other energy saving projects. Tax credits totaling $20 million would be available to facilities which: · Produce or distribute renewable energy by using biofuel, biomass, solar power, wind energy, clean coal technologies, waste coal or other alternative energy sources defined under the Alternative Energy Portfolio Standards Act; · Manufacture or produce products that provide renewable energy; and · Are used for the research and development of technology to provide alternative or renewable energy sources. Bond proceeds would be allocated in the amount of $50 million per year over a five-year period for: · Development of alternative and renewable energy technologies and venture capital; · Pollution control technology projects to assist existing electric generating units meet enhanced state and federal pollution emission reduction requirements; and · Clean energy and energy conservation projects. Special Session Senate Bill 1 now moves to the full Senate for consideration. CONTACT: Pat Henderson (Sen. White) Fran Cleaver (Sen. Tomlinson) The
Senate Environmental Resources and Energy Committee met to consider Senate Bill 266. SB 266 Erickson - (PN 303) The Pennsylvania
Global Warming Act requires the Department of Environmental
Protection to prepare a report on potential global warming impact in and
economic opportunities for the Commonwealth. Additionally, the Department
would create an inventory of greenhouse gases emitted in PA and use the data
to project future greenhouse gas emissions. Interested businesses would also
be permitted to voluntarily record any reductions in greenhouse gas emissions
or any avoided emissions of greenhouse gas emissions that are achieved in the
absence of any government regulation. Lastly, the Department would submit a
climate change action plan every three years to the Governor. - The bill was
unanimously reported as amended. A03737
by Mary Jo White, changes references of "global warming" to
"climate change", removes the stakeholder advisory group and
replaces it with a Climate Change Advisory Committee. DEP would utilize a
third-party facilitator to guide the activities of the Committee. Relevant
information regarding activities of the Committee would be posted on the
Internet. It extends timeframe for the DEP report on climate change impact
and economic opportunities from six to nine months, and the timeframe for
submission of climate change action plan is extended from one year to fifteen
months. Requires DEP to monitor the enactment of federal laws on greenhouse
gases inventory, registry or reporting requirements. The amendment was adopted
unanimously. Senator
Andrew Dinniman (D-Chester) commented that a number of counties and local
municipalities have already completed an inventory. He said he would like the
bill to be amended to state that the information the government entities have
collected should be included in the report. Chairman Mary Jo White
(R-Venango) said that the change cannot be made now but it could be
considered in the Appropriations Committee. She also suggested that this
issue is already covered in another section. Senator Dinniman said he just
wants to acknowledge that this has been done before and the models are in
place. Senator
Ted Erickson (R-Delaware), the sponsor of the bill, remarked that this issue
has been discussed in the crafting of the legislation and it was decided that
the state should take all of the information that it can get. He said he
would be open to including reports from local government entities. Senator
Mike Brubaker (R-Lancaster) asked if the Climate Change Advisory Committee
would be professionally staffed. Minority Chairman Ray Musto (D-Luzerne)
replied that DEP would select a third-party facilitator. Senator Brubaker
noted that members of the committee will serve for four years and he asked if
it is expected that the report will take that long to complete. Pat
Henderson, the committee's executive director, explained that the original
report will be completed within 15 months of the passage of the bill. He said
that it will then be updated on a periodic basis. Senator Brubaker inquired
if there is a fixed set of elements and compounds that will be studied and
analyzed. Chairman White said she believes that it can include any source
that may be responsible for climate change. Senator Erickson cited the
definition of "greenhouse gases" in the bill, which provides
parameters. Senator Brubaker remarked that there are some elements that are
possible sources for climate change, and he wondered how additional elements
and compounds will be studied in the future. Nate
Collins, PA Legislative Services The
Senate Environmental Resources and Energy Committee met to consider
six bills. SB 305 Rafferty - (PN 341) Amends the Solid Waste Management Act further
providing for permit and license application requirements and for enforcement
orders; and providing for repeat violations. The bill provides that an
applicant for a new permit or a permit modification that would result in an
increased average or maximum daily waste volume, increased disposal capacity
or expansion of the permit area must certify that the applicant does not have
any outstanding violations of this act. Furthermore the bill provides that
the department may impose an additional penalty of up to $50,000 per
violation upon any person or municipality that demonstrates a pattern of
multiple violations of a single regulation occurring at a single facility. -
The bill was unanimously reported as committed. Chairman
Mary Jo White (R-Venango) clarified the bill does not change where funds
ultimately go. SB 1017 Brubaker - (PN 1269) Amends the Phosphate Detergent Act further
providing for exclusions and exceptions by permitting a cleaning agent that
contains up to 8.7% phosphorus by weight to be used in commercial or
institutions dishwashing machines (changed from commercial or household
machines). - The bill was unanimously reported as committed. Chairman
White asked if the dishwashing industry opposes the bill, and if it creates
barriers to interstate commerce. Senator Michael Brubaker (R- Lancaster)
confirmed the dishwashing industry is supportive of the bill. SB 1068 White, M - (PN 1372) Amends the Hazardous Sites Cleanup Act
further providing for the fund and for civil penalties by adding that revenue
from certain civil penalties would be deposited in the fund. - The bill was
unanimously reported as committed. SB 1069 White, M - (PN 1373) Amends the Keystone Recreation, Park and
Conservation Fund Act further providing for annual reports by stating that by
July 1st of each year, the Department of Conservation and Natural Resources, Department
of Education, the PA Historical and Museum Commission and the State System of
Education would each submit an annual report for projects and services
provided by money from the fund. For grants awarded from the fund, the annual
report must, at a minimum, include certain information as outlined in the
legislation. The report may be submitted by email at the agency's discretion
and must be published on the agency's website. - The bill was unanimously reported
as committed. Senator
Michael Brubaker (R-Lancaster) inquired if the bill creates an annual report
or an audit. Chairman White explained it merely requires an annual report. SB 1086 Regola - (PN 1378) Amends the Flood Control Law further
providing for contracts and acquisition of property by adding that all work
involving an expenditure of more than $25,000, subject to annual adjustment
based on the CPI-U (increased from $4,000) must be performed under written
contract let by the board to the lowest responsible bidder after due
advertisement. The legislation also provides for evasion of advertising
requirements by adding that no board member may evade the advertising
requirements by purchasing or contracting for services and personal
properties piecemeal to obtain prices under the required advertising price. -
The bill was unanimously reported as committed. HB 43 Rubley - (PN 68) Amends Title 27 (Environmental Resources) providing for
uniform environmental covenants and stating that an environmental covenant
must: (1) state that the instrument is an environmental covenant, (2) contain
a legally sufficient description of the real property subject to the
environmental covenant, (3) contain a brief narrative description of the
contamination and the remedy, (4) describe the activity and use limitations
on the real property, (5) identify every holder, (6) be signed, with the
formalities required for a deed, and identify the name and location of any
administrative record for the environmental response project reflected in the
environmental covenant. The bill states DEP would establish and maintain a
registry containing all environmental covenants and any amendment or
termination of those covenants. The registry may also contain any other
information concerning environmental covenants and the real property subject
to them which it considers appropriate. The registry is a public record for
purposes of the Right-to-Know Law. - The bill was unanimously reported as
committed. Rep.
Carole Rubley (R-Chester), prime sponsor of the bill, referring to a memo
received by the committee from the PA Environmental Council, noted she has
not herself read it, but is glad the Council appears supportive of the
measure. Mike
Howells, PA Legislative Services HARRISBURG
- (09/24/07, 1:30 p.m., Hearing Room One, North Office Building) The
Senate Environmental Resources and Energy Committee held a public
hearing on the Hazardous Sites Cleanup Act (HSCA) Fund. Members
in attendance included Chairman Mary Jo White (R-Venango), Minority Chairman
Ray Musto (D-Luzerne) and Senators Mike Brubaker (R-Lancaster), Andrew
Dinniman (D-Chester) and Edwin Erickson (R-Delaware). Chairman
White explained that when the proposal to fund HSCA with the realty transfer
tax fell through in June she sent a letter to DEP. She noted that she never received
a response so she has questions for the Secretary. Chairman
White stated that in a June 20 letter to budget Secretary Michael Masch, DEP
Secretary Kathleen McGinty stated without additional funding there will be a
three stage shutdown for HSCA. She noted that one of the strategies included
furloughing workers, and she asked if the strategy was developed. Secretary
McGinty replied that there is a process that the department would have to go
through to furlough employees, including sending a
letter informing them they may be furloughed. Furlough letters were never
sent, she stated. Chairman White said it seems the fund is out of money but
there have been no furloughs. Secretary McGinty replied that her letter said
HSCA would be out of money by September 30 without any changes. She offered
that they made operational changes to give the legislature time to develop a
funding proposal. Chairman
White asked why the department never began phase one of the shutdown. Secretary McGinty replied that she worked with
the Governor's office to provide funding to give more time to the
legislature. She explained that the plan that they are currently operating
under includes the use of funds that are usually saved for such things as
emergency response. Chairman White inquired if Secretary Masch replied to the
letter. Secretary McGinty stated she did not receive a written reply, but she
has assurance that the Governor's office is serious about funding HSCA.
Chairman White commented that the Budget Secretary should have written her to
explain that furloughs are no longer necessary. Secretary McGinty said that
is not entirely true because the department had to make changes to HSCA's
operations to keep it operational. Chairman
White asked where the $19.3 million came from to fund HSCA. Secretary McGinty
stated that it is money that was remaining from Growing Greener II and
contracts executed under Growing Greener II funds. Chairman White asked why
the department did not transfer these funds before June 20. The Secretary said
the department was waiting on that money to give HSCA time to reach September
30 shutdown date. Chairman
White said she has heard conflicting reports about the amount of money
necessary to fund HSCA, and she asked how much is needed on an annual basis.
Secretary McGinty replied that it is a policy decision. She explained that
there are parts of HSCA that are not discretionary, including $6.3 million to
meet federal obligations, such as the cleanup of Superfund sites. She
suggested that the appropriate level of funding is based on how quickly the
state wants to clean the 150 sites on the list. Chairman
White inquired about funding for personnel in HSCA. Secretary McGinty
answered that the department has moved people from HSCA, and consequently
there are 25% fewer personnel working on it than in 1992. The Chairman asked
for a specific number of employees working within HSCA. Secretary McGinty
stated that in 1992 there were 327 employees and there are currently 285.
Chairman White inquired if this is a sufficient amount to do the HSCA work.
Secretary McGinty answered yes, but added that it also depends on the level
of activity. Chairman
White questioned why some of the HSCA funding is used for brownfields
remediation instead of contamination cleanups. Senator McGinty acknowledged
that a definite distinction can be made with regard to those two programs but
the work involved in HSCA cleanups and brownfields remediation is very
similar. Chairman White asked how many projects have been remediated and how
many have been added to the list in the past few years. The Secretary replied
that some have been moved to Growing Greener II. She explained that 10 to 20
sites are added to the list every year, and 14 sites have been remediated in
the last two years. The
Chairman asked for a breakdown of what Growing Greener II funding has been
used for, to which Secretary McGinty said she would provide that information
to the committee. Chairman White then asked if the Secretary would object to
the Auditor General conducting an audit of HSCA. Secretary McGinty said she
would agree to an audit. Senator
Brubaker asked about the parameters used to determine which sites will be
remediated. Secretary McGinty explained that to receive priority status the
sites must be found to negatively affect public health. Senator Brubaker
asked if the department keeps information about hazardous sites before and
after cleanup. The Secretary answered yes, and added that not all the
information is compiled because sometimes there are lingering affects,
including groundwater contamination. Senator
Brubaker inquired if the department knows the cost of cleanup before it
starts a project. Secretary McGinty said they do a thorough assessment before
beginning a project so they have a good idea but sometimes things can change
the price. Lastly, Senator Brubaker asked if the department completes a
post-cleanup analysis. Senator McGinty replied yes, explaining that many
times information is not quantifiable, but sometimes information such as the
amount of chemicals present is available. Chairman
White asked if the Secretary would support the proposal she and Senator
Dominic Pileggi (R-Delaware) developed to fund HSCA. Secretary McGinty
replied that she is grateful that the Chairman is trying to fund HSCA but she
believes the Governor's office would question how to make up the missing
funds in the General Fund budget if $40 million is taken from the capital
stock and franchise tax. Chairman White commented that this is a priority, to
which Secretary McGinty replied that if the bill is the solution that is
chosen a determination must be made as to where the money comes from in the
budget. Senator
Dinniman remarked that it is crucial to fund HSCA, adding that citizens of Chairman
White asked for clarification about the amount of money in the reserves,
especially with regard to money set aside to meet federal obligations.
Secretary McGinty stated $6.3 million was set aside for three things: the
federal Superfund program, the federal resources conservation and recovery
program, and emergency response. The Chairman questioned if this amount is
part of the projected $40 million needed to fund HSCA. Secretary McGinty
replied that if the program is funded at $40 million going forward, there can
be a directive that the federal obligation continue to be met or the General
Fund can pick up the obligation. Chairman White commented that this would
lead to the "same shuffling act" the state was in before with where
the funding comes from. Chairman
White commented that funding HSCA is a priority so it could be taken off the
top of the budget before everything else is funded. Secretary McGinty said
that has not been the case in the past, but this is the time that new funding
sources for HSCA should be considered. She offered that in the past, the
dedicated funding source for HSCA showed the federal government that the
state would complete its obligations. Chairman
White stated that she is disappointed DEP would not support the plan
developed in June to fund HSCA. She stated that legislators were led to
believe that the fund was out of money on June 20, so the Secretary should
have backed the Governor in these negotiations. Secretary McGinty told the
Chairman that her department was not brought into the negotiation process to
find a funding source for HSCA until late in the process. Chairman
White cited Secretary McGinty's testimony in October 2006 when she said that
HSCA would run out of money. She commented that legislators were led to
believe at that time that HSCA would be out of money by the end of June 2006.
Secretary McGinty replied that her testimony may have been correct at that
time, but DEP has worked very hard to operate the fund conservatively. The
fund still needs a dedicated source of funding, she opined. Chairman White
remarked that she takes issue with the representations the Secretary made,
and she believes that the administration wanted a new tax. She continued,
stating that once the tax was taken off the table she heard nothing from DEP.
Secretary McGinty responded that she was only given the opportunity to
discuss the proposal at the end of the negotiating process. Senator
Brubaker asked for clarification that there are 150 projects waiting funding.
The Secretary replied that some are active with work taking place. Chairman
White asked if DEP has developed a priority list for HSCA. Secretary McGinty
replied that they have created a priority list based on the potential hazardous
risk of the sites. Chairman White concluded the meeting stating that she
looks forward to working with the Secretary on this issue. Nate
Collins, PA Legislative Services Public hearing re alternate fuel By Nate Collins, PLS The Committee held a public
hearing on proposed alternative fuel mandates. Members in attendance included
Chairman Mary Jo White (Venango), Minority Chairman Ray Musto (D-Luzerne) and
Senators Ted Erickson (R-Delaware), Mike Brubaker (R-Lancaster), Don White
(R-Indiana) and Andrew Dinniman (D-Chester). Dennis Wolff, Secretary,
Pennsylvania Department of Agriculture said Governor Rendell's PennSecurity Fuels
Initiative will strengthen homeland security and create new economic
opportunities by increasing the use of biofuels. The goal of the plan is to
produce nearly one billion gallons of homegrown, renewable fuels annually, he
explained. He said this target will benefit farmers, create new jobs and
enhance our energy security. He offered that under the proposal all diesel fuel
sold in PA must have a minimum renewable content of 2% once annual in-state
biodiesel production reaches 30,000,000 gallons per year, up to 20% when
production reaches 300 million gallons. Secretary Wolff commented that the DEP Secretary Kathleen McGinty remarked that there is a sense of
urgency with this proposal. She stated that fuel supply is an issue all over
the world. She then told the committee that the state can have switchgrass
ready to be made into cellulosic ethanol in seven years. She also discussed
exploration for additional petroleum based fuels. We are consuming three
barrels of oil for every one we are finding, she stated. She concluded by
noting that this proposal is especially timely as the price of oil hit an
all-time high yesterday above $82 a barrel. Senator Brubaker asked for
confirmation that this proposal will not actually make PA energy independent.
Secretary McGinty replied that we will not be able to displace foreign oil
but we want to be able to produce just as much fuel in PA because oil is a
strategic resource. Senator Brubaker commented that we import a significant
amount of oil and we will continue to do so. Secretary McGinty said we import
12% of our oil from the Senator Brubaker asked Secretary
Wolff if he could forecast what the planned ethanol plants in Minority Chairman Musto asked how
this proposal will fit in with the federal plan to require the use of
alternative fuels. Secretary McGinty replied that at the federal level we
will be required to use 7.5 million gallons of biofuels by 2012. She
explained that the PennSecurity Fuels Initiative will fit in with the
proposal because it is based on national security with our fuel resources.
She added that under the federal proposal states will have to build the
infrastructure to meet that requirement. Chairman White questioned why the
state proposal does not allow the market to decide what types of renewable
fuels are produced, and why there is a fixed percentage required per gallon.
Secretary McGinty answered that the governor originally had that same idea
but businesses participating in the workgroups that helped formulate the
proposal said that they wanted to know that every gallon of gasoline would
have 10% ethanol and every gallon of diesel would have 2% biodiesel. She
commented that it would be easier to have one type of fuel at the pumps
instead of a variety of "boutique fuels". Chairman White stated that she
fears a market disruption in western Chairman White inquired if the
legislation requires DEP to conduct an air quality study. Secretary McGinty
replied that the state will see a substantial gain in air quality from the
use of biodiesel, except with regard to NOx. She added that ethanol also has
a positive result on air quality. Chairman White asked if the legislation
would cause a change in PA's federal requirements, to which Secretary McGinty
said it would not. Chairman White obtained the text
of HB 1202, which says that DEP is required to conduct an air quality study.
The Secretary said the department would be glad to do it. Chairman White
inquired how the department will complete the study. Secretary McGinty
replied that DEP has information from the five Senator Dinniman remarked that he
is interested in the economic opportunity and the jobs that this proposal
will create. However, he said that the state must look at all of the impacts
of ethanol thoroughly. Chairman White asked if ethanol is
more flammable than conventional gasoline. Secretary McGinty replied that she
does not believe so but she will look into that issue. Chairman White asked
about concerns with distribution of ethanol. The Secretary explained that
most of the ethanol will be transported by truck and barge instead of pipes
because it must be kept away from water. The Chairman asked if this will
affect the price at the pump. Secretary McGinty said significant distribution
infrastructure is in place in Chairman White inquired if DEP has
completed an economic impact statement on this legislation. Secretary McGinty
said no, but offered that ethanol has been trading at or lower than the price
of conventional fuel, and the prices stay within about five cents of each
other. Chairman White argued that this includes a large federal subsidy for
ethanol. Secretary McGinty agreed, but added that conventional fuel receives
subsidies as well. Chairman White asked why the
decision was made to include a state subsidy and a state mandate instead of
letting the market work. Senator McGinty answered that the Ben Wootton, President of Keystone
BioFuels,
said they are the first company in Senator Brubaker asked about Senator Brubaker asked if other
states will move their subsidies to $2.00 if Chairman White remarked that a
$1.00 subsidy on top of the $1.00 from the federal government is a hefty
subsidy. Wootton argued that oil also has significant subsidies. This
investment will help our economy and create jobs, he stated. He suggested
that there is a return of $2.37 to the federal government for the $1.00
subsidy. Chairman White asked why the legislation includes a subsidy and a
mandate. Wootton said they were not originally concerned about the mandate
but it has become clear that it will force the fuel to the terminal so people
can get it. Without a mandate, it won't be Chairman White asked why the
Pennsylvania Biodiesel Producers Group opposes the renewable biodiesel
product created by Conoco Phillips. Wootton replied that the Conoco Phillips
fuel is petroleum-based, so comparing it to biodiesel is not "apples to
apples". We are making 100% biodiesel from 100% animal fat, he stated.
There is a limited source of funds to invest in technology and the state must
invest it wisely for renewable products, he said. He suggested that the
different products could be funded on a tier- level system. Senator Don White commented that
he toured a biodiesel plant and he never heard about the need for a subsidy.
Wootton replied that he can't comment for the specific company but when they
aren't able to sell their product in the market they will seek a subsidy. Senator Dinniman said from his
understanding the Conoco Phillips product contains a very small amount of
biodiesel. Wootton said he doesn't want to talk about other companies'
products but he can assure the Senator it is a different product from the
biodiesel his company is producing. Senator Brubaker asked Wootton if
he supports the subsidy for ethanol. Wootton replied that they are neutral on
that proposal but he thinks there is a place for ethanol because it will take
a variety of sources to lead PA toward energy independence. Matthew Ehrhart, Pennsylvania
Executive Director, Chesapeake Bay Foundation, said his organization supports
the development of alternative fuels. Cleaner alternative liquid fuels not
only address energy independence and carbon issues, but promise less pollutants that impact water and air quality, he
stated. It is extremely important for states to play an active role in the
federal biofuels discussion, he offered, adding that the new Federal Farm
Bill is currently under negotiation and hundreds of millions of dollars will
be spent on agriculturally-related bioenergy initiatives. " Ehrhart provided the committee
with two different reports: Minority Chairman Musto noted that
Senator Brubaker asked if the
Chesapeake Bay Foundation has considered the environmental impact of
renewable fuels. Ehrhart said they have seen studies and there are some
issues to be resolved. In a broad context, ethanol and biodiesel are better
for the watershed, he suggested. Senator Brubaker noted that the Foundation
is concerned about nitrogen and phosphorus, and he inquired if biodiesel is a
concern. In a well-managed agricultural setting we believe we can have a net
improvement in the watershed, he replied. Senator Brubaker asked if a cover
crop is needed for the 100,000 additional acres of corn. Ehrhart said a
strategy is necessary and cover crops can be part of the solution. Senator
Brubaker asked if the Foundation would partner with farmers in regard to
improvements to crop practices, to which Ehrhart said they would. Joel Rotz, Director of State
Governmental Relations for the PA Farm Bureau, stated his organization supports
adoption of HB 1202 to assist in leading PA towards energy independence. He
cited a study which found that PA's plan to replace 900 million gallons of
petroleum-based transportation fuel by 2017 will add $14.8 billion to the
gross state product and support the creation of 25,775 new jobs. He added
that since last summer national demand for corn nearly doubled the price of a
bushel of corn to $4.00, due largely to ethanol production. Long before the
recent increases in corn prices, red meat supplies were on the decrease due
to earlier periods of strong production driving down prices, he argued. He
offered that the Farm Bureau has adopted the term "cornfusion" to describe
the "erroneous accounts of how ethanol production and corn prices are
driving up food costs." He noted that concerns are being raised by
environmental interests related to the possible environmental impact of more
land, including some environmentally sensitive land, being utilized to grow
corn. The Farm Bureau believes it is misguided to assume more corn production
translates to harmful environmental impacts, he stated. Rotz told the
committee that the Farm Bureau supports protecting and building a future for
biodiesel production in the state by providing a substantial incentive for Senator Brubaker asked if the Farm
Bureau supports the $1.00 subsidy. Rotz replied that they are supportive of
the subsidy because the biodiesel companies make a good case for it. Senator
Brubaker inquired if Conservation Reserve Enhancement Program (CREP) land can
be harvested, to which Rotz replied no. Senator Brubaker inquired if the Farm
Bureau would support using the land if the renewable fuel proposal is
adopted. Rotz said it is hard to say, they would have to look into the issue,
but he thinks they may support it. Senator Brubaker inquired if there
are any cellulosic ethanol plants in Nathan Wilcox from PennEnvironment commented that
"sustainably-produced biofuels are a potentially important tool in the
fight to cut air pollution, reduce our dependence on fossil fuels and tackle
the problem of global warming." He said PennEnvironment applauds the
effort to promote biofuels production in PA there are flaws with the current
legislation (HB 1202 and SB 789). He offered that his organization believes
that coal-to-liquids or "liquid coal" should not be part of any
biofuels proposal. Biofuels offer a tremendous opportunity for Wilcox provided the committee with
two pieces of information: |
