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Event recap
On February 18, 2021, the Atlantic Council Global Energy Center, in collaboration with the University of Pittsburgh Graduate School of Public and International Affairs (GSPIA), hosted a public event to evaluate the future of Pennsylvania’s energy industry. Leaders representing Pennsylvania’s solar, gas, coal, and wind sectors provided their insights and perspectives on the future of their respective fields and the state’s energy landscape writ large.
In kicking off the event, Professor Jeremy Weber, public administration program director and associate professor at the University of Pittsburgh GSPIA, delivered opening remarks. In his presentation, he highlighted the tremendous growth in Pennsylvania’s natural gas production, while also noting that state-wide coal production has managed to stay competitive with other power sources over the last decade. Weber also spotlighted Pennsylvania’s limited installed utility-scale solar and wind energy capacity. Following his remarks, the event moved into a virtual panel discussion featuring Rachel Gleason, executive director of the Pennsylvania Coal Alliance, Andrew Gohn, director of Eastern state affairs at American Clean Power, Kathryn Klaber, managing partner of Klaber Group, Chris Leaman, president and owner of JK Mechanical, and Hilary Mercer, vice president of Pennsylvania Chemicals at Shell. George Frampton, senior fellow at the Atlantic Council Global Energy Center, moderated the conversation.
Frampton kicked off the discussion by asking each panelist to identify the single-largest challenge that each of their sectors will face in the next five years and the actions they are taking to address it. Representing the natural gas industry, Klaber first described the rich shale resources from the Appalachian Basin, the diverse fuel and end-use applications of natural gas, and the myriad demand opportunities for the sector in the Northeast and Mid-Atlantic regions. Klaber identified two critical challenges for the natural gas sector: 1) pipeline predictability has decreased in the last five years, which has created constraints on investments and reliability, and 2) the integration of more renewable energy on the grid requires stronger balancing in the overall electricity mix.
Discussing the opportunities and challenges for Pennsylvania’s solar industry, Leaman began by saying that the sector experienced strong growth between 2009 and 2014 but that development has flattened over the past five years. Leaman described the primary challenge facing Pennsylvania solar as one of affordability, a problem which he claims has been exacerbated by import tariffs on panels and other photovoltaic equipment. These challenges, Leaman detailed, can be overcome with promising technologies and market incentives such as distributed energy resources, distributed energy storage, and competitive renewable energy credits. And in responding to a question from Frampton, he also added that community solar has shown rising promise in Pennsylvania.
Pivoting to the coal industry, Gleason provided an overview of Pennsylvania’s rich coal resources and their associated products: electricity and steel. The biggest challenge facing this sector, Gleason opined, is the possibility of Pennsylvania joining the Regional Greenhouse Gas Initiative. If this were to happen, Gleason asserted, coal-fired power generation would decrease. She also mentioned that if a national greenhouse gas emission standard were to be implemented, the coal industry would also witness a drop in generation output over the next decade.
The discussion moved to discuss Shell’s Pennsylvania petrochemicals complex, which consists of an ethylene cracker plant that uses shale from producers in Pennsylvania to produce petroleum products. In looking ahead, she stated, “we see the need for power growing, and in providing that power, it’s essential that it become cleaner.” She expressed that the petrochemicals produced at the complex are vital to the clean energy transition, given many of the facility outputs serve as important components in electric vehicles, wind turbines, and solar panels.
Shell’s net-zero commitment, which the company intends to reach by 2050, signals that they intend to be a part of the global energy transition. In order to meet this commitment, Mercer asserted that the hydrogen and biofuel industries must grow, and that the circularity of the petrochemicals economy must improve. She emphasized that Pennsylvania has a big opportunity to benefit from the energy transition in developing the key technological innovations that will accelerate the green economy.
In discussing prospects for renewable energy development in Pennsylvania, Gohn noted that the Keystone State ranks second among Eastern states in terms of wind energy production. However, Gohn noted that the state’s wind energy sector does face a price competitiveness challenge as result of the low cost of natural gas. Additionally, he emphasized that policy measures, such as the state renewable energy portfolio standard, should be stronger to drive clean energy development. Currently, according to Gohn, there are over 1,600 megawatts of installed wind and solar capacity in Pennsylvania, and both sectors directly employ about 6,600 people. Looking ahead, Gohn reiterated that, in building on technological advances, there are many growing opportunities to develop more wind energy generation across the state.
Frampton mentioned Governor Tom Wolf’s 2019 executive action establishing an 80 percent emissions reduction target, and followed up to ask how natural gas and coal would be affected by that policy in Pennsylvania. Gleason explained that in order for that state goal to be achieved, there must be significant technological advances in the fossil fuel industry as well as a comprehensive look at cross-state rules. Klaber made a clear case for natural gas’ important role in emissions reductions and included examples of current developments in methane capture across the natural gas operations value chain. Adding to the discussion on technology development, Mercer expressed that hydrogen has incredible potential to decarbonize hard-to-abate sectors and is essential for meeting ambitious net-zero goals.
In responding to audience questions, Leaman affirmed that although it is possible to buy US-made solar panels, they are more expensive than imported materials and most customers opt to purchase cheaper equipment from abroad. In addressing the potential economic and job opportunities that could result from ambitious federal infrastructure legislation, Gleason posited that such a bill would incentivize innovation across all sectors of the power industry. Mercer added that federal investment in infrastructure would help drive private sector stakeholder interest in clean energy projects. Taking a different angle, Gohn asserted that federal investment could help renewable energy deployment if directed at transmission development and expansion. To conclude, Weber affirmed that, to maximize impact, energy policy must consider each energy source’s diverse applications, resource potential, and distinct role in the energy transition.
Maria Castillo is a Spring 2021 Intern at the Atlantic Council Global Energy Center.
Agenda
Opening remarks by
Professor Jeremy Weber
Public Administration Program Director; Associate Professor
University of Pittsburgh Graduate School of Public and International Affairs
A conversation with
Rachel Gleason
Executive Director
Pennsylvania Coal Alliance
Andrew Gohn
Director, Eastern State Affairs
American Clean Power
Kathryn Klaber
Managing Partner
Klaber Group
Chris Leaman
President & Owner
JK Mechanical
Hilary Mercer
Vice President, Pennsylvania Chemicals
Shell
Moderated by
George Frampton
Senior Fellow, Global Energy Center
Atlantic Council
Learn more about the Global Energy Center
The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.