With world energy prices rocked by the fallout from the pandemic and the war in Ukraine, there’s an unlikely savior available: Pennsylvania.
The state is a major energy producer and exporter and has the capacity to grow but can’t do so without recognizing the impact on climate change, according to a new report from the Allegheny Conference on Community Development.
A Conference-led task force of energy industry players and experts prepared “Our Region’s Energy’s Future” as a roadmap that maintains energy’s massive impact on jobs and economic growth, yet recognizes the reality that working toward a lower-carbon future is necessary.
“Southwestern PA is well-positioned not only to adapt to an energy reality but to actually lead the way,” said Stefani Pashman, CEO of the Allegheny Conference, on Friday morning. “Our long and evolving history and expertise in energy innovation, broadly speaking, is differentiating us and giving us great credibility.”
The task force is comprised of more than 25 members and was co-chaired by Allegheny Conference board members Bill Demchak (president and CEO of PNC Financial Services Group) and Hilary Mercer (senior VP of Shell Polymers-Pennsylvania Chemicals). The report was compiled by experts from industry, academia and philanthropy.
“As part of the Allegheny Conference’s 2020-2030 vision for the region, we committed to developing a comprehensive strategy to move the region towards a low-carbon future,” noted Pashman.
The report notes that 24% of gross regional product is from the energy (and energy-intensive) sector, along with 14% of regional employment. Pennsylvania exported more electricity in 2021 than any other state — 35% of the electricity generated.
Emissions are also 50-55% higher in Southwestern PA than in the nation as a whole (on a per capita basis). Industrial and power sectors make up 76% of emissions. The top five emissions sources are: coal power (25%), natural gas power (14%), passenger vehicles (11%), coal mining (9%) and iron and steel manufacturing (9%).
The report frames decarbonization efforts not as something that will eliminate fossil fuel extraction jobs — though that may happen — but as something that will improve the region’s competitiveness for capital investment and job creation.
The report also attempts to chart a middle path, rejecting both the do-nothing approach and the pathway to decarbonization as charted by the recent climate conference in Glasgow.
“The task force determined that a scenario of doing nothing was just not an option,” said Mercer. “Not only would we fall short of what’s required to avoid dangerous climate change, but we’d also make our region increasingly less attractive for national and also global investment.
“We also determined that actually a very, very aggressive decarbonization path … would also fall short. It would basically be unrealistic in the short run, and it’s largely because in this region, we have a very high concentration of what we would call hard-to-abate industrial activity.”
However, Mercer noted that the region should keep the more ambitious emissions reduction pathway as an “aspirational goal,” should advances in technology enable it.
“We concluded that our middle path is both necessary in order to use greenhouse gas emissions, but it’s also doable if we tackle two critical areas: decarbonization of industrial production, and also decarbonization of power generation.”
Carbon capture, a regional hydrogen hub (for energy and transportation), wide adoption of electric vehicles and massive investment in electrification are all key components of a lower-carbon future. Nuclear power and natural gas will remain a part of the mix.
This approach would also create 60,000 jobs, with average wages that are equal to or above the wages of the jobs they replaced, noted Mercer.
Though the future is unknown, the report points to some recent success. In 2007 (the recent peak year for power-related carbon dioxide emissions), Pennsylvania’s power generation increased by 7% but emissions declined by 37%. That’s largely due to the large-scale replacement of coal with natural gas.