State of Play: LCFS in Pennsylvania
In December, Pennsylvania governor Ed Rendell joined several states in signing a Memorandum of Understanding laying out a timetable for the future implementation of a Low-Carbon Fuel Standard (LCFS). In committing his state to the agreement, Gov. Rendell pledged to work with other states to “ensure the development of a strong federal program” for imposing an LCFS nationwide. After signing the document, the governor characterized the LCFS as a policy that “can create thousands of more jobs” – all while “breaking the addiction to foreign oil.”
Unfortunately, the only way an LCFS can “work” as engineered is by rendering secure, affordable sources of energy off limits – thereby having the effect of significantly expanding our nation’s dependence on foreign, LCFS-favored energy to meet its daily needs.
Production and Distribution: How/Where Does Pennsylvania Get Its Energy?
Pennsylvania is credited with the distinction of being home to the first commercial oil well ever successfully drilled – Drake Well, August 1859, Titusville, Pa. One hundred and fifty years later, Pennsylvania today produces scarcely 0.2 percent of the nation’s petroleum supplies, according to EIA — although recent advancements in technology have allowed the state to dramatically increase the volume of natural gas produced from the Marcellus Shale.
Although Pennsylvania may not produce much oil, it remains the most prolific refining state in the entire Northeast – receiving daily shipments of foreign crude through ports in Marcus Hook and Philadelphia. All told, the state receives crude oil imports from eight separate foreign countries, in addition to shipments from the Gulf Coast and points south. The following graph presents this reality in greater detail:
Source: Energy Information Administration, Company Level Imports, Dec. 2009
LCFS Impact on Pennsylvania
Like many Northeastern states, Pennsylvania relies heavily upon home heating oil to keep warm during the cold winters. In fact, almost a third of households in the state use fuel oil as their primary energy source for space heating – supplies that a regional LCFS program will make more expensive to purchase and more difficult to access in the future.
In 2009, Pennsylvania secured over $308 million from the federal Low-Income Home Energy Assistance Program (LIHEAP) to help subsidize the purchase of these fuel resources for those in need. Unfortunately, under the LCFS, a large portion of this fuel oil may be targeted for elimination, adding additional strain to an already over-extended LIHEAP budget.
But while an LCFS is sure to impact the residents of Pennsylvania, the vast majority of energy in the state is consumed by the state’s industrial sector, including aluminum production, chemical manufacturing, glass making, petroleum refining, forest product manufacturing and steel production. With higher costs for fuel and dramatically reduced availability of it, the ultimate effect of an LCFS could be significant job losses in the state.
