Post by pfsc on Jun 18, 2015 12:24:32 GMT -5
Senate Environmental Resources and Energy Committee
6/2/15, 9:30 a.m., Hearing Room 1, North Office Building
By Kimberly Hess
Video: (click here)
The committee met to consider the nomination of John Quigley as secretary of the Department of Environmental Protection (DEP). The nomination was unanimously reported with no recommendation.
Sen. Pat Vance (R-Cumberland) introduced Quigley, whom she noted began his career with the Alliance to Revitalize Downtown Hazleton and has had roles as the mayor of Hazleton, with newspapers, as a business owner, with the Department of Conservation and Natural Resources (DCNR), and now with DEP.
Quigley provided a history of his career and experiences, noting his experience in economic development. He said DEP’s mission statement is all about balance and said its work must demonstrate that economic development and protection of the environment are inextricably linked.
Chairman Gene Yaw (R-Lycoming) asked about Quigley’s past employment at PennFuture, which also employed the governor’s policy director John Hanger, and Cindy Dunn, the proposed secretary for DCNR, as well as other staff. He asked if the “revolving door” with PennFuture is a conflict. Quigley replied, “no”, and explained his role at PennFuture eleven years ago and business relationships since then, which he emphasized ended more than three years ago. He commented on the limited amounts of employment opportunities in that field.
Chairman Yaw also asked about Quigley’s LLC. Quigley replied he was a “one-man shop providing consultation services” on energy and conservation development.
Chairman Yaw cited Quigley’s past statements regarding the volume of the resources of Marcellus Shale and asked for elaboration. Quigley explained Pennsylvania’s history has been punctuated by waves of natural resources, from forests to coal, and in each case that extract has left scars and impacts that continue to be dealt with. He said the aerial extent of Marcellus Shale underlays two-thirds of the state and said there is clearly the potential for significant cumulative impacts, as thousands of wells could be drilled, thousands of gallons of water used in that drilling, and pipelines laid to connect the system to infrastructure. Quigley said the entire state will be impacted, but opined there is an opportunity to “write an entirely new chapter” to demonstrate how the resources can be extracted responsibly with minimal impact on the environment. He noted the governor wants to see the industry succeed, but proceed responsibly. Chairman Yaw expressed his hope “that we’ve learned something from the prior extraction,” noting the laws are entirely different since those times, and that the gas industry is not being targeted. Quigley agreed there are enumerable laws on the books and businesses face all kinds of regulation, but pointed out that shale gas development in particular is an immensely creative and agile industry and state government needs to keep pace with that development. “That almost of necessity requires regular update of regulations,” but there is no intent to attack anyone, he said.
Chairman Yaw recalled that leasing in 2009 or 2010 when Quigley was the secretary of DCNR resulted in about two percent of total forestlands being disturbed. He called that a situation where some of the impact are “a fairly minor disturbance.”
The chairman also commented on Quigley’s past statement that Marcellus Shale cash has become the “crack cocaine of state government” and questioned why, as secretary, he went along with it. Quigley confirmed he said that, and explained it was said in the midst of the Great Recession and one of the areas looked at to fill budget holes was the wholesale leasing of state forestlands for Marcellus Shale drilling. He said his issue at the time was that the agency did not have any experience with unconventional well development on state lands and wanted to understand the impacts of the first lease before considering additional leasing, but was not allowed that time. He said the agency put an immense amount of effort into trying to get it right by putting together a plan, developed a monitoring system, conducted an analysis of the impacts of additional leasing, and worked collaboratively with the industry on best management practices. He opined “we did the best that we could at the time” and commended the job of the agency and the lessees.
Chairman Yaw noted the governor has said his goal is to protect the coal industry but Quigley is on record of saying “we must seize this opportunity to turn off coal…” He asked how that is supporting the governor’s position. Quigley replied that statement is several years old and said as a private citizen; he now reports to his boss, Gov. Wolf, and fully supports the governor’s position that preserving coal is part of Pennsylvania culture. He also remarked on the “challenge in terms of climate destruction” and said Pennsylvania has an opportunity to lead and model best practices while continuing to maintain the historic industry. He discussed the need to address methane emissions and abandoned wells and to protect coal to ensure it has a strong future. Chairman Yaw opined the gas industry came to Pennsylvania and found the state was an environmental leader and expressed his hope “we do not go overboard.”
The chairman then asked about Quigley’s comments that the taxes proposed by the governor will not drive the industry out because other states have a severance tax already. He explained that the Independent Fiscal Office (IFO) testified yesterday that the proposed severance tax would equate to a 17.3 percent tax and opined that the governor’s proposal will, in fact, have an impact because Pennsylvania would become one of the highest taxed state. Quigley responded that because Pennsylvania has the richest natural gas deposit on Earth the industry is not going anywhere. He also disagreed with the IFO’s method of calculating the effective rate. He added that the overwhelming majority of Pennsylvanians support implementation of a severance tax and investing in education. He acknowledged the “angst” about the price floor and said the administration is monitoring the price situation closely, opining that prices are at the trough and have nowhere to go but up. Quigley said he is asking companies how they can work together to build demand and overcome the low price. Chairman Yaw agreed with that final comment and remarked on the benefits that have been derived from the industry. He further pointed out that the proposed cap on the benefits to municipalities means they will not benefit if the price goes up.
Lastly, Chairman Yaw asked about the Chapter 78 regulations, which have generated 24,000 comments. He said the committee has asked for the department’s responses, but was denied because they are not final yet. He wanted to know “how we have a meaningful review” if the department will not share the comments and noted the Regulatory Review Act is intended to encourage the resolution of objections and the reaching of consensus. Quigley noted this is an area of disagreement. He said the concept of the Chapter 78 regulations began more than four years ago and the agency has held 12 public hearings and 12 public meetings and received an immense amount of comments. The department has gone beyond the law and did advance notice of the final and asked pointed questions in the process about impacts and changes. The agency is required to provide a comment and response document, but, he explained, the process is not at final yet. He said the department will respond to the chairman’s Right to Know request and explained the department is trying to respond to all the comments and is still working toward a final disposition. Quigley said he would be happy to provide that comment and response document when the version is final. He also offered to sit with the chairman and talk about the kinds of comments. Chairman Yaw disagreed, remarking the committee has an obligation in its oversight role to see what is going on and to do that in a meaningful way.
Minority Chairman John Yudichak (D-Luzerne) noted Quigley’s frequent reference to “balance” and commented on the importance of maintaining that balance. He said many times that balance is tipped in the negative and “the legacy of coal haunts” part of Pennsylvania. He asked what plan Quigley has to address that legacy. Quigley replied coal is part of Pennsylvania’s culture and economy and the department has to understand the industry and its needs. He shared that the department has seen overtime a reduction in available resources and thus some functions, including mine safety, are not where they need to be. He said the agency is facing a loss of institutional memory as the average worker in the bureau is age 59 and “our best resource is out people.” He said the agency continues to struggle with the level of the complement, but is working to take advantage of federal resources and is managing money extremely well. He expressed his hope that the department has demonstrated it is “all hands on deck” in situations such as the mine fire in Chairman Yudichak’s district.
Chairman Yudichak asked how the department is balancing the Chapter 78 regulations and the evolution of the industry. He suggested one of the reasons coal was not done correctly was due to the lack of comprehensive development plan. Quigley responded that in terms of striking the balance, “a government that works is a government that listens.” He said the agency is coordinating with the industry, conducted joint trainings with the Marcellus Shale Coalition, worked with the coalition on e-permitting, and is always looking for partnership opportunity and to understand the latest processes. “We have to keep pace…I do not think we are,” he said, noting that Chapter 78 regulations are the agency’s best response to the industry. On the energy side, he said, the governor has proposed a comprehensive energy investment package, which will be funded by a portion of the severance tax. Quigley also remarked on the need for pipeline development to get the gas into the right hands, but a consequence of that is perhaps 25,000 miles of gathering lines will be built across Pennsylvania. He questioned if the department can facilitate that process while achieving environmental and community benefits. Quigley compared the situation and approach to the development if siting standards for wind power. He emphasized the efforts to make sure the development is done right and to the highest standard.
Sen. Scott Hutchinson (R-Venango) took exception to Quigley’s comments that previous waves of development have had negative impacts. He conceded coal may have had negative impacts, but decried the inclusion of timber and oil and gas drilling. He suggested perhaps the only lasting impact is some remaining roads, but many of those have become trails. Sen. Hutchinson then asked about the Chapter 78 regulations and noted Quigley had declined to appear before the House committee to flesh out these issues. He asked about the Technical Advisory Board (TAB), which is statutorily created, but at the April meeting the executive director suggested the statute is guidance and the board can add members at its discretion. He said this is wrong and also noted the lack of authority to create a “mini-TAB.” He asked the limits on the power of the secretary are to ignore what is in statute.
Quigley first responded to the historical observations and pointed out that the senator is from a beautiful part of the state, but a lot of communities were caught in the bust and there were significant impacts from erosion historically. He argued there are still communities that have not fully recovered economically. He acknowledged the opportunities to overcome the legacies of resource extraction, noting the state forests are glorious now. Regarding TAB, Quigley opined the agency has implied power to carry out the mandates of the legislature and in the spirit of cooperation, the proposed nonvoting members were changed to “advisors” and then that proposal was tabled. Regarding the Conventional Oil and Gas Advisory Committee (COGAC), he explained he came to the realization that that industry deserved its own voice and noted Sen. Hutchinson had sent letters recommending members to be appointed as members of that new TAB, advice that he took. Sen. Hutchinson responded that members of COGAC believe they were brought in “as cover” and feel that by having their names there the secretary will have the free range to continue with the most recent iteration of the Chapter 78 regulations to keep them lumped as if they were large Marcellus Shale drillers. He emphasized the differences between the conventional and unconventional industries and decried holding them to essentially the same regulations. He opined he and the secretary will continue to battle on this issue until those small drillers are gone. He questioned the need to change the regulations on the industry when it was fine before unconventional drilling began. Quigley assured the committee and members of COGAC that they are not “cover.” He said the new board was created because the administration is serious about hearing from the industry. He further countered that the last changes were in 1984 and “things were not fine.” He reported 253 documented cases from impacts from drilling. Sen. Hutchinson said those actions were already illegal and said the department should enforce the current regulations. Quigley recognized the distinction between conventional and unconventional and said the regulations carefully consider each provision and preserved the particular needs of the conventional drilling industry. He disagreed with suggestions that the department is not considering the particular needs and said the department is responding to the particular impacts.
Sen. Don White (R-Indiana) indicated he has the same concerns as Sen. Hutchinson. He remarked on the importance of the position of DEP secretary to his district, which hosts a variety of energy sources. He said conventional wells have not been separated to his satisfaction from unconventional wells and asked for assurance that coal will continue to be a major part of the Pennsylvania economy. He offered to work with the secretary in any capacity needed, but asked for help to address the over-regulation and noted the coal industry’s commitment to the environment. Quigley agreed to keep those comments in mind.
Sen. Elder Vogel (R-Beaver) discussed the two power plants in his district and the investments they have made to reduce emissions. He noted the department is using 2012 as the baseline for emissions instead of 2005 and asked if the department will try to get credit from the Environmental Protection Agency (EPA) for the reductions made from 2005-2012. Quigley replied, “yes” and said he is in regular contact with EPA. He noted the rule is not yet finalized and said the governor demands that Pennsylvania’s plan to meet the final rule will be a Pennsylvania-centric plan that protects the role of coal. He offered his commitment to be sure the governor’s mandate is met. He noted that the plan will be submitted to the legislature.
Sen. Vogel commented, regarding the severance tax, that the drillers will leave Pennsylvania. He said the gas in eastern Ohio is richer than the gas in western Pennsylvania. He also remarked on the need to ensure the proposed Shell cracker plant is built. Quigley agreed with need to take advantage of economic opportunities and noted Shell has said the imposition of a severance tax will not have an effect on the Shell cracker plant. He said Shell has said they need an air quality permit to do the plant and the department was able to meet “an impossible deadline” to issue that permit. He expressed his hope that demonstrates the department’s commitment to balance the environment and the economy.
Sen. Andy Dinniman (D-Chester) thanked Quigley for his dedication to “smart growth” and remarked that smart growth addressed the problem of how to save open spaces and still have economic development to the benefit of his county. He asked how smart growth is the answer for the department. Quigley responded that Chester County has established a good model to be mindful of protecting natural resources in the context of economic development. He remarked on the need for community engagement and dialogues to get to common footing to move forward. Sen. Dinniman praised the pipeline task force and pointed out there is no profit from Marcellus Shale unless it gets to market, but there is great resistance to the lines but also an understanding of what could happen if the gas does not get to market. He said “we need to work together for this industry if it’s going to succeed,” and pointed out his region sees very little from the impact fee.
Sen. Camera Bartolotta (R-Washington) remarked on the importance of pipeline infrastructure, but raised concern about differences in enforcement the southwest. She asked why it takes longer in the southwest to get permits, why penalties are assessed differently, and what recourse is available. Quigley discussed the permit decision guarantee program, which is met 92 percent of the time when the permit is complete. He said he wants to raise those rates and address disparities. Regarding the southwest, he pointed out the volume of permit activity is immense, the workforce has been reduced overtime, and institutional knowledge has been lost. He said he is focused on improving performance and not hindering development. Sen. Bartolotta replied the issues are not just in the gas and oil industry in the southwest.
She then asked about coal mining wastewater, noting she will be introducing a bill that will reduce the use of fresh water in drilling by using mine water. Quigley said that is conceptually a great idea, but noted the problems that would arise regarding permitting and protections. He said he is interested in working with Sen. Bartolotta on the bill and said he would follow up regarding specific permitting problems in her district.
Lastly, Sen. Bartolotta asked about the use of refuse coal for energy production, remarking it would solve two problems. Quigley agreed about the economic value of waste coal plants and said the department is very interested in advancing that work.
Sen. Kim Ward (R-Westmoreland) remarked on the importance of coal in the southwest. She then asked about Quigley’s past comments about wanted to do Marcellus Shale “right.” Quigley explained the department wants to get all the economic benefits while protecting the environment. He noted the differences among drillers and said the goal is to get the industry up to best standards. He noted companies that have been certified and are demonstrating leadership. He opined that type of certification is healthy and noted every company has had some violations, but cited Chevron, Shell, and others that have demonstrated a commitment to improvement. Sen. Ward remarked on industry concerns and too many regulations and asked the secretary to keep that in mind.
Chairman Yaw commented “you said all the right things” and was encouraged by the comments that the environment and economy are not exclusive. He suggested, however, that there seems to be something of a negative perspective on business from Quigley. He pointed out that some negatives, like clear-cutting and logging trails, have become treasures of hardwoods and the Old Loggers’ Trail. Chairman Yaw also addressed additional issues that need to be discussed, such as the Chesapeake Bay clean-up. He expressed his hope that Quigley will proceed collaborative as stated. He motioned to report the nomination with no recommendation.
Chairman Yudichak praised Quigley and lamented that the committee is choosing not to make a recommendation.
Sen. Dinniman agreed with his chairman and offered his support for Quigley as secretary of DEP.
6/2/15, 9:30 a.m., Hearing Room 1, North Office Building
By Kimberly Hess
Video: (click here)
The committee met to consider the nomination of John Quigley as secretary of the Department of Environmental Protection (DEP). The nomination was unanimously reported with no recommendation.
Sen. Pat Vance (R-Cumberland) introduced Quigley, whom she noted began his career with the Alliance to Revitalize Downtown Hazleton and has had roles as the mayor of Hazleton, with newspapers, as a business owner, with the Department of Conservation and Natural Resources (DCNR), and now with DEP.
Quigley provided a history of his career and experiences, noting his experience in economic development. He said DEP’s mission statement is all about balance and said its work must demonstrate that economic development and protection of the environment are inextricably linked.
Chairman Gene Yaw (R-Lycoming) asked about Quigley’s past employment at PennFuture, which also employed the governor’s policy director John Hanger, and Cindy Dunn, the proposed secretary for DCNR, as well as other staff. He asked if the “revolving door” with PennFuture is a conflict. Quigley replied, “no”, and explained his role at PennFuture eleven years ago and business relationships since then, which he emphasized ended more than three years ago. He commented on the limited amounts of employment opportunities in that field.
Chairman Yaw also asked about Quigley’s LLC. Quigley replied he was a “one-man shop providing consultation services” on energy and conservation development.
Chairman Yaw cited Quigley’s past statements regarding the volume of the resources of Marcellus Shale and asked for elaboration. Quigley explained Pennsylvania’s history has been punctuated by waves of natural resources, from forests to coal, and in each case that extract has left scars and impacts that continue to be dealt with. He said the aerial extent of Marcellus Shale underlays two-thirds of the state and said there is clearly the potential for significant cumulative impacts, as thousands of wells could be drilled, thousands of gallons of water used in that drilling, and pipelines laid to connect the system to infrastructure. Quigley said the entire state will be impacted, but opined there is an opportunity to “write an entirely new chapter” to demonstrate how the resources can be extracted responsibly with minimal impact on the environment. He noted the governor wants to see the industry succeed, but proceed responsibly. Chairman Yaw expressed his hope “that we’ve learned something from the prior extraction,” noting the laws are entirely different since those times, and that the gas industry is not being targeted. Quigley agreed there are enumerable laws on the books and businesses face all kinds of regulation, but pointed out that shale gas development in particular is an immensely creative and agile industry and state government needs to keep pace with that development. “That almost of necessity requires regular update of regulations,” but there is no intent to attack anyone, he said.
Chairman Yaw recalled that leasing in 2009 or 2010 when Quigley was the secretary of DCNR resulted in about two percent of total forestlands being disturbed. He called that a situation where some of the impact are “a fairly minor disturbance.”
The chairman also commented on Quigley’s past statement that Marcellus Shale cash has become the “crack cocaine of state government” and questioned why, as secretary, he went along with it. Quigley confirmed he said that, and explained it was said in the midst of the Great Recession and one of the areas looked at to fill budget holes was the wholesale leasing of state forestlands for Marcellus Shale drilling. He said his issue at the time was that the agency did not have any experience with unconventional well development on state lands and wanted to understand the impacts of the first lease before considering additional leasing, but was not allowed that time. He said the agency put an immense amount of effort into trying to get it right by putting together a plan, developed a monitoring system, conducted an analysis of the impacts of additional leasing, and worked collaboratively with the industry on best management practices. He opined “we did the best that we could at the time” and commended the job of the agency and the lessees.
Chairman Yaw noted the governor has said his goal is to protect the coal industry but Quigley is on record of saying “we must seize this opportunity to turn off coal…” He asked how that is supporting the governor’s position. Quigley replied that statement is several years old and said as a private citizen; he now reports to his boss, Gov. Wolf, and fully supports the governor’s position that preserving coal is part of Pennsylvania culture. He also remarked on the “challenge in terms of climate destruction” and said Pennsylvania has an opportunity to lead and model best practices while continuing to maintain the historic industry. He discussed the need to address methane emissions and abandoned wells and to protect coal to ensure it has a strong future. Chairman Yaw opined the gas industry came to Pennsylvania and found the state was an environmental leader and expressed his hope “we do not go overboard.”
The chairman then asked about Quigley’s comments that the taxes proposed by the governor will not drive the industry out because other states have a severance tax already. He explained that the Independent Fiscal Office (IFO) testified yesterday that the proposed severance tax would equate to a 17.3 percent tax and opined that the governor’s proposal will, in fact, have an impact because Pennsylvania would become one of the highest taxed state. Quigley responded that because Pennsylvania has the richest natural gas deposit on Earth the industry is not going anywhere. He also disagreed with the IFO’s method of calculating the effective rate. He added that the overwhelming majority of Pennsylvanians support implementation of a severance tax and investing in education. He acknowledged the “angst” about the price floor and said the administration is monitoring the price situation closely, opining that prices are at the trough and have nowhere to go but up. Quigley said he is asking companies how they can work together to build demand and overcome the low price. Chairman Yaw agreed with that final comment and remarked on the benefits that have been derived from the industry. He further pointed out that the proposed cap on the benefits to municipalities means they will not benefit if the price goes up.
Lastly, Chairman Yaw asked about the Chapter 78 regulations, which have generated 24,000 comments. He said the committee has asked for the department’s responses, but was denied because they are not final yet. He wanted to know “how we have a meaningful review” if the department will not share the comments and noted the Regulatory Review Act is intended to encourage the resolution of objections and the reaching of consensus. Quigley noted this is an area of disagreement. He said the concept of the Chapter 78 regulations began more than four years ago and the agency has held 12 public hearings and 12 public meetings and received an immense amount of comments. The department has gone beyond the law and did advance notice of the final and asked pointed questions in the process about impacts and changes. The agency is required to provide a comment and response document, but, he explained, the process is not at final yet. He said the department will respond to the chairman’s Right to Know request and explained the department is trying to respond to all the comments and is still working toward a final disposition. Quigley said he would be happy to provide that comment and response document when the version is final. He also offered to sit with the chairman and talk about the kinds of comments. Chairman Yaw disagreed, remarking the committee has an obligation in its oversight role to see what is going on and to do that in a meaningful way.
Minority Chairman John Yudichak (D-Luzerne) noted Quigley’s frequent reference to “balance” and commented on the importance of maintaining that balance. He said many times that balance is tipped in the negative and “the legacy of coal haunts” part of Pennsylvania. He asked what plan Quigley has to address that legacy. Quigley replied coal is part of Pennsylvania’s culture and economy and the department has to understand the industry and its needs. He shared that the department has seen overtime a reduction in available resources and thus some functions, including mine safety, are not where they need to be. He said the agency is facing a loss of institutional memory as the average worker in the bureau is age 59 and “our best resource is out people.” He said the agency continues to struggle with the level of the complement, but is working to take advantage of federal resources and is managing money extremely well. He expressed his hope that the department has demonstrated it is “all hands on deck” in situations such as the mine fire in Chairman Yudichak’s district.
Chairman Yudichak asked how the department is balancing the Chapter 78 regulations and the evolution of the industry. He suggested one of the reasons coal was not done correctly was due to the lack of comprehensive development plan. Quigley responded that in terms of striking the balance, “a government that works is a government that listens.” He said the agency is coordinating with the industry, conducted joint trainings with the Marcellus Shale Coalition, worked with the coalition on e-permitting, and is always looking for partnership opportunity and to understand the latest processes. “We have to keep pace…I do not think we are,” he said, noting that Chapter 78 regulations are the agency’s best response to the industry. On the energy side, he said, the governor has proposed a comprehensive energy investment package, which will be funded by a portion of the severance tax. Quigley also remarked on the need for pipeline development to get the gas into the right hands, but a consequence of that is perhaps 25,000 miles of gathering lines will be built across Pennsylvania. He questioned if the department can facilitate that process while achieving environmental and community benefits. Quigley compared the situation and approach to the development if siting standards for wind power. He emphasized the efforts to make sure the development is done right and to the highest standard.
Sen. Scott Hutchinson (R-Venango) took exception to Quigley’s comments that previous waves of development have had negative impacts. He conceded coal may have had negative impacts, but decried the inclusion of timber and oil and gas drilling. He suggested perhaps the only lasting impact is some remaining roads, but many of those have become trails. Sen. Hutchinson then asked about the Chapter 78 regulations and noted Quigley had declined to appear before the House committee to flesh out these issues. He asked about the Technical Advisory Board (TAB), which is statutorily created, but at the April meeting the executive director suggested the statute is guidance and the board can add members at its discretion. He said this is wrong and also noted the lack of authority to create a “mini-TAB.” He asked the limits on the power of the secretary are to ignore what is in statute.
Quigley first responded to the historical observations and pointed out that the senator is from a beautiful part of the state, but a lot of communities were caught in the bust and there were significant impacts from erosion historically. He argued there are still communities that have not fully recovered economically. He acknowledged the opportunities to overcome the legacies of resource extraction, noting the state forests are glorious now. Regarding TAB, Quigley opined the agency has implied power to carry out the mandates of the legislature and in the spirit of cooperation, the proposed nonvoting members were changed to “advisors” and then that proposal was tabled. Regarding the Conventional Oil and Gas Advisory Committee (COGAC), he explained he came to the realization that that industry deserved its own voice and noted Sen. Hutchinson had sent letters recommending members to be appointed as members of that new TAB, advice that he took. Sen. Hutchinson responded that members of COGAC believe they were brought in “as cover” and feel that by having their names there the secretary will have the free range to continue with the most recent iteration of the Chapter 78 regulations to keep them lumped as if they were large Marcellus Shale drillers. He emphasized the differences between the conventional and unconventional industries and decried holding them to essentially the same regulations. He opined he and the secretary will continue to battle on this issue until those small drillers are gone. He questioned the need to change the regulations on the industry when it was fine before unconventional drilling began. Quigley assured the committee and members of COGAC that they are not “cover.” He said the new board was created because the administration is serious about hearing from the industry. He further countered that the last changes were in 1984 and “things were not fine.” He reported 253 documented cases from impacts from drilling. Sen. Hutchinson said those actions were already illegal and said the department should enforce the current regulations. Quigley recognized the distinction between conventional and unconventional and said the regulations carefully consider each provision and preserved the particular needs of the conventional drilling industry. He disagreed with suggestions that the department is not considering the particular needs and said the department is responding to the particular impacts.
Sen. Don White (R-Indiana) indicated he has the same concerns as Sen. Hutchinson. He remarked on the importance of the position of DEP secretary to his district, which hosts a variety of energy sources. He said conventional wells have not been separated to his satisfaction from unconventional wells and asked for assurance that coal will continue to be a major part of the Pennsylvania economy. He offered to work with the secretary in any capacity needed, but asked for help to address the over-regulation and noted the coal industry’s commitment to the environment. Quigley agreed to keep those comments in mind.
Sen. Elder Vogel (R-Beaver) discussed the two power plants in his district and the investments they have made to reduce emissions. He noted the department is using 2012 as the baseline for emissions instead of 2005 and asked if the department will try to get credit from the Environmental Protection Agency (EPA) for the reductions made from 2005-2012. Quigley replied, “yes” and said he is in regular contact with EPA. He noted the rule is not yet finalized and said the governor demands that Pennsylvania’s plan to meet the final rule will be a Pennsylvania-centric plan that protects the role of coal. He offered his commitment to be sure the governor’s mandate is met. He noted that the plan will be submitted to the legislature.
Sen. Vogel commented, regarding the severance tax, that the drillers will leave Pennsylvania. He said the gas in eastern Ohio is richer than the gas in western Pennsylvania. He also remarked on the need to ensure the proposed Shell cracker plant is built. Quigley agreed with need to take advantage of economic opportunities and noted Shell has said the imposition of a severance tax will not have an effect on the Shell cracker plant. He said Shell has said they need an air quality permit to do the plant and the department was able to meet “an impossible deadline” to issue that permit. He expressed his hope that demonstrates the department’s commitment to balance the environment and the economy.
Sen. Andy Dinniman (D-Chester) thanked Quigley for his dedication to “smart growth” and remarked that smart growth addressed the problem of how to save open spaces and still have economic development to the benefit of his county. He asked how smart growth is the answer for the department. Quigley responded that Chester County has established a good model to be mindful of protecting natural resources in the context of economic development. He remarked on the need for community engagement and dialogues to get to common footing to move forward. Sen. Dinniman praised the pipeline task force and pointed out there is no profit from Marcellus Shale unless it gets to market, but there is great resistance to the lines but also an understanding of what could happen if the gas does not get to market. He said “we need to work together for this industry if it’s going to succeed,” and pointed out his region sees very little from the impact fee.
Sen. Camera Bartolotta (R-Washington) remarked on the importance of pipeline infrastructure, but raised concern about differences in enforcement the southwest. She asked why it takes longer in the southwest to get permits, why penalties are assessed differently, and what recourse is available. Quigley discussed the permit decision guarantee program, which is met 92 percent of the time when the permit is complete. He said he wants to raise those rates and address disparities. Regarding the southwest, he pointed out the volume of permit activity is immense, the workforce has been reduced overtime, and institutional knowledge has been lost. He said he is focused on improving performance and not hindering development. Sen. Bartolotta replied the issues are not just in the gas and oil industry in the southwest.
She then asked about coal mining wastewater, noting she will be introducing a bill that will reduce the use of fresh water in drilling by using mine water. Quigley said that is conceptually a great idea, but noted the problems that would arise regarding permitting and protections. He said he is interested in working with Sen. Bartolotta on the bill and said he would follow up regarding specific permitting problems in her district.
Lastly, Sen. Bartolotta asked about the use of refuse coal for energy production, remarking it would solve two problems. Quigley agreed about the economic value of waste coal plants and said the department is very interested in advancing that work.
Sen. Kim Ward (R-Westmoreland) remarked on the importance of coal in the southwest. She then asked about Quigley’s past comments about wanted to do Marcellus Shale “right.” Quigley explained the department wants to get all the economic benefits while protecting the environment. He noted the differences among drillers and said the goal is to get the industry up to best standards. He noted companies that have been certified and are demonstrating leadership. He opined that type of certification is healthy and noted every company has had some violations, but cited Chevron, Shell, and others that have demonstrated a commitment to improvement. Sen. Ward remarked on industry concerns and too many regulations and asked the secretary to keep that in mind.
Chairman Yaw commented “you said all the right things” and was encouraged by the comments that the environment and economy are not exclusive. He suggested, however, that there seems to be something of a negative perspective on business from Quigley. He pointed out that some negatives, like clear-cutting and logging trails, have become treasures of hardwoods and the Old Loggers’ Trail. Chairman Yaw also addressed additional issues that need to be discussed, such as the Chesapeake Bay clean-up. He expressed his hope that Quigley will proceed collaborative as stated. He motioned to report the nomination with no recommendation.
Chairman Yudichak praised Quigley and lamented that the committee is choosing not to make a recommendation.
Sen. Dinniman agreed with his chairman and offered his support for Quigley as secretary of DEP.