Nov. 2—Pennsylvania has failed to get a piece of the new domestic wave of high-tech, next-generation microchip production, as major producers have broken ground on nearly $100 billion worth of new plants in Arizona, Ohio and upstate New York.
Lawmakers instead have decided to double down on committing more state resources to the fossil-fuel industry. Without so much as a public speech, hearing or floor debate, the General Assembly this week passed a $2 billion package of tax credits, 90% of which will go the natural gas industry.
The objective is to establish one or more "hydrogen hubs" in Pennsylvania, under a U.S. Department of Energy program. The DOE will provide $7 billion in grants to establish at least six and as many as 10 "regional clean hydrogen hubs" around the country. The new state tax credit giveaway is meant to sweeten the pot for potential developers.
Hydrogen can be used to supplant more carbon-heavy forms of energy for industrial production, transportation and more. It's a legitimate part of a broad technological effort to reduce carbon emissions.
But there are multiple ways to produce hydrogen at the necessary scale, including from renewable sources. But Pennsylvania has decided to go all in on producing it exclusively from natural gas, enriching the industry at public expense while diminishing the potential environmental benefits of hydrogen production.
The process itself will produce substantial emissions from the combustion of natural gas, which advocates claim can be reduced by 76% using unproven carbon-capture and storage technology. And it does not account for the environmental costs of increased natural gas production, including methane leakage that could reduce or eliminate the carbon-reducing benefits of hydrogen fuel.
This giveaway is just the latest. The state already has approved major subsidies for proposed plants to convert natural gas into anti-freeze and gasoline, and another $1.7 billion to reward Shell for producing plastics that largely will be used for single-use bags and films.
In all, the subsidies amount to more than $4 billion over 20 years.
If these projects are worthwhile to the industry, it makes no sense for Pennsylvanians to have to subsidize them, since the gas that is the raw material is here.