This is the second in a series of interviews with the gubernatorial candidates on issues related to shale gas development in Pennsylvania.
Meet the candidate in a brief video, and read a more detailed transcript of our interview below. Both the video and transcript have been edited, separately, for length and clarity. The primary is on May 20th.
Name: Katie McGinty
Party affiliation: Democrat
Residence: Wayne, Chester County
Occupation: Operating partner of Element Partners, a clean technology private equity firm. Former secretary of the state Department of Environmental Protection.
Campaign website: www.katiemcginty.com
Q: Do you support a severance tax or the current impact fee on natural gas extraction?
A: We should be like just about every other state in the United States that has oil and gas extraction activities. They have a severance tax and we should have one, too. One of the things that is most distressing about the fact that we don’t have a severance tax is it was one of those areas where Harrisburg did work. When Governor Corbett came to town, there was a bi-partisan consensus that we should impose a reasonable severance tax.
My own proposal is a 4.5 percent [tax] on value and 2 cents on volume. We would raise on the order of about $700 million in its first year of implementation and then with modest assumptions in terms of how that revenue would grow, by year 10 under my proposal, we would be realizing about $1.8 billion of additional much, much-needed revenue in the Commonwealth.
I have also proposed that I would dedicate every penny of that severance tax to restoring the Corbett cuts to public education and I think we have to have those clear priorities now that builds the political consensus to get that severance tax imposed and to restore the funding that’s critically needed to public education.
Q: How is the state doing with environmental oversight of the gas industry?
A: Well, I think the governor has short-changed the people of Pennsylvania with respect to shale gas, both with respect to the environment and the economy. When we have a sevenfold increase in well development as we have seen over the last couple of years, you need a very significant increase in boots on the ground and in enforcement out there to ensure against a major problem unfolding. But this governor sent the signal from the first days in office when there was a directive from the highest levels that there be no field enforcement against shale companies. I know just from former colleagues in the department the great sense that they are significantly deterred from doing their job out there, making sure that there is no infraction of important safety, health and environmental laws. We need to put a priority on environment, health and safety protections.
I think we absolutely need more boots on the ground. We need to make sure we’re investing in training of DEP professionals so they’re keeping up with the rapid developments in the industry. It is a depth and breadth of presence and a depth of capability and skill that we need to be investing in.
Q: Do you support changes to any of the current moratoriums? Note: There is currently a moratorium on new oil and gas leasing in state parks and forests and on hydraulic fracturing in the Delaware River Basin.
A: I very much support the moratorium in state parks and forests and with respect to the Delaware River Basin, I think we in Pennsylvania have a job to do to step up our performance on the environmental side with respect to Marcellus Shale and then [to] convince our [counterparts] in the Delaware River Basin compact that have a seat at the table the same as Pennsylvania. Those are constituencies, other states and the federal government, that we have to convince and I think we have work to do in order to convince them that we’ve got the balance struck correctly in terms of environment and development.
Q: So if we had better regulations, in your view, we could allow drilling in the Delaware River Basin?
A: Well, we’re a far ways from doing it right and I think we need to start by making the investment in real environmental protection and safety protections out there and then take it to our counterparts and hold it up for their scrutiny and I think we can meet the test. We’re not meeting the test right now.
Q: How would you ensure Pennsylvanians benefit from oil and gas jobs?
A: Well, first, instead of slashing the dollars and cents for apprenticeship programs, for example, we should [have been] investing in those programs at a time when a new industry was taking off in Pennsylvania. Instead, Governor Corbett cut job training and apprenticeship programs by some significant amounts – 30, 50 percent. My own proposal would be to restore those dollars and cents and then build partnerships with our technical schools, our community colleges, with public media in order to support training in our rural areas and with the companies themselves, so that we are developing the skill sets that they need on the jobs out there. Those are good jobs.
Q: Could the state be doing more to protect the interests of royalty owners?
A: Well, we need to start by enforcing the provisions of current law which don’t allow for the imposition of various costs on the landowners and on the owners of the gas asset. The landowners need to be paid a fair royalty. They need to be paid a royalty that reflects the value of the resource that they’re providing and they need to be paid a royalty that’s not encumbered by the cost of doing business that the big company faces.
Q: What are your views on man-made climate change?
A: I believe that, regardless of what the climate change deniers say, climate change is a serious threat that must be addressed and it is indeed man-made. While this is a global issue, there is much that Pennsylvania can do to be part of the solution.
As Governor, I will work to ensure the Department of Environmental Protection issues the Climate Action Plan and will seek to implement the plan’s recommendations. My cabinet nominees, including but not limited to the DEP Secretary, will be individuals knowledgeable about the climate issue and possessing deep expertise in executing solutions to complex problems like climate change. We will prepare legislation where required and engage the legislature in an effort to implement the plan.
Additionally, one of my top priorities as governor would be to expand the state’s Alternative Energy Portfolio Standard to require utilities to include renewable, alternative, and advanced energy sources in their portfolios. The portfolio standard was enacted when I was secretary of the Department of Environmental Protection. It created investment, generated jobs, and gave a boost to local economies all when helping to protect the environment.
Q: Describe your long-term vision for Pennsylvania’s energy economy.
A: Number one, I would work to re-establish Pennsylvania’s leadership across the board in energy, including clean energy industries like wind energy, like solar energy. We have the manufacturing capability to build the products and equipment that the world is buying and demanding. Let’s do that.
Second, energy efficiency. Also, when I was secretary, we developed the policies that then became Act 129, a national model in energy efficiency legislation that’s now credited with creating 600 good jobs and saving Pennsylvanians $300 million a year in electricity costs. I would re-up on that successful model.
In terms of our traditional energy industries – oil, coal, gas – I think we need responsible and environmentally sound development of those resources and I would redouble our efforts in terms of strengthening our regulations, strengthening the environmental cop on the beat. But my vision beyond that is to use those resources in that responsible manner to grow value-added industries in Pennsylvania. At a time when there is a resurgence of manufacturing in the United States, that should be happening nowhere more than in Pennsylvania. Chemicals, life sciences, pharmaceuticals, fertilizers – all of those industries use energy resources not just for energy, but literally as a feedstock and a building block to manufacture all of their value-added products. We should be leading the country.