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Southwestern Pennsylvania industry leaders call for a less aggressive energy transition strategy

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Reid R. Frazier
/
StateImpact Pennsylvania

A report compiled by academics and leaders in heavy industry, charts a moderate course for southwestern Pennsylvania’s energy transition. The Allegheny Conference on Community Development’s energy task force spent a year strategizing how the region could retain its energy leadership role while cleaning up emissions.

“Southwestern Pennsylvania 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 Community Development, last week. “To balance the growing demand for energy while we all strive to move to a low carbon future.”

But the strategy laid out by the task force is not as aggressive as the target set by world leaders at international climate talks. The COP26 summit in Glasgow last year called for limiting global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) while the Allegheny Conference’s strategy would limit warming to 2 degrees Celsius (3.6 degrees Fahrenheit). If the region does nothing to clean up its act, global warming could reach between 2.5 and 3.5 degrees Celsius (4.5 to 6.3 degrees Fahrenheit), according to the report.

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The region cannot feasibly meet the more aggressive target, argued Hilary Mercer, energy task force co-chair and senior vice president of Shell Polymers.

“It basically will be unrealistic in the short run,” said Mercer. “It’s largely because, in this region, we have a very high concentration of what we would call hard-to-abate industrial activity.”

That hard-to-abate activity includes steel, plastics and cement manufacturing, which require large amounts of heat. Mercer said the more aggressive strategy should remain an “aspirational goal” but argued that new technology would be required to help industries meet these targets.

The energy task force was also chaired by William Demchak, CEO of the PNC Financial Services Group and board member of the Allegheny Conference. The larger panel included representatives from Columbia Gas, Peoples Natural Gas, Westinghouse Electric, Duquense Light Company, First Energy, U.S. Steel, The University of Pittsburgh and Carnegie Mellon University.

The report lays out six strategies that could cut down on emissions from industry and power sectors, which make up 76% of the region’s total emissions. Emissions in Southwestern Pennsylvania are as much as 55% higher per capita than elsewhere in the state or the nation.

The report found the top five emissions sources in Southwestern Pennsylvania are: coal power (25%); natural gas power (14%); passenger vehicles (11%); coal mining (9%); and iron and steel manufacturing (9%).

The report suggests reducing emissions by deploying carbon capture and storage solutions, developing hydrogen as an alternative fuel, cutting methane emissions, making energy grid improvements, increasing building efficiency and electrification and electrifying transportation.

The goal of the six-pronged strategy is to balance the need to reduce carbon emissions with the need for economic growth. The report argues that Washington, Beaver, Greene and Indiana counties rely heavily on the energy sector for jobs and regional products and that losing those jobs could devastate the economy. Washington County produces the second-highest oil and gas extraction revenues in the state, accounting for 13% of its total oil and gas production value.

“We have to make sure that local economies, when they decarbonize, they don’t essentially depopulate and leave their community behind,” said Mercer. She argued that mass exodus could be prevented by policies that balance economic growth with the need for greener energy.

But the report also argues that a smart energy transition will entice investment in the area over the next several years. “The deployment of the strategy should bring strong economic benefits to the region, making it more attractive for business investment and job creation across a variety of industries,” the report reads.

“If we do nothing, we lose a lot of jobs quickly,” said Vera Krekanova, the conference’s chief research officer. “If we do something, and the more of the something we do, we not only reverse this trend of job loss but we have a high potential to bring jobs that are of a higher quality,” to the region.

The task force argues their strategy would produce 60,000 new jobs with wages that “will meet or exceed that of lost jobs.”

But those new jobs would also require new training. Kevin Walker, president and CEO of Duquense Light Company, said it’s imperative that the entire region is afforded the opportunity to access those new jobs.

“We know that there’s going to be a transition in skill requirements,” Walker said. “We want to make sure that’s available, accessible and moved into the different counties in an equitable way.”

One way the task force imagines making that possible is by partnering with the region’s academic institutions to create transitional job training in the energy sector.

The group emphasized a desire to keep southwestern Pennsylvania among the top energy exporters in the U.S. The state exported the highest amount of megawatt-hours of electricity in the country last year. But one transition the report suggests is making the region a hydrogen hub. Hydrogen is an alternative fuel made from natural gas and steam.

“We have an opportunity to better leverage our legacy economy by recognizing natural gas, hydrogen and other assets as part of the solution,” said Bill Demchak, president and CEO of the PNC Financial Services Group. “We have an opportunity to take what some may view as weaknesses and turn them into strengths that can help advance the energy transition not only for our region but for the country.”