Federal funding worth tens of millions of dollars for highway and bridge projects in southwestern Pennsylvania is on track to be halted starting in mid-December after Republicans on a state House committee objected to a rule to control air pollution from oil and gas wells.
The air quality sanctions set to take effect on Dec. 16 would strip the state and local governments of authorization to spend most federal transportation funds in 15 counties, including Allegheny, Washington, Butler, Beaver, Westmoreland and Fayette.
The Pennsylvania Department of Transportation expects Allegheny County alone could lose at least $37.4 million in federal highway funds next year if the sanctions persist through 2023, with the other southwestern Pennsylvania counties losing $28 million more.
Across the state, the Wolf administration said nearly $1 billion in transportation funding is in jeopardy from sanctions, although the total amount will depend on how long it takes for the oil and gas air pollution rule to be put in place.
Gov. Tom Wolf called the gambit by House Republicans “simply a disgrace.”
“There is no good reason to block the rule-making, but there are extreme consequences for doing so,” he said in a statement on Thursday.
He said his administration “is reviewing all options to prevent the sanctions from being implemented.”
The fiscal brinkmanship peaked on Monday, when Rep. Daryl Metcalfe, R-Cranberry, called an immediate, previously unannounced meeting of the House Environmental Resources and Energy Committee to vote on a letter disapproving the air pollution rule, saying it is procedurally flawed and harms businesses.
Democrats on the committee said they were not given the letter to review prior to the vote, which passed on party lines during the lame-duck session.
The disapproval vote has almost no chance of stopping the rule from ultimately being implemented. But because the mandated timeline for reviewing regulations stretches past the end of the legislative session on Nov. 30, the vote will delay the rule from being finalized until at least February.
Democrats on the committee wrote a dissenting letter noting that “meeting the December 16 deadline is no longer possible,” and said, “It’s hard to see Monday’s vote as being animated by anything other than spite.”
Pennsylvania is four years past the deadline when it was required to implement the oil and gas air pollution controls, which are based on federal guidelines released in 2016. The U.S. Environmental Protection Agency issued a warning in 2020, which triggered the sanction clock.
The oil and gas rule will require upgrades at existing well sites to cut releases of smog-forming chemicals called volatile organic compounds while also curbing emissions of methane, a potent greenhouse gas.
The state’s Independent Regulatory Review Commission found the rule to be “in the public interest” on Thursday.
The rule at issue applies only to conventional wells, which are typically shallower, smaller and older than unconventional wells that target the Marcellus and Utica shales.
Republicans on the House energy committee opposed a similar rule for shale wells this summer and adopted a resolution to try to block it. But the full Republican-led House never took up the resolution, and it expired without action last week.
Both rules must be adopted to avoid the highway sanctions, or to lift them once they are in place.
Sanctions are automatic under the federal Clean Air Act, and the U.S. EPA does not have discretion over whether to impose them if the issue isn’t corrected, the EPA said.
An EPA spokesman said the agency “continues to work with state officials and federal partners on this matter.”
The state oil and gas rule has followed a tangled path since the federal standards were introduced in 2016. During the Trump administration, the U.S. EPA proposed to withdraw the guidelines then decided to keep them in place.
The state Department of Environmental Protection proposed a combined rule for both conventional and shale wells in 2019 but did not advance a final version until this March.
House Republicans and trade groups for the state’s conventional oil and gas industry objected that the combined rule violated a state law requiring the two industries to be regulated separately. That spurred DEP to split it in two this spring to try to avoid further delays as sanction deadlines loomed.
It didn’t work.
Metcalfe, who is retiring this year, said the Legislature is “exercising proper oversight” and blamed DEP for delaying development of the rules.
“It was four years and then the EPA warned them sanctions were coming in two more years and it still took them until this year to finally try and ram something down our throats,” he said during the heated meeting to disapprove the rule on Monday.
“If money’s at risk, it’s the Wolf administration that’s put it at risk,” he said.
The disapproval letter, which was signed by the committee’s 15 Republican members, said “DEP clearly needs to start over with this regulation” — a process that typically takes two years.
Rep. Greg Vitali, D-Delaware, the committee’s minority chairman, chastised Republicans for signing on to Metcalfe’s letter. “Believe you me, we will make the point about how you, like lemmings, followed this man off the fiscal cliff,” he said.
In his statement, the governor said any federal highway funding that is withheld “cannot be recuperated” and the sanctions can affect projects to expand highways, build new roads and restore bridges.
Democrats on the committee said nearly 300 projects could be affected, including, in Allegheny County, work on the Highland Park Bridge interchange and several projects on I-376 and I-79.
The sanctions apply to counties whose air quality does not meet federal standards for ozone pollution, or smog. In addition to southwestern Pennsylvania, it will affect Philadelphia and its surrounding counties, the Lehigh Valley, Lancaster and Reading.
DEP officials say the pollution control rule is expected to have significant economic benefits for the conventional oil and gas industry, because it will keep between $16 million and $46 million worth of gas from leaking into the atmosphere each year before it can be sold.
The rule is expected to cost the conventional industry nearly $10 million per year to conduct monitoring and swap out equipment that bleeds gas by design.