Legislators, Natural Gas Synthesis Plant Developer Upbeat on New Tax Credit Law

By Dave Fidlin/The Center Square

KINGSTON, PA – On the heels of its recent passage, a cross-section of Pennsylvania legislators and private industry representatives gathered recently to discuss how a new law could pump new revenue into the state’s economy and dually create new jobs.

The state Senate and House Majority Policy committees held a joint hearing and discussed Act 66, which provides tax credits to up to four businesses manufacturing dry natural gas products.

Democrat Gov. Tom Wolf signed the bipartisan effort into law in July after vetoing a version of it in March. This spring, Wolf cited multiple reasons for his initial decision, including concerns with the financial stimulus provisions and job creation specifics.

Wolf reversed course this summer after striking an agreement with state Republican lawmakers in both branches on what had been House Bill 732. Revisions expanded financial relief, particularly as COVID-19 upended the economy.

“It was passed after a long, hard effort,” state Sen. David Argall, R-Mahanoy City, said at the hearing. “It was months of hard work. The end result is a product that is going to provide a lot of reinvestment into communities.”

A number of lawmakers sitting on the committee expressed optimism in the long-term impact Act 66 could have on the state’s economy with new, modern efforts to maximize one of Pennsylvania’s natural resources.

“The opportunity this legislation has is truly a transformative game-changer,” state Rep. Aaron Kaufer, R-Luzerne, said as he referenced the projected 4,400 jobs that could arise from Act 66’s provisions.

While Act 66 has been a bipartisan effort, concerns over the state’s use of a traditional power source in lieu of solar have been raised throughout the legislative process.

But from his vantage point, state Sen. John Gordner, R-Bloomsburg, said the use of natural gas does not have to be an “either or” proposition as environmental protective measures are factored into the equation.

“You can choose both,” Gordner said. “This is a good example of it.”

During the lengthy, wide-ranging hearing, the committee heard from a range of business owners and advocacy groups on the merits of Act 66.

Perry Babb, CEO of KeyState Natural Gas Synthesis, discussed how the new legislation could impact his business with a number of innovations on the horizon. Babb said KeyState has a number of efforts in the pipeline, including a system that can capture and store carbon dioxide. His project would be located in West Keating Township in northwestern Clinton County.

“The kinds of jobs this can create are substantial. These are long-term, good paying jobs.” Babb said. “I think this is an ingenious piece of legislation, quite frankly.”

Babb, who said he does not foresee any obstacles on the horizon within Wolf’s administration, said KeyState is in the midst of a second phase of developing its plans with a third step expected to last the final nine months of 2021.

If all goes as planned, Babb said he anticipates construction of KeyState’s new manufacturing facility getting underway in 2022 and taking two to two-and-a-half years to complete.

Representatives from several specialized trades, including boilermakers, also offered input during the hearing.

With other traditional energy sources on the decline – including coal and nuclear – the renewed emphasis on natural gas is welcome to the profession, said Martin Williams, national coordinator of state legislative affairs with the International Brotherhood of Boilermakers.

“It will provide a little more certainty for our members’ careers. Our industry is very tied into the energy sector,” Williams said. “Without natural gas, I shudder to think what would become of the boilermaker trade in Pennsylvania.”

While he lauded Act 66, Carl Marrara, vice president of government affairs with the Pennsylvania Manufacturers Association, called on lawmakers to consider additional steps to bolster the state’s business climate, including a reform of the tax code.

“The passage of Act 66 is not where the work ends, but where it begins,” Marrara said. “Major corporate tax policy changes are needed. Pennsylvania simply does not move at the speed of business.”