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Governor's Manufacturing Council Issues Report, Calls For State Energy Plan

Gov. Tom Corbett Tuesday joined manufacturing leaders to announce the findings and recommendations of his Manufacturing Advisory Council during a visit to Westport Axle in the Lehigh Valley.

One of the recommendations in the report was to develop a statewide Pennsylvania Energy Plan to take advantage of the state’s Marcellus Shale natural gas reserves.  In July, the Department of Environmental Protection began the process of soliciting proposals for a comprehensive energy analysis to be completed by December 31.

“Manufacturing adds more than $70 billion in value each year to our state’s economy and employs more than 570,000 Pennsylvanians,” said Corbett. “Creating a business climate where manufacturers like Westport Axle can prosper will result in a growing economy and more jobs for our citizens. The company we are visiting today will be adding more than 500 new jobs.”

The 24-member Governor’s Manufacturing Advisory Council, or GMAC, led by the Team PA Foundation, sent its report to Corbett and the General Assembly outlining a list of 15 key recommendations it believes will help Pennsylvania remain competitive in today’s global economy.

The GMAC panel, co-chaired by Department of Community and Economic Development Secretary C. Alan Walker and Carlos Cardoso, chairman, president and CEO of Kennametal Inc., gathered information about challenges facing the industry from a variety of experts and manufacturers. The council conducted meetings over a six-month period starting in January.

“Gov. Corbett tasked the council with tackling the issues manufacturers know hinder their ability to grow and pose the biggest threat to a strong manufacturing sector,” said Cardoso. “The group employed a common-sense approach to address manufacturing challenges in a fair and practical way.”

The council consisted of 23 members from a cross-section of manufacturing interests, including heavy machinery, minerals, pharmaceuticals, plastics, steel and textiles. The council also includes three members of manufacturing trade associations and one from the Industrial Resource Center. Team Pennsylvania Foundation funded the council and no taxpayer dollars were used to support this initiative.

“My goal is straightforward; a healthy economy and a job for every Pennsylvanian that wants one,” Corbett said. “This report provides a solid roadmap for us to work together to achieve that goal in the manufacturing sector.”

Energy Plan

The report said, “Domestic energy production poses a unique multifaceted opportunity for many Pennsylvania manufacturers.  In particular, the shale gas plays have created a unique series of new market opportunities that may provide more growth potential than just a stable low-cost energy.   Local sources of raw materials for plastics and petrochemical related industries, and a growing new customer base of energy related industries provide opportunities for manufacturers from nearly all industries.  Manufacturers are also the largest consumers of energy, which accounts for one of, and in some cases the, largest operating expenses.  The energy used in manufacturing processes is used to produce products that fuel economic growth and job creation. 

“Pennsylvania’s natural gas reserves offer great potential, but there are several barriers for small- and medium-sized manufacturers to enter that market.  Action is needed both at the public and private levels to seize new market opportunities as well as leverage the opportunities from the natural gas boom.”

Specifically, the report recommended, “Developing and implementing a strong statewide energy plan will provide a roadmap for energy independence and economic competitiveness that is critical to growth in the manufacturing sector.” 

Actions to support this objective outlined in the report were--

-- Include policies that are balanced and inclusive of diverse sources of energy, recognizing both a market-based approach as well as government’s role in long-term planning while ensuring reliable energy for manufacturers in both rural and urban locations.

-- Promote the state’s energy resources with a focus on job creation and competitiveness for Pennsylvania-based businesses.  A goal should be to have Pennsylvania energy costs be the lowest and most stable in the United States.

-- In partnership with the natural gas industry develop combined heat and power (CHP) projects to benefit manufacturers.

-- Explore legislation to create a shale gas power authority (i.e. Recharge NY) to coordinate policy and regulation.

-- Coordinate natural gas supply chain development activities and encourage partnerships with producers, associations, economic development entities and government to increase use of Pennsylvania-based suppliers. 

-- Invest in maintaining and modernizing Pennsylvania’s energy infrastructure.

-- For consistency and cost-effective compliance, any state energy-related mandates should not exceed federal mandates.

The report also called for the support of House Bill 1349 (Pickett-R-Susquehanna) requiring an impact statement on small business and House Bill 2022 (Peifer-R-Monroe) creating a Business Permitting Portal.

The full report is available online.

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