Swing state Democrat takes a shot at shaping a winning energy policy

Pennsylvania Gov. Josh Shapiro’s effort to advance clean energy in a state heavily dependent on fossil fuels has him facing a situation that mirrors President Joe Biden’s reelection challenge: showing that stewardship on climate issues doesn’t diminish his standing as a friend of labor.

If he succeeds, it could fuel support for Democrats’ green agenda — and Shapiro's own political ambitions.

Shapiro has proposed capping greenhouse gas emissions from the state’s heaviest polluters, sending proceeds to consumers and requiring that more power be generated from solar, wind and other clean sources. He’s hoping the pitch will appeal to union and business groups that opposed his predecessor’s plan to join a multi-state carbon market while also threading the political needle in the nation’s only divided state legislature.

His next policy moves could drown his administration in political infighting or carve a path for how Democrats — and Shapiro himself — sell their economic message across Rust Belt states. Shapiro’s approach has been somewhat more pro-business than Biden’s, a split that was highlighted by his criticism of the president’s recent pause on liquefied natural gas exports.

“He’s 100 percent trying to carve his own lane on these issues,” state Rep. Mike Schlossberg, a member of the state House Democratic leadership team, said of Shapiro in an interview. "National Democrats’ energy message certainly does well in large swaths of the state, but we have to be realistic and understand that in other areas of the state that are particularly energy heavy, that message is going to swing and miss.”

Shapiro has embraced an “all of the above” energy approach. He has touted Pennsylvania’s status as the only state to secure Biden administration funding for two hydrogen hubs and talked up nuclear power and carbon capture. At the same time, his comments to POLITICO that the LNG pause “needs to be brief” reflect his desire to look out for business interests in a state that is the nation’s second-biggest producer of natural gas after Texas.

“It is a false choice to say we have to choose between protecting our planet and protecting our jobs,” Shapiro said in an interview. “We can have both.”

Success in Pennsylvania could pay off on the national stage for Shapiro, who is considered to be a rising star in Democratic circles. The 50-year-old, who took office in January 2023, won’t discuss any future national ambitions, but other state and national players aren’t so shy.

“Josh has wanted to be president since middle school,” said David N. Taylor, president and CEO of the Pennsylvania Manufacturers’ Association, who first met Shapiro when he was a state lawmaker more than a decade ago. “He’s relentlessly ambitious. The moves that he has made have been tactical all the way along. And quite frankly, who’s to stop him? He’s very very good as a politician.”

That political acumen is reflected in recent polling from Franklin & Marshall College that shows 54 percent of respondents crediting him with doing a good or excellent job, the highest approval rating for a Pennsylvania governor at that point in a first term since Tom Ridge in the 1990s.

Still, depending on whom you ask, Shapiro’s cap-and-trade proposal represents either a serious effort to find common ground among environmental groups, labor unions, fossil fuel interests and lawmakers in both parties or a middle-of-the-road approach that could end up frustrating everyone.

He has made a conscious effort to win support from organized labor for his energy agenda and seemed right at home trotting out to a hero’s welcome at a North American Building Trades Union event in Washington last month where the group formally endorsed Biden’s reelection.

Labor groups had been aligned with Republicans in opposing a five-year quest initiated by Shapiro’s Democratic predecessor Tom Wolf to join the Regional Greenhouse Gas Initiative, a cooperative market program created by Northeastern states to cap and reduce power sector carbon emissions. Shapiro, who served as attorney general under Wolf, created a working group to review the push after taking over as governor last year.

That review gave way to Shapiro’s vision for an in-state, economy-wide cap and trade program that would send most of the proceeds back to consumers for utility rebates, alongside a measure requiring the state get 35 percent of its electricity from clean energy sources by 2035. He offered to stand down on efforts to implement RGGI if the Legislature takes up his proposal.

While Shapiro works to win friends in labor and business, his plan looks likely to face stiff opposition from lawmakers.

State Senate Majority Leader Joe Pittman, a Republican who represents a coal-heavy region in the western part of the state, decried the governor’s proposal as “cap and tax.” State Sen. Gene Yaw, the Republican chair of the Senate environmental committee, also isn’t on board.

Then there’s state Rep. Greg Vitali, the Democratic chair of the House environmental panel, a staunch RGGI supporter who wants Shapiro to focus his attention on joining the multi-state market.

“We’re going to work through it,” said Shapiro, who framed his proposal as a starting point for negotiations. “We’re going to do what we need to do to find common ground.”

His effort to court labor support could be particularly helpful in that regard, but have consequences for Shapiro’s attempt to find the sweet spot.

“As much as we talk about the blue-green alliance, labor is frankly climate agnostic,” Vitali said. “They just want to build stuff, be it natural gas pipelines or coal plants or wind turbines. So there's this conflict between good environmental policy and keeping labor happy. Elected Democrats tend to view labor as more important to their political ambitions than environmental groups.”

“He clearly made a calculation” on the LNG issue, said David Hess, former state Department of Environmental Protection secretary in a Republican administration. He “wanted to show some daylight between him and Biden on this particular issue. He’s in the middle of a minefield.”

But he’s not a “mindless moderate,” said Democratic state House Majority Leader Matthew Bradford, who credits Shapiro for trying to break the state’s “logjam” on climate issues.

In areas where he could attract Republican support, like on hydrogen, carbon capture and nuclear, Shapiro has faced backlash from environmentalists who question whether those technologies should play a role in efforts to transition the economy away from fossil fuels.

The pushback is a testament to the difficulty the governor will face in trying to slash emissions, grow the economy and boost regions that have been battered by the decline of coal — in a state with a lucrative natural gas industry that Biden narrowly flipped blue four years ago and that is likely to be competitive again this November.

Yaw, whose committee approved a bill that would repeal the regulation allowing RGGI participation, said, “Is he pissing off everybody? Maybe he is.”

But people across the spectrum agree that Shapiro has a knack for bringing groups together and generally foster good relations.

His brand of energy politics is “certainly a more pragmatic” one compared with Wolf and has appeal to energy-reliant corners of Pennsylvania, Schlossberg said. Charlie Dent, a former Republican Pennsylvania representative, said that Shapiro has “tried to bring Republicans in — not positioning himself as a partisan Dem.”

That positioning might come in handy.

“I hope he runs for president someday,” said Rep. Susan Wild (D-Pa.), who said she regularly texts with Shapiro and has spent a lot of time with him since her 2018 election. “But I also hope that he stays with us for eight years. I think that he absolutely is part of an excellent, excellent bench that we have for future presidential campaigns.”