Benefits of Natural Gas Production Realized by “Every Single Pennsylvanian”

Canonsburg, PA – While a clear majority of Americans – facing stubbornly high national unemployment and underemployment rates – still believe that the U.S. economy is getting worse, according to new Rasmussen Reports research, positive, private sector-driven economic growth continues to buck trends across Appalachia.

One key factor? According to a new Associated Press analysis, Pennsylvania mineral owners and family famers received more than $400 million in Marcellus Shale royalty payments in 2011 alone, while the natural gas industry invested several billion dollars in the commonwealth during that time. As Fadel Gheit, a senior oil and gas analyst with Oppenheimer & Co., tells the AP, “We are producing record levels of natural gas.”

This from the AP story:

  • Gheit said the real value of shale gas is that the lower energy cost is making American industry more competitive around the world. That opens doors for long-term investments, such as Shell Oil’s plan to build a huge petrochemical plant in western Pennsylvania. “In my view this is much bigger than anything we’ve seen in our lives” as far as a new energy development, Gheit said of shale gas.
  • Kathryn Klaber, president of the Marcellus Shale Coalition, said the current low natural gas prices benefit consumers throughout the state. “Every single Pennsylvanian has more money in their pocket today — to save, invest and help make ends meet — as a result of plentiful natural gas development from the Marcellus Shale,” she said.

Natural gas-related consumer savings and economic activity across the region are indeed being broadly realized. But importantly at the same, natural gas producers are taking further steps – anchored in content-rich Recommended Practices – aimed at ensuring that we get this historic opportunity now and for further generations.

From more jobs and a robust manufacturing base, to reducing the environmental impact of natural gas production while identifying new ways to positively leverage America’s abundant natural gas supplies, our industry remains focused on raising the bar and operating in line with our Guiding Principles.

STRENGTHENING U.S. COMPETITIVENESS, DRIVING AN AMERICAN MANUFACTURING REBIRTH

  • “Manufacturers Tie Ohio Plant Investments to Shale Gas Expansion”: U.S. Steel added 200 jobs at its Lorain Tubular Operations to provide seamless steel pipe for oil and gas producers, said Doug Matthews, vice president of U.S. Steel’s Tubular Operations. Prior to the recession, the company was trying to find a direction for the Lorain plant. At the time, most of the market for its seamless pipe had moved away and the facility wasn’t equipped to produce products for the energy industry, Matthews said. By 2010, the shale gas boom had begun in Ohio and U.S. Steel decided to invest in the Lorain facility to supply the industry’s growth in the region. Shale gas has also reduced input costs for U.S. Steel, which is a heavy consumer of natural gas, Matthews said. “It’s a catalyst for a revitalization of U.S. manufacturing,” he said. (IndustryWeek, 5/2/12)
  • Washington Post columnist David Ignatius: America is entering a new era of energy security. … Robin West, a friend who is chairman of PFC Energy, argues that, because of the rapid expansion of oil and gas production from shale, America is likely to become by 2020 the world’s No. 1 producer of oil, gas and biofuels — eclipsing even the energy superpowers, Russia and Saudi Arabia. West explains that the natural-gas boom will mean a dramatic change in energy imports and, thus, the security of U.S. energy supplies. … “This is the energy equivalent of the Berlin Wall coming down,” contends West. “Just as the trauma of the Cold War ended in Berlin, so the trauma of the 1973 oil embargo is ending now.” The geopolitical implications of this change are striking: “We will no longer rely on the Middle East, or compete with such nations as China or India for resources.” (Washington Post op-ed, 5/4/12)
  • Mark Williams, the Downstream Director of Royal Dutch Shell PLC: “Low prices for natural gas offers manufacturers a powerful competitive advantage.” (Dow Jones, 5/3/12)
  • “Cheap shale gas is giving American chemical companies a competitive edge over foreign rivals.” (The Economist, 5/4/12)
  • The Washington Post writes that responsibly expanding global market access to clean-burning American natural gas would “improve the country’s trade deficit, produce returns on domestic energy projects, increase state and federal tax revenue, support construction and maintenance jobs, [and] reduce the leverage of gas-rich international bullies such as Russia.” (Washington Post editorial, 5/6/12)

POWERING OUR TRANSPORTATION FUTURE

  • “Gassing up With Natural Gas Might be in NEPA’s Future”: Instead of going to the pump to gas up vehicles, people may soon be going to the “valve” to fill up on a different type of gas – compressed natural gas. … Even though the U.S. has the world’s largest natural gas reserve, it has less than half a percent of the world’s CNG vehicles. … The greatest benefit of CNG vehicles will come to large, high-mileage fleets such as bus systems, trucking firms and waste haulers. With the gallon equivalent of natural gas at about $2, half the price of gasoline and diesel, interest is at a high point.  … Ford offers a line of CNG-ready vehicles that can be taken to company-approved up-fitters and remain under warranty. The options are often less costly than CNG vehicles off the assembly line, said Cynthia Williams, Ford environmental policy manager. (Times-Tribune, 5/5/12)
  • “Getting Natural Gas-Powered Cars in Use”: “CNG we see as a long-term-viable fuel and we will continue to make our products capable to run on natural gas,” Cynthia Williams, Environmental Policy Manager for the Ford Motor Co. said. … “I think natural gas is definitely the way of the future,” Luzerne County Transportation Authority executive director Stanley Strelish said. (Times-Leader, 5/5/12)

TECHNOLOGICAL ADVANCEMENTS REDUCING ENVIRONMENTAL FOOTPRINT

  • “Removing Water Trucks From Road”: A pipeline designed to transport water directly to natural gas drilling sites in Lycoming County went into operation in early April. As of the end of that month, the pipeline reduced by about 2,000 the number of truck trips required to support drilling operations in the area, according to Karl Kyriss, president of project developer Aqua Capital Ventures LLC. … “Water trucks haul an average of 5,000 gallons. Our pumping rate at Jersey Shore is 500,000 gallons per day, so every day we’re pulling about 100 trucks off the road,” Kyriss said. (Williamsport Sun-Gazette, 5/7/12)
  • “This is an industry that is constantly evolving with technological innovation,” said Matt Pitzarella, Range’s Cecil-based spokesman. (Pittsburgh Tribune-Review, 5/5/12)
  • “Water Pipeline Supplies PA Shale Drill Sites, Eliminates 2,000 Truck Trips From Roadways”: A newly constructed private pipeline supplying fresh water to certain natural gas producers drilling in the Marcellus Shale in north-central Pennsylvania is now fully operational, according to an announcement from Aqua America Inc. (NYSE: WTR) and Penn Virginia Resource Partners, L.P. … In less than a month of operation, the pipeline has already eliminated more than 2,000 water truck trips over rural roadways. In addition, this project supported the creation of approximately 100 local jobs over the course of construction. (Water World, 4/30/12)

GENERATING MUCH-NEEDED REVENUES

  • Williamsport, Pa. “Tax Revenues up $487,000”: The city saw a $487,000 increase in business privilege and wage tax revenues between 2010 and 2011, according to the city finance committee that met Wednesday. “The revenue reflects increased economic development. Some of it is likely to be a result of increased activity directly or indirectly related to Marcellus Shale industries,” said City Councilman Jonathan Williamson, chairman of the city finance committee. (Williamsport Sun-Gazette, 5/3/12)