What They’re Saying About Clean-Burning American Natural Gas

In his State of the Union Address last week, President Obama reiterated the clear fact that “America is number one in oil and gas” production, which is helping to drive our nation’s economic recovery. This important and shared energy progress is leading to a stronger nation, a more robust economy, and a brighter future for all. And increasingly, the not-so-secret “secret weapon behind this profound, generational opportunity is our ability to safely produce shale resources.

Here is what they are saying about America’s energy revolution:

BROAD BASED LOCAL BENEFITS

  • “Shale Drillers Have Helped Lead the Nation’s Economic Renaissance”: Although facing headwinds today from low prices, shale drillers have helped lead the nation’s economic renaissance. Gas drilling jobs and wages have soared in Western Pennsylvania. … The number of workers directly involved in oil and gas drilling in Pennsylvania, including petroleum engineers, has risen steadily since 2010, according to the state Department of Labor and Industry. Salaries have increased 40.5 percent to $102,388 over that same period. … Demand for these skills is expected to continue growing. (Pittsburgh Tribune-Review, 1/25/15)
  • “Pennsylvanians Have Not Felt This Degree of Economic Stimulation Since World War II”: Especially important to the long-term well-being of Pennsylvanians is building a workforce that advances safe, economical shale-gas production and encourages local manufacture of goods the industry needs. The IHS Economics consulting firm projects that private spending on support activities for oil and gas operations in Pennsylvania will grow from $4.4 billion in 2012 to $11.4 billion in 2025. … Well-drilling expenditures will expand from $1.7 billion in 2012 to $4.8 billion in 2025. Perhaps the best news is that spending on shale-related steel production and fabrication of products from steel stands to grow from $1.5 billion to $2.1 billion. Pennsylvanians have not felt this degree of economic stimulation since World War II. … IHS projects that Pennsylvania state and local tax revenues from shale-gas workers will grow from $844 million in 2012 to $1.65 billion in 2025, a 5.3% compound annual growth rate, and that supply-chain labor income will grow 3.8% during the same period. … The IMF thinks S. shale-gas production will generate $1 trillion over 40 years. Pennsylvania sits in the center of the largest known U.S. shale-gas field. … This opportunity to benefit Pennsylvania citizens dwarfs any other. (Pittsburgh Post-Gazette op-ed, 1/25/15)
  • to be a Leader in Natural Gas Supply for Generations: “Today we’ll produce 16 bcf a day…20 percent of America’s natural gas supplies. … Pennsylvania has quickly become a leader in natural gas supply for the U.S. … Frankly, it’s a huge opportunity for us to focus on building demand here,” [MSC president Dave Spigelmyer] said. … “It’s rewarding that we’re going into the winter of 2014-15 with natural gas prices half of where they were in 2008,” Spigelmyer said. “Consumers across Pennsylvania and our country are enjoying much more affordable energy as a result of shale being developed broadly. … That’s also creating enormous opportunities for manufacturing.” … But, he added, the industry faces challenges in the commonwealth. … “The impact fees today have already given skin in the game to nearly every municipality around Pennsylvania where shale has been developed,” he said. Indiana County and its municipalities have received about $2.3 million in impact fee money. “Everyone’s talking about…a need to do a severance tax…I would tell you that we need to get that competitive equation right.” … “I think it’s fair to say that Pennsylvania is going to be a leader in natural gas supply for generations to come, not just decades to come.” (Indiana Gazette, 1/23/15)
  • Local Construction Industry Improving, Driven by Energy: Expect 2015 and 2016 to be break-out years for the region’s construction industry, driven by an improving commercial market, underlying strength in the local energy industry and favorable demographic trends, according to Jeff Burd, publisher of the local construction trade publication Breaking Ground. … A return to industry growth has been a long time coming for Pittsburgh-area construction companies, Burd pointed out. “We’ve really had no rebound since 2009,” said Burd. Yet after more than five years of lagging activity, Burd sees a need for a 25% to 30% increase in space between now and 2020. (Pittsburgh Business Times, 1/22/15)
  • Natural Gas Impact Fee Taxes Open the Door to Tax Decrease: With a bid for Elk County Commissioner likely taking shape, St. Marys Mayor Bob Howard on Tuesday addressed sitting commissioners in what read at times like an informal debate and ultimately amounted to a challenge of county-level financial priorities. Howard, reportedly acting on behalf of the county mayors’ association, pushed the commissioners to consider a tax decrease, citing projected growth in natural gas drilling and associated fees. The mayor said the fees collected on Marcellus Shale gas wells drilled in the county are expected to rise eight-fold in the coming years, as Seneca Resources Corp., a Houston-based driller and the county’s largest mineral rights owner, ramps up production here. … A resulting crop of Marcellus Shale well sites has earned Elk County and its municipalities millions of impact fee dollars in recent years, something Howard mentioned Tuesday in advocating for a county-level tax decrease. (Bradford Era, 1/21/15)

GENERATIONAL OPPORTUNITY

  • Yergin: America the World’s No.1 Natural Gas Producer: By leaving oil prices to the market, Saudi Arabia and the emirates also passed the responsibility as de facto swing producer to a country that hardly expected it — the United States. … Quietly, though, an unconventional oil and gas revolution was beginning to pick up speed in the U.S. It yoked together two technologies: hydraulic fracturing and horizontal drilling. The impact was measured first in the rapidly growing production of shale gas, which now makes up about half of total American gas. This “shale gale” catapulted the U.S. ahead of Russia to become the world’s No. 1 gas producer. … The chimera of “energy independence” began to look more tangible, at least for North America. This revolution also turned out to be a big boost for the American economy, creating jobs, improving the country’s competitive position and drawing in over a $100 billion of new investment. (New York Times op-ed, 1/26/14)
  • Affordable Natural Gas Offers Big Consumer Benefits: “Natural gas has gone from scarcity to long-term abundance,” said ANGA’s Paul Hartman. … Mr. Hartman said if the U.S. doesn’t enter the global LNG market it will be lost to other countries. Exporting natural gas, he said, would have only marginal impact on the price people pay for natural gas to heat their homes. … Dan Adamo, UGI’s director of marketing programs and strategy said the company has helped convert about 45,000 homes in its service area, which allows customers to save as much as $1,000 a year. … Utilities, such as UGI, used to pay to pipe gas 1,800 miles. Now more than 70% of its customers’ needs comes from the Marcellus and Utica shale. John Augustine of the MSC said the gas-containing formation that lies under several states yields enough power to heat half the gas-heated homes in the U.S. (Citizen’s Voice, 1/23/15)
  • The U.S. Oil & Gas Sector: Delivering Economic Growth: Between 2002 and 2013, oil and gas extraction tripled its share of economy-wide value-added from 0.6% to 1.7%. No other industry grew anywhere near as fast or increased its share of economy-wide value-added as much. By 2013, the value-added of the oil and gas extraction sector was among the highest in the nation, according to BEA data. Oil and gas producers accounted for a higher share of value-added than the makers of computers and electronic equipment, or manufacturers of automobiles, locomotives and planes. Between 2002 and 2013, the number of full-time equivalent (FTE) jobs in oil and gas extraction increased by approximately 75,000, or 60%. But another 220,000 full-time equivalent jobs were created in the support sector, an increase of 27%. For private industry as a whole, an extra 2 million FTE jobs were created over the period, an increase of just 4%. Oil and gas extraction therefore accounted for 7% of all jobs created in the economy between 2002 and 2013. And oil and gas-related jobs are also among the best-paying in the entire economy, according to the BEA. Average wages and salaries per FTE for oil and gas extraction ($157,275) were almost three times the private sector average ($55,424) in 2013. Average wages and salaries in the support sector ($85,432) were also well above the national average. (Reuters, 1/21/15)

NEW ENERGY TAXES THREATEN JOBS, EXPANDED OPPORTUNITIES

  • “Support for a Severance Tax Ignores Shale Gas Market Realities”: A recent column offers a false narrative about basic economic realities associated with new energy taxes, capital investment and continued job growth.  … To suggest that new energy taxes “would actually increase the size of the ‘golden egg’ benefiting Pennsylvanians” is detached from reality. Let’s be clear: New energy taxes — which support thousands of good-paying jobs, many across our region’s building trades — would deter investment and jeopardize jobs as well as the broad-based benefits tied to shale. Top labor union leaders agree. Sean McGarvey, president of North America’s Building Trades Unions — representing 3 million skilled craft professionals — has urged Pennsylvania lawmakers “to make sure that they don’t kill this industry before it has the chance to make the largest impact,” adding: “I wouldn’t want to be on the wrong side of history.” … Common-sense policies that encourage investment in Pennsylvania will be crucial to maximizing shale’s shared benefits — more jobs, lower consumer energy costs, cleaner air and a regional manufacturing rebirth that could pay dividends for generations. (Pittsburgh Post-Gazette letter, 1/25/15)
  • New Energy Taxes Would “Stall Growth and Progress”: Tom Wolf has said he will use proceeds from a new natural gas extraction tax to pay for education, infrastructure and to alleviate a budget shortfall. The great irony is that Wolf’s new tax targets the very sector of the economy that has fueled a renaissance in manufacturing, economic security for workers and families, and revitalized communities. … According to the Pennsylvania Department of Labor and Industry, 240,000 Pennsylvanians work in jobs related to development of the Marcellus shale. The local natural gas boom has meant jobs for more than construction workers, engineers, geologists and mechanics. Drive down Main Street in Washington, Pa., or Williamsport and you will see “now hiring” signs in front of local restaurants, small businesses, safety equipment manufacturers and steel mills. The new extraction tax threatens this economic renaissance. … Wolf claims that the natural gas sector has not paid its fair share. But the reality is that Pennsylvania’s Public Utility Commission collected more than $632 million in Marcellus shale impact fees between 2011 and 2013. The amount has increased in each of the past three years. Proceeds, which are distributed to counties and municipalities, have been used to improve infrastructure, invest in workforce development and improve quality of life. … Instead of directing proceeds to counties and municipalities and designating them for local use, Wolf’s new extraction tax would dump them into the general fund and let Harrisburg decide where the funding goes. (Pittsburgh Tribune Review op-ed, 1/22/15)
  • New “Job-Crushing Taxes” Will Hurt Pa. Communities: Tom Wolf’s pledge to add a severance tax on energy producers is irresponsible and does not take into account the downside for most Pennsylvanians and the communities where they live. His potential job-crushing energy tax on shale development would harm Pennsylvania’s economy, cost jobs and shortchange the potential benefits for the long-term success of our state. New and higher energy-tax advocates wrongly assume that capital investments being made by the natural gas industry won’t be impacted by such a tax. … Currently, Pennsylvania — which is one of the highest-taxed and challenging business-climate states — is the only state that imposes an impact tax of 3.1% (based on actual sales into the pipeline delivery system) on the industry. The impact tax has generated more than $630 million over the past three years, overwhelmingly benefiting local communities across the commonwealth. Additionally, more than $2.1 billion in other shale-related taxes have been generated across the commonwealth. It’s no wonder that a top Pennsylvania State Association of Township Supervisors official recently stated that local communities “will lose out immensely” if a new energy tax is enacted. … As energy producers decide to shift capital to more competitive shale plays, it is the local supply-chain companies, typically family-owned small businesses, labor union workforce and communities that are at most risk. (Gas and Oil Magazine, 1/9/15)

POWERING TRANSPORTATION

  • Clean-Burning Natural Gas the “Fuel of the Future”: “With Pennsylvania now a leading natural gas producer, this project creates opportunities for transit providers and the public to have better access to this fuel for vehicle operations,” said PennDOT Secretary Barry J. Schoch. “This project will help the people of Pennsylvania realize the benefits this resource is delivering.” In 2013, Pennsylvania became the second-largest natural gas producing state. The abundance of low-cost natural gas has driven down electric and natural gas prices about 40 percent since 2008, Kirkpatrick said. After importing 75 percent of its natural gas just five years ago, Pennsylvania has become a net exporter of gas for the first time in more than 100 years. … “PennDOT’s plan to use the abundant natural gas produced in the region as a transportation fuel completes a cycle of economic benefit for the people of Pennsylvania,” he said. “PennDOT Secretary Barry J. Schoch has shown exemplary leadership in seeking a partnership which will reduce fuel costs for the department while generating revenue for future capital projects through natural gas sales.” (The Intelligencer, 1/26/15)
  • The “Incredible Benefits of Natural Gas”: As more public vehicles make the conversion to compressed natural gas in the county, the need for more fueling stations is growing. A planned CNG fueling station to be constructed at the the Centre Co. Recycling and Refuse Authority got a funding boost Thursday, according to state Rep. Kerry Benninghoff and Sen. Jake Corman.  … “This project will combine public funds with private investment to create an energy asset in our area,” Benninghoff said. Recycling and Refuse Authority Executive Director Ted Onufrak said the authority has one collection vehicle that runs on CNG. Several borough vehicles already use the compressed fuel, and a Centre Region trash and recycling contract will require all vehicles to run on CNG in the near future. … “We’ve seen the incredible benefits of using natural gas,” Benninghoff said, “including cleaner air, lower home heating costs, and now residents will also benefit from lower costs at the pump.” (Centre Daily Times, 1/17/15)
  • “Cleaner, Cheaper” CNG Powers Local Fleets: A new alternative fuel station could be coming to the Lehigh Valley. … If approved, a $1.8 million compressed-natural gas station at 5137 Lower Mud Run Road will refuel both trucks from a local flour mill and passenger vehicles owned by the general public. The move will allow W.W. Transport to convert 30 of its 45 vehicles to natural gas. Natural gas is cheaper and the company expects to save $696,000 annually. The locally-produced fuel is also cleaner, and W.W. Transport could also cut carbon dioxide emissions by as much as 1,270 tons, according to Tony Bandiero, executive director of the Eastern Pa. Alliance for Clean Transportation. (Morning Call, 1/20/15)

Are you a shale advocate? Visit UnitedShaleAdvocates.com to learn more about supporting safe, job-creating shale development.