What They’re Saying: Shale a “Rare Economic Bright Spot” for America

Safe, job-creating American shale development continues to be a win-win for Pennsylvanians, the economy and our environment. Lauded as both a “rare economic bright spot” and the “greatest environmental triumph of the century”, it’s no wonder there is widespread public support for this “once-in-a-generation opportunity.”

Yet, it’s important to note, that despite these benefits, there could not be a worse time for a massive, job-crushing energy tax hike on an industry – and it’s small business supply chain – struggling with persistently low commodity prices.

Here’s what they are saying:

GAS PRODUCTION UP, METHANE EMISSIONS DOWN

  • “Fracking Is Our Clean Power Plan”: As environmental groups gather to strategize maximum mileage from the president’s “Clean Power Plan,” they would do well to remember what they might regard as the greatest environmental triumph of this century: The U.S. already leads the world in carbon emissions reduction, with emissions down 26% since the shale boom hits its stride in 2007. … Natural gas has been key to reducing U.S. carbon emissions to their lowest levels since 1988, the U.S. Department of Energy recently announced. … With the shale boom, lower emissions and economic growth need not be at odds. … Our economic growth was largely the result of cheap fossil fuels. … Because of historic production through fracking, the U.S. was the top natural gas and petroleum producer on earth in 2014, and our energy costs have fallen. U.S. industrial electricity costs are now 30-50% lower than those of our foreign competitors, resulting in a manufacturing renaissance and the “reshoring” of perhaps millions of American jobs. (Forbes op-ed, 8/25/15)
  • WSJ Editorial: EPA Shows Rapidly Declining Methane Emissions: America’s natural gas boom has been a rare economic bright spot, and even Pres. Obama likes to take credit for it. But his Administration is waging a war of regulatory attrition to raise drilling costs and reduce its competitive advantage over wind and solar power. The latest effort came last week when the EPA issued its new rule to slash emissions of methane, a byproduct of oil and gas drilling. … Yet the EPA’s own research shows methane emissions from drilling have been declining rapidly. The EPA’s Greenhouse Gas Inventory acknowledged this year that methane emissions from natural gas production have fallen 35% since 2007. That’s despite a 22% increase in gas production over the same period. The EPA last year found that methane emissions from hydraulically fractured gas wells had fallen 73% from 2011 to 2013. Overall methane emissions are 17% lower than in 1990. … The new EPA rule will impose large new costs for little benefit. (Wall Street Journal editorial, 8/23/15)
  • Shale Producers Slashed Methane Emissions 38% since 2005: Obama’s proposal will raise heating costs, threaten jobs and make it difficult to move forward with the current natural gas boom. … By overregulating natural gas production, these unnecessary EPA regulations will raise costs, threaten jobs and make it difficult for us to move forward on a very promising resource, [said U.S. Sen. Joe Manchin]. … U.S. Sen. Shelley Moore Capito said natural gas producers have already taken steps to cut methane emissions by 38% since 2005 while increasing production through voluntary industry programs and innovations. “EPA’s own data shows that methane emissions from natural gas drilling have gone down significantly over the last decade despite the rapid rise in production.” (Bluefield Daily Telegraph editorial, 8/23/15)
  • “Shale-Related Methane Emissions Steeply Drop as Production Sharply Climbs”: “It cannot be lost on anyone that shale-related methane emissions continue to steeply drop as natural gas production sharply climbs,” said MSC president Dave Spigelmyer. “These positive results are a function of the industry’s widespread use of operational best practices and continuous investments aimed at protecting and enhancing our environment, especially air quality.” (Tribune-Review, 8/18/15)

GENERATIONAL OPPORTUNITY

  • Ed Rendell: Natural Gas Power Projects “Once in a Generation Opportunity”: This natural gas power plant is a once-in-a-generation opportunity to transform an isolated, vacant property in Jessup into a safe, productive engine of economic growth. … A brand new, state of the art plant like this will be a safe and productive part of the Jessup community for decades to come. … It undoubtedly is true that the project also will be great for the local economy. Its construction will take 30 months and will involve 600 union labor jobs. When fully operational it will require 30 operations and maintenance jobs starting at $27 per hour, with a total annual payroll of $4 million. Over the 40-year life of the project, the Borough of Jessup, Lackawanna County and the Valley View schools will receive more than $50 million in revenue, which could be used to lower local property taxes. (Times-Tribune op-ed, 8/25/15)
  • Affordable, American Natural Gas Benefits Consumers: Lower prices at the gasoline pump and in utility bills puts more money in everyone’s pocket, which boosts spending and the overall commerce. Considering the slow pace of America’s economic recovery, the market needs all the help it can get. … In the U.S., companies drilling for oil and exploring deep gas deposits, such as the Marcellus Shale in Pa., have made the country a new leader in production. While slipping prices have curbed some new exploration for wells, it has not changed the fact that record extraction has slashed dependency on imports. … In the meantime, U.S. drivers, homeowners and businesses should take advantage of the situation. (Post-Gazette editorial, 8/28/15)
  • “Energy Essential to Economic Activity”: The George C. Marshall Institute has recently released a study on fossil fuels and the economic well-being. … It describes why energy is an essential input to economic activity. Because fossil fuels are such a large part of the world’s energy supply, they play a dominant role in enabling people everywhere to enjoy a higher standard of living and greater personal freedom. Abundant and affordable energy enables an economy to produce more and grow. If fossil fuels were made more scarce and less affordable, trade and markets would shrink. … The study explains why abundant, inexpensive energy provides great advantages and is highly desirable and by implication why efforts to make fossil fuels more expensive and less available are detrimental to our economic wellbeing. (Houston Chronicle, 8/20/15)
  • Shale Supplies Positively Benefit Consumers: Expecting the competitive retail supply market to grow, state regulators on Thursday approved changes to natural gas utility customer bills that share more information about supply companies. … Regulators approved the changes to help bring customers to the market and also nod to the glut of natural gas due to prolific Marcellus Shale production that has brought down gas prices. The bill enhancements will “help customers develop a recognition of and relationship with” a supplier, said Commissioner Pamela Witmer. They’re also an “integral part of the Commonwealth’s realization of the full potential of the opportunities provided by the Marcellus Shale.” (Post-Gazette, 8/20/15)

CLEAN-BURNING POWER

  • “Compressed Natural Gas Is the Wave of the Future”: At the site of the former RC Cola factory in Bentleyville, trucks refuel with compressed natural gas. The refueling site is only the second CNG refueling station in Washington County, and the eighth across southwestern Pa.. … “With us sitting on top of the Marcellus and Utica reserves, a lot of our state vehicles will be converting over as soon as the infrastructure becomes available.” (Tribune-Review, 8/26/15)
  • Anheuser-Busch Cuts Emissions with CNG: By transitioning to CNG, Anheuser-Busch expects to reduce carbon dioxide emissions by 2,500 tons per year. … Approximately 30% of Anheuser-Busch’s heavy-haul dedicated tractors now run on cleaner-burning natural gas. “Transitioning our entire St. Louis tractor fleet to CNG-powered engines brings environmental benefits directly to our company and our community,” said James Sembrot. “A conversion of this scale is indicative of the commitment we’ve made to deploying more sustainable technologies and processes at each stage of the brewing process.” … Through advanced engine technologies, the company anticipates a 23% reduction in greenhouse gases … the equivalent of taking approximately 526 passenger vehicles off the road. (Release, 8/25/15)
  • Louis Brewery Switches Fleet to “Clean-Burning” CNG: Anheuser-Busch’s St. Louis brewery is replacing all 97 diesel-fueled tractors in its trucking fleet with new tractors that run on CNG, looking to cut carbon emissions. … The switch is expected to reduce CO2 emissions by 2,500 tons per year. Anheuser-Busch expects a 23% reduction in greenhouse gases with the CNG-powered vehicles. … This is the largest of two fleets the brewery has converted to CNG. The brewery’s Houston fleet of 66 diesel tractors was converted in Sept. 2014. About 30% of Anheuser-Busch’s U.S. heavy-haul dedicated truck fleet is now running on natural gas. The conversion to CNG is part of the company’s global efforts to reduce logistics-related carbon emissions by 15% through 2017. (St. Louis Business Journal, 8/25/15)

LOCAL BENEFITS THREATENED BY HIGHER ENERGY TAXES

  • “Severance Tax Will Hurt Pa. Economy, Threaten Growth”: Those of us who live and work in Pa.’s gas producing region know that the economic ripple effect of the natural gas industry is very real. … The natural gas industry has not only fueled our economy, but a sense of optimism. … Young people are finding jobs. Families are building homes. There are new hotels, restaurants, retail stores and small businesses cropping up and keeping busy. … Family farms have been secured for the next generation and small businesses like my own home building company are finding new customers. … Unfortunately, Gov. Wolf doesn’t see it this way. Included in his budget are a severance tax and other new taxes on the natural gas industry that threaten our recent growth. … If passed, the severance tax is a sure way to take away Pa.’s current competitive edge. What the proponents of the new severance tax package don’t want to admit is that the gas industry is already taxed heavily. … Gov. Wolf and other severance tax supporters should be thinking less about how they can support more government spending and more about how they can nurture the state’s economic future long-term by helping industries like the gas industry thrive and grow. (Pocono Record op-ed, 8/27/15)
  • Higher Energy Taxes Harms Pennsylvanians: Gov. Wolf proposed a new severance tax on natural gas, which he claims will generate more than $1 billion annually for public schools. The proposal fails to consider the energy tax’s impact on employment and utility prices. Moreover, it fails to account for what gas drillers already pay in taxes, fees, and royalties to landowners. … The gas industry is already pulling out of Pa. due to low gas prices and better opportunities elsewhere. Energy companies have laid off thousands of Pennsylvanians and cut back investment. … The severance tax would drive away more investment, resulting in 4,138 fewer private sector jobs in 2017. Low and middle income families in Pa.—those earning less than $100,000—will pay $180 million more in utility bills due to the severance tax, according to the Independent Fiscal Office. … The IFO estimates Pa. drillers pay an effective 4.7% tax rate on natural gas through the state’s impact fee. Gov. Wolf’s severance tax proposal and price floor, under current market conditions, is equivalent to a 17% tax, far above any other state’s severance tax. … Of states that collect more than $200 million in severance taxes, three have no individual income tax, two have no corporate income tax, five have no death tax, and two have no sales tax. … If lawmakers want Pa.’s tax rate to reflect other energy producing states, they should cut or eliminate other state taxes. (Commonwealth Foundation, 8/24/15)
  • Pa.’s Energy Revolution a Blessing for Families, Communities: For countless families and communities throughout all corners of the commonwealth, Pa.’s energy revolution has been a blessing. In fact, the current impact tax has generated nearly $830 million in just a few years, sending drilling tax revenues to each and every county for important economic and infrastructure development as well as environmental enhancement projects. The natural gas industry is also creating good jobs that pay family-supporting wages. … Yet, these middle-class and environmental benefits are at risk by calls for even higher energy taxes. … If this “highest-in-the-nation” energy tax is rammed through Harrisburg, we’ll see job loss and consumers and families bearing the tax’s cost. We need to do what’s best for our current and future generations. But even higher energy taxes are a blueprint for job loss and squandered opportunities. (Pottstown Mercury letter, 8/20/15)

Become a United Shale Advocate today and join the thousands of fellow Pennsylvanians strongly urging Harrisburg to focus on creating jobs, not higher energy taxes.