A New Year for American Energy

What do local communities, the environment, national security and trade unions have in common? They are all thriving thanks to increased production of American natural gas.

Yet there couldn’t be a worse time for higher energy taxes on an industry struggling with historically low commodity prices. The fact remains that shale’s supply chain – as well as consumers, small businesses and regional manufacturers – will shoulder the financial burden of even higher energy taxes.

Here’s what they’re saying about local natural gas benefits, which the Pa. State Association of Township Supervisors recently called a “godsend” for local communities:

STRENGTHENS COMMUNITIES, CREATES JOBS

  • “Townships Rewrite Their Future” with Shale Impact Tax: To say that Pa.’s natural gas impact fee is making a difference would be an understatement. Once cash-strapped townships — some of which are receiving annual payments in excess of $900,000 — are back on their feet after years of financial struggles and investing in projects that were unthinkable before Act 13. … As one township secretary puts it: “Act 13 changed everything.” Shale’s has given their regions an economic boost that has meant higher-paying jobs, along with business growth and development — benefits that were unheard of before the industry’s arrival. Still, local leaders worry that the one thing that has helped them survive the industry’s onslaught, Pa.’s four-year-old natural gas impact fee, will be snatched away and replaced with something far less useful: a severance tax promised last year on the campaign trail to increase spending on education and replenish state coffers. (Pa. Township News, 1/1/16)
  • “Fracking Saves the Day”: The main contributor to this downward trend in energy prices was the advent of fracking in North America. … Over the past five years, the U.S. was by far the largest contributor to the increase in global energy supplies. … American consumers are saving an estimated $750 annually per family on gasoline costs alone.  Add to this savings from home heating (an additional $750), electricity, other forms of transportation, and consumer goods dependent on shipping, and those saving add up to more than $2,000 per family. … What is undeniable is that the world’s economy has benefited from low energy prices – and that low prices are the result in large part of North American fracking. (American Thinker, 1/4/16)
  • Local Labor Leader: Pipelines Deliver Energy, Union Jobs: By employing thousands of Pennsylvanians to safely deliver energy to our communities, pipeline projects will have a lasting impact on our state’s economy. Furthermore, the quality of life enjoyed by residents will be preserved as pipelines represent the safest, most efficient way to transport energy. Utilizing local trades on pipeline infrastructure ensures that the most qualified and best trained professionals are hired for the work. We live in the communities that these pipelines will serve, and we take great pride in knowing that our work will meet and exceed state and federal regulation safety requirements. … Pipelines have the potential to improve the quality of life for residents across the commonwealth for generations to come. (Post-Gazette letter, 12/31/16)
  • Local Vets Utilize Experience for Energy Careers: Today, when [first name?] Bowman goes to work at Range, he’s in logistics again, helping to ensure that water trucks arrive on time at natural gas drilling sites. Bowman said his time in the service…is a plus for the work he does now. … Bowman and co-worker Daniel Waters, a safety specialist at Range and a veteran of both Iraq and Afghanistan, exemplify the adaptability of some veterans to certain types of work in civilian life. … “Whenever I came back from the military in 2009, I had no idea I’d be working in my backyard.” … Both men described another parallel between their military experience and the work they do at Range: learning from others who have been on the job longer. … “There are a lot of vets in oil and gas. … On my first day here I met a half dozen people who were veterans.” (Observer-Reporter, 12/13/15)

CLEAN-BURNING, AFFORDABLE POWER

  • “Americans Can Look to Another Year of Low Energy Costs”: In 2016 Americans will continue to reap the windfall from energy prices that will remain well below their historic highs. … Yet experts say the explosion in U.S. oil and gas production will continue to redefine the global energy market for years to come. … And when it comes to heating their homes, American consumers will benefit. … The half of U.S. households that rely on natural gas to stay warm will spend on average 13% less this winter. … “In the last four years, we have gone through an absolute revolution when it comes to energy,” said Peter Kenny, independent market strategist. “This is the biggest game change since the formation of OPEC, and it isn’t a short-term change … American shale producers fired the first shot, and it destabilized the global pricing structure … Those years of exorbitant prices paid by U.S. consumers have effectively come to an end.” (CBS News, 1/4/16)
  • PUC Commissioner: Pa.’s Promising Energy Outlook: When it comes to energy, 2015 has been a good year for Pa. – and the future looks just as promising. … Sitting atop the Marcellus Shale – one of the most abundant and lucrative shale reserves in the nation — has offered us numerous benefits. Lower energy prices [not] only for natural gas customers but also for electric customers. Prolific, efficient production has contributed to natural gas prices that are 38% lower than they were one year ago, and electricity prices are declining. PPL Electric Utilities’ Price-to-Compare dropped 17% Dec. 1, attributed to dropping wholesale prices, due to lower gas prices. … We are using 20 times more gas to generate electricity in Pa. compared with 15 years ago. Natural gas is a much cleaner-burning fuel, and carbon dioxide emissions within the electric grid serving Pa., New Jersey, and Maryland have steadily declined – down by about 23% since 2005. … Natural gas has been a game-changer for Pa., but for more residents and businesses to be able to take advantage of this clean-burning resource, we need more pipeline infrastructure. (Phila. Inq. column, 1/3/16)
  • Fracking Massively Reduces U.S. CO2 Emissions: Fracking, not government green policies, caused carbon dioxide emissions to drop sharply in 47 states and Washington, D.C. in 2015, according to both Scientific American and EIA. Total U.S. GHG emissions have dropped by 1,022 million tons, making them significantly lower than their peak in 2007. Studies show that fracking for natural gas is responsible for almost 20% of the drop in carbon dioxide emissions, while solar power is responsible for a mere 1% of the decline. For every ton of carbon dioxide cut by solar power, fracking cuts 13 tons. … The S. has reduced greenhouse gas emissions more than any other country. (Daily Caller, 12/31/15)
  • Natural Gas Improves Our Environment: We all want to breathe clean air and we all want to drink fresh water. It’s called responsible energy development. … My life-long mission is to provide this wonderful country with affordable, abundant energy. While I’m doing this giving back to the environment is key. The energy industry is known for land reclamation and has perfected this to a tee after countless responsibly-engineered pipeline and drilling projects. In fact, the environmentalists should be thanking the modern shale revolution for doing two things: driving down the prices at the gas pumps substantially and also reducing carbon emissions. (The Almanac letter, 12/31/15)
  • Consumers Benefit From Natural Gas: Dominion East Ohio expects increased energy production from the Marcellus and Utica shale formations in Ohio and nearby states to help provide ample supplies of natural gas at lower prices than a year ago. “These abundant shale energy resources have led to lower national and regional market prices and our customers are reaping the benefits,” said Jeff Murphy. … Under the current rate, the average SCO residential customer’s bill for the month of December 2015 would be $66.12, almost 40% less than $109.92 in December 2014 and dramatically less than the average SCO residential customer’s December 2010 bill of $151. … “Even though demand continues to grow, as more natural gas is used for electric generation and our economy continues to recover, increased regional production has resulted in lower market prices.” (Dominion release, 12/28/15)
  • Texas A&M Prof.: CNG to Power 40% of Vehicles by 2025: “By 2025, 40% of you will be driving vehicles powered by compressed natural gas,” said Detief Hallermann, Ph.D., Texas A&M University. There has been a huge increase in natural gas finds in the U.S. with the volume of natural gas being discovered in conjunction with new petroleum drilling, the S. has gone from a net importer of compressed natural gas to being a big exporter. As some point, the U.S. will be in a position to use much of that natural gas domestically, and that includes new manufacturing, heating and cooling and vehicles. … In 2008, the U.S. was a net importer of propane/compressed natural gas, but as of 2015, the U.S. was exporting six times what it was importing seven years earlier. (Ag Professional, 1/4/16)

UNPRECEDENTED PRODUCTION

  • Efficiency Improvements Drive Marcellus Production Growth: Domestic shale’s shining star over the past four years has been the Marcellus and Utica shales, which federal data released Tuesday said was responsible for 85% of U.S. production growth since 2012. Natural gas production in the Marcellus Shale, which encompasses much of Pa., jumped from 6.3 Bcf/day in January 2012 to 16.5 Bcf/day in July 2015, according to U.S. EIA. … EIA said the increases are due to “ongoing improvements in precision and efficiency of horizontal drilling and hydraulic fracturing.” (Pittsburgh Business Times, 12/29/15)
  • America’s First Shale Gas Export Terminal Starts Production: Cheniere Energy began production at what will become the first terminal to export natural gas from America’s shale formations. … The start at Sabine Pass paves the way for other planned LNG terminals that are projected to turn the U.S. into one of the world’s largest suppliers. The country may be capable of exporting 76 Bcf/day by 2019. …While the U.S. has been sending gas abroad from Alaska for years, Cheniere’s cargo would mark the first to leave from the lower-48 states, a testament to surging shale supplies that have sent domestic stockpiles to record levels. … Cheniere’s export terminal underscores how dramatically the shale boom has reshaped the natural gas market. Before drillers started pulling the fuel out of tight-rock formations, Cheniere was building import terminals in anticipation of a domestic shortage. Following the onslaught of shale gas, Cheniere started retrofitting terminals for exports. (Bloomberg, 12/31/15)
  • Marcellus, Utica Provide 85% of U.S. Shale Gas Production Growth: The productivity of natural gas wells in the Marcellus and Utica is steadily increasing because of ongoing improvements in precision and efficiency of horizontal drilling and hydraulic fracturing. Since January 2012, natural gas production in the Marcellus and Utica regions has accounted for 85% of the increase in natural gas production and has driven recent growth in total U.S. natural gas production. (U.S. EIA, 12/29/15)

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