Natural Gas: America’s Clean-Burning, Reliable Energy Source

Locally produced natural gas is a reliable and clean-burning energy source on track to gain the title of America’s most popular power-generating fuel. As more consumers, manufacturers, and power generators continue to rely on affordable natural gas supplies, it’s even more critical that Pennsylvania lawmakers get the energy equation right by encouraging continued natural gas production and use.

While Pennsylvania’s neighboring states are taking action to reduce or freeze their severance tax rates, some in Harrisburg are committed to raising energy taxes even higher and enacting duplicative, onerous regulations that will only make the Commonwealth less competitive for much needed, job-supporting capital investment.

Rather, as rig count reaches historic lows, lawmakers should focus on policies to develop more natural gas use opportunities, especially among our region’s manufacturers, as that will strengthen our state’s economy and help create good-paying jobs.

Here’s what they’re saying:

Clean-Burning Energy

  • Natural Gas on Pace to be America’s Most Popular Fuel Source: EIA believes natural gas will provide 33% of generation in 2016 … That would be the first time that natural gas beats coal on an annual basis. The EIA says natural gas and coal each contributed one-third of all electricity generation in 2015. (Fox Business, 3/17/16)
  • EIA: Natural Gas to Be Largest Source of Power Generation: Natural gas will power a larger share of electricity generation than coal this year in the U.S., the federal government predicted Tuesday. The latest short-term outlook from the EIA expects gas to fire 33.4 % of electricity this year. … Consumers will benefit from the switch this year, the EIA said. The average residential price of electricity is predicted to fall by 0.7 % in 2016, which would be the first annual decline since 2002, the agency said. (Tribune-Review, 3/8/16)
  • UPS Expands Fleet of Clean-Burning Natural Gas Trucks: UPS on Tuesday announced a $100 million plan to buy hundreds of new trucks that will run on compressed natural gasThe new program will fund 12 CNG fueling stations and add 380 CNG heavy duty trucks to the package delivery company’s fleet. … UPS has steadily been increasing its use of alternative fuel vehicles, which now make up 6% of its 100,000-vehicle global fleet. Tuesday’s announcement came after UPS made an even larger expansion of its CNG fleet, adding about 1,400 vehicles and 15 fueling stations in 2015. (Reuters, 3/15/16)
  • “Good News: GDP Growth is Getting Greener”: Global emissions of carbon dioxide from the energy sector were essentially flat for the second year in a row last year … Paris-based IEA said in a release that emissions of CO2 from the energy sector fell in both the U.S. and China… China’s CO2 emissions from energy sources fell 1.5%, while the U.S.’s fell 2%. … “The new figures confirm last year’s surprising but welcome news: we now have seen two straight years of greenhouse gas emissions decoupling from economic growth,” said IEA Executive Director Fatih Birol. … The decline in U.S. emissions was due more to cheaper natural gas replacing coal in the fuel mix of the electricity sector. (Fortune, 3/16/16)
  • “U.S Carbon Emissions Decline 2% as Natural Gas Use Expands”: Global energy-related CO2 emissions remained flat in 2015 for the second year in a row, in part on the rising use of natural gas, according to an analysis of preliminary data by the IEA. … “In the U.S., emissions declined by 2%, as a large switch from coal to natural gas use in electricity generation took place,” IEA noted. (Natural Gas Intelligence, 3/16/16)
  • “Methane Emissions Continue to Drop” as Natural Gas Production Increases: The scientific fact is that shale-related methane emissions continue to drop steadily as production increases and more clean-burning natural gas powers our economy. Thanks to the industry’s widespread commitment to best practices and continuous operational improvements, natural gas continues to be an environmental winner. According to the most recent Pa. DEP data, methane emissions have fallen 13%even as gas production increased 50 %year-over-year. (Times-Tribune letter, 3/16/16)

Couldn’t Be a Worse Time for Higher Energy Taxes

  • U.K. Cuts Tax on Oil and Gas Production During Market Downturn: The U.K. cut taxes on the North Sea oil and gas industry, as Chancellor of the Exchequer George Osborne seeks to ease the strain on producers squeezed by plunging prices. … Osborne’s move comes after the 60 % slump in Brent crude since mid-2014 made much of the production in the U.K.’s North Sea basin …. “We need to act now for the long term,” Osborne said in his annual budget speech, adding that the oil and gas industry employs “hundreds of thousands of people” across the country. (Bloomberg, 3/16/16)
  • Higher Taxes Jeopardize Pa. Jobs: All of these job-losing states are big producers of oil, natural gas and/or coal. … Pa., the No. 2 gas producer and No. 4 coal producer, isn’t doing great either. Job growth was an anemic 0.6 % for the 12 months ending in January, and the state has actually shed jobs lately. Employment has kept growing in the state’s big metropolitan areas so the troubles are elsewhere, probably in the vicinity of the coal mines and gas wells. (Bloomberg View, 3/16/16)
  • “New Taxes, Duplicative and Onerous Regulations Exacerbate Financial Challenges”: The ongoing debate surrounding natural gas-related issues in the Commonwealth is a classic example of this growing disconnect between political agendas and the facts. … Too many elected officials continue to obsess over levying additional energy taxes on natural gas, as well as imposing costly, duplicative and unnecessary regulations that provide little if any additional protections for our environment. These actions certainly don’t reflect the current market dynamics or ’s strong, nation-leading regulations, which the industry has worked to modernize… Pa., like other states, does tax natural gas – we just called it an impact fee. By April of this year, the impact fee will have generated more than $1 billion in new revenues – benefiting communities in every county across the commonwealth. … Further, Pa.’s impact fee is the equitant of a 5.5 % effective severance tax rate, which is higher than neighboring West Virginia and Ohio. (Evening-Sun op-ed, 3/18/16)

Read the most recent Marcellus Quarterly issue available HERE today.