We Agree: Using Locally-Produced “Natural Gas to Fuel Our Railroad is Cool”

Following the recent release of an IHS study highlighting the fact that shale is breathing an “economic second life” into Marcus Hook, a new Pa. Public Utilities Commission report finds that Philadelphia Gas Works (PGW) has already saved nearly $8 million by increasing its use of locally-produced natural gas. The report also noted that the utility could generate an additional $7 million annually by utilizing even more clean-burning natural gas produced in the Commonwealth.

Beyond generating consumer energy savings, natural gas is also benefitting Philadelphia’s mass transit system. SEPTA is looking to locally-produced natural gas for cost savings and to make the system more “environmentally friendly” by utilizing natural gas powered electricity.

And as MSC president David Spigelmyer made clear during a recent radio appearance on WSBA-AM:

“We’re entering winter with natural gas prices half of what they were just seven years ago, so from a consumer standpoint, that’s a wonderful thing. It also provides an enormous opportunity for manufacturing growth in Pennsylvania. Now we have the opportunity through affordable natural gas to revitalize manufacturing across the Commonwealth. … The big benefit is growing demand to rebuild manufacturing in Pennsylvania. Every consumer product we touch today is manufactured through the use of natural gas.”

But even higher energy taxes threaten shale’s economic and environmental benefits and will cost good-paying local jobs. As the MSC writes in today’s Scranton Times-Tribune, it’s critical that leaders in Harrisburg focus on solutions aimed at expanding natural gas use rather even higher energy taxes:

“Shale presents a historic opportunity for our economy, manufacturers, small businesses and consumers. We agree that Pennsylvania needs more revenue, but raising energy taxes — especially under depressed market conditions — would drive investment away, resulting in fewer local jobs and less overall revenue. Given current market realities, there couldn’t be a worse time for higher energy taxes. Policy makers should focus on solutions aimed at expanding natural gas use — especially for manufacturing — which will encourage job creation, drive new long-term investments and generate more revenue for the commonwealth.”

Here’s what else they’re saying:

  • Using “Natural Gas to Fuel Our Railroad is Cool”: The SEPTA board decided Thursday to make the regional transit network more environmentally friendly with plans that are budget friendly, too. … The board approved the plan Thursday, along with a resolution to explore the possibility of installing a natural gas power plant near the Midvale bus garage that has the potential to provide 50 to 60% of the power needs for that facility and portions of SEPTA’s network. ….  “To use natural gas to fuel our railroad is cool,” said SEPTA General Manager. (Philadelphia Inquirer, 10/23/15)
  • Natural Gas Power Plant to Make SEPTA Energy “Self-Sufficient”: SEPTA has proposed a new natural gas power plant to generate energy for part of its regional rail system. The combined heat and power plant will be built in North Philadelphia and serve regional rail lines, as well as a large bus depot. … The planned gas plant would provide base level power, and use the excess heat generated for three nearby facilities. The plant would also help make the transit agency self-sufficient in case of power outages. (StateImpact, 10/23/15)
  • Locally-Produced Natural Gas Generates ~$8M in Savings: PGW could save as much as $9.4 million a year, mostly by switching more of its natural gas supplies from the Gulf Coast to less expensive Pennsylvania producers, according to a state audit released Thursday. The audit, commissioned by PUC, said PGW could save $6 million to $7 million a year by buying 60% of its gas from the Marcellus Shale region, up from 33% last year. … Since 2009, Pennsylvania has become the nation’s second-largest gas producer because of the growth of hydraulic fracturing of shale formations. PGW’s shift of one-third of its supply to Marcellus gas already has generated $7.9 million in savings, the auditors said. While the utility should maintain a diverse gas supply, the auditors said PGW could generate an additional $7 million in savings by buying 60% of its gas from producers in the region. (Philadelphia Inquirer, 10/23/15)

As MSC’s Spigelmyer said on Gary Sutton’s radio program, shale is generating game-changing benefits for our region’s consumers and manufacturers. But those benefits are threatened by even higher energy taxes that’ll “cost us deeply in the area of jobs and opportunity for Pennsylvania.”

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