American Natural Gas: “The Golden Key” to Boosting Manufacturing

In an interview with Matthew Brouillette’s “Brews and Views” podcast that aired earlier this week, MSC’s Dave Spigelmyer emphasized that “natural gas is the golden key to bring manufacturing back to Pennsylvania.” Spigelmyer also spoke about the benefits of natural gas and highlighted major energy changes over the past decade.

Click HERE to listen to the podcast. Here’s a quick recap of the show:

AMERICAN ENERGY ABUNDANCE

“We’ve been hydraulic fracking or fracturing gas wells since the 1940s in Pennsylvania. Those were what we called conventional wells or vertically drilled wells. Again, at our peak we produced 180 billion cubic feet of natural gas in 2008, which supplied about a quarter of Pennsylvania’s demand. Today, the new technology, the unconventional wells, the major change in technology is the ability to turn a drill bit horizontally. It produces a far more amount of gas off a single well location than ever thought possible.”

“With the supplies of natural gas that we’ve discovered now through unconventional technology, the technology that I spoke about drilling horizontally, is opening up vast new supplies of natural gas that most of us never thought possible. And that’s, multi-generational. There are supplies of natural gas that will last us hundreds of years as a result of that technology.”

“In 2008, this country was 62 percent dependent on foreign sources of energy. Today, we’re on track in 2020 to be a net energy exporter.”

ENVIRONMENTAL BENEFITS

“We’re now burning natural gas and power generation and you don’t hear the story. We’ve reduced carbon dioxide emissions, we’ve reduced nitrogen oxide emissions, we’ve reduced sulfur dioxide emissions, volatile organic compound emissions and we’re going to meet the parameters of the Paris Accords without being part of the Paris Accord because we’re burning far more natural gas in our power generation systems than we ever thought possible. So, I would tell you that natural gas environmentally has been a winner.”

MODERN, EFFECTIVE REGULATIONS

“We’ve fought for more rigorous rules. We’ve paid for more inspections. Last year about 800 wells were drilled in Pennsylvania and there were 19,000+ inspections. There’s no other industry in the Commonwealth that’s under the same kind of regulations.

“I can tell you the coalition that I represent, we’ve fought for more rigorous rules in the Commonwealth, we’ve fought for more inspections, and we’ve paid for them. A natural gas drilling permit was $100 in 2008, it’s $5,000 today. There were 60 compliance and inspection staff on the oil and gas front in 2008, there’s now 190. So, we’ve paid for more inspectors, we’ve paid for more rigorous inspections, we’ve paid for more permit writers, for the folks that have rigor over the process for which we develop natural gas in the Commonwealth. And we’ve continued to work with the Department of Environmental Protection.”

“I think it’s fair to say that Pennsylvania has, if not the strongest, some of the strongest rules in relation to natural gas development that exist anywhere in the country and we’re a model for other states to look at.”

NATURAL GAS IMPACT TAX WORKS

“Under Governor Corbett, the industry came together with the Governor, who had taken a no tax pledge, and said our production is strong enough now that the industry should be paying a tax. We called it an impact tax, or an impact fee at the time. It has generated more revenue than all of the surrounding states that are producing natural gas. This year it generated $252 million, since 2012 nearly $1.7 billion.”

“We’ve seen a big benefit from a roads standpoint to communities, we’ve seen a benefit from a jobs perspective, and when you talk about jobs, let’s face it, jobs are the real engine that grows tax revenue. I would share with you that, this year, the $252 million generated in the impact fee in Pennsylvania has been game changing for county and local governments.”

GOV. WOLF’S SEVERANCE TAX PROPOSAL

“Governor Wolf wants one tax on top of another tax that would render many of the capital decisions in Pennsylvania uncompetitive with other shale plays. He makes the statement ‘well the gas is here, they have nowhere else to go.’ There’s’ nothing further from the truth and that runs 180 degrees opposite from general business practices. Capital flows to the path of least resistance. There’re states like North Dakota, like Texas, like Louisiana and Arkansas. There’re places abroad in Canada where shale development and the new technologies that we’re using in Pennsylvania to produce natural gas today are in those locations as well.”

“We’re competing for capital daily with those locations. If we lose the competitive balance to park capital here, those jobs, those investments go somewhere else.”

ENERGY INFRASTRUCTURE

“Pipelines are a vital piece of infrastructure and — the safest mode of transportation today are pipelines underground. Have there been some accidents? Certainly. Have there been incidents in building pipelines where mistakes have been made? Absolutely there have been. So, I would share with you one of the things our coalition has done is to take areas where our industry has not performed well and conduct training, conduct training with the Department of Environmental Protection, conduct training with various agencies to make sure we up our game on how we build and construct pipelines.”


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