Reaping the Rewards of Fracked Natural Gas

Energy Independence. It’s no pipe dream. The U.S. recently surpassed Russia and Saudi Arabia as the world’s top producer of petroleum and natural gas.

As a result, the U.S. Energy Information Agency (EIA) says U.S. oil imports will drop 20% by 2025. As oil imports fall, the U.S. is not only finally realizing the long-elusive goal of energy independence, it is also re-establishing itself as a world leader.

“The production gushing from America’s shale oil and gas deposits…doesn’t just promise the long-elusive goal of energy independence,” says Arthur Herman, a senior fellow at Hudson Institute. “It points to an energy dominance and economic power that the United States hasn’t seen for 100 years, since the heyday of John D. Rockefeller and Standard Oil.”

The Marcellus natural gas basin in Pennsylvania is the second largest natural gas supply basin in the world. In 2014 the Marcellus produced about 16 billion cubic feet of natural gas a day, accounting for about 38 percent of total U.S. production. By 2020, that share is expected to grow to 64 percent.

This incredible pace of development has pumped tens of billions of dollars into the Keystone State’s economy, creating more than 245,000 new direct and indirect jobs and saving state and local governments $19 billion in 2012-2013.

Although soaring gas development has helped the price of natural gas fall to historic lows in some regions of the U.S., a lack of sufficient underground pipeline infrastructure has prevented many consumers from taking full advantage of the country’s cheap energy supply.

williams1Matt Henderson, of Penn State’s Marcellus Center for Outreach and Research, told NPR’s State Impact that more than $10 billion in pipeline projects have already been announced for Pennsylvania to connect the glut of natural gas production with markets who desperately want access to abundant, inexpensive supply.

“Production has outpaced anybody’s wildest expectations,” he says. “The operators were found in a position where, ‘We need to get this out.’ So there’s a sense of urgency.”

Frank Ferazzi is general manager of the Transco pipeline, the largest volume pipeline system in the country delivering about 10 percent of the nation’s natural gas. He says that there currently isn’t enough existing pipeline infrastructure to move the full volume of natural gas being produced in the Marcellus.

“There’s a lot of natural gas being produced in Pennsylvania right now, but the state doesn’t have the necessary pipeline capacity to deliver all of that gas to market,” says Ferazzi. “The infrastructure in place is essentially the same network of interstate pipelines that was in place before the shale boom began.”

One proposal designed to address the need to add critical pipeline infrastructure is a proposed expansion of the Transco pipeline known as the Atlantic Sunrise expansion. It would include the construction of about 180 miles of new pipe in eastern Pennsylvania, directly connecting the existing Transco interstate pipeline with Marcellus production in the northern part of the state. Once complete, the project will connect natural gas consumers throughout the Mid-Atlantic and southeastern states – as far south as Alabama – with economically-priced Marcellus natural gas.

“It is amazing to think that homes and businesses in Alabama could actually soon be able to consume molecules of natural gas originally produced in Pennsylvania,” says Ferazzi. “Not only does this project help provide direct access to long-term, reliable energy supply, but it has the potential to save consumers in those markets a lot of money.”

In January 2015 researchers at The Pennsylvania State University modeled the market economic impact of the Atlantic Sunrise project on natural gas flows and prices across the Transco pipeline system. Over the 30-month period the study estimated that consumers served by the Transco pipeline from Alabama to New Jersey would have enjoyed about $2.6 billion in total benefits because of the access to the Marcellus basin facilitated by the Atlantic Sunrise expansion.

The Atlantic Sunrise project is currently engaged in a federal regulatory review process. Its backers are aiming to place the $3 billion project into service by 2017.

To learn more about Atlantic Sunrise, and how you can express your support for U.S. energy independence, click here.

Guest Opinion: Pipelines Will Help Lead to America’s Energy Independence

By: Richard Filling
January 21, 2015

A pipeline company has proposed to build a north-south natural gas pipeline through Lancaster County, and while opposition to the pipeline has been raised, it is important to realize how infrastructure investment in domestic sources of energy would help our nation by keeping energy prices low, reducing pollution, and ending a major cause of foreign wars.

Right now, energy in the form of natural gas from the Marcellus shale of Pennsylvania and surrounding states, along with western oil, can drastically reduce our need to import foreign fuel from the Middle East, Venezuela, or any other nation. The energy we need is sitting there in the ground of the counties along the northern tier of our state.

But to make use of this valuable resource to heat our homes, drive our cars, and fuel our factories, the gas must be moved to market — by pipeline underground, trucks over our roads, or rail cars on established and new tracks. Of those, constantly flowing underground pipelines are far more efficient and safer than small-batch transport above ground.

If we can establish U.S. energy independence, there will be three massive, direct benefits. First, OPEC will no longer be able to gouge American consumers and industry by artificially raising the price of petroleum products. The free market, not a cartel, can set the prices of energy.

Second, a major cause of war and U.S. military intervention will disappear.

If we can rely on our own gas and oil fields, and if the necessary infrastructure to deliver this energy to the market were to be put in place, we would no longer have a national security need to intervene militarily in the Middle East or other foreign lands. Other national or humanitarian interests might draw us into foreign conflicts, but not energy security.

Third, development of natural gas production in northern Pennsylvania will continue to bring jobs and wealth to a once depressed part of the Commonwealth. It already is providing funds to build better schools, roads, and services in those communities. Through impact fees, the production companies are sharing some of that new wealth with other counties, including over $3 million to Lancaster County. According to the U.S. Bureau of Labor Statistics, the industry added over 10,000 jobs between 2007 and 2012 with the average annual pay exceeding $80,000.

Those who raise concerns about a new pipeline crossing environmentally or culturally sensitive areas make a good point. A new pipeline certainly should not run across the Shenk’s Ferry wildlife preserve, the Serpentine Barrens, Native American grave sites, or any historic preservation sites.

And construction crews must take care to keep separate topsoil and subsoil when they excavate, so the most fertile soil can be replaced back on top after the pipe is buried.

But pipelines crisscross this county now and have for many decades, bringing gas from western fields to eastern markets. There is no reason to believe that one more pipeline, properly constructed and carefully monitored, will pose any more problems than the many already here.

Those concerned about the environment should also know that natural gas is substantially cleaner than other more widely used fossil fuels. It produces 40 percent less carbon emissions than coal and 30 percent less than oil. So long as this and other countries rely on fossil fuels for energy — and the day of affordable, mass-produced renewable energy is simply not here yet — natural gas moved to market by underground pipeline is as clean and safe as it gets.

The concrete value of a north-south pipeline for our Commonwealth and nation far outweigh the fear of hypothetical harm raised by some opponents. This project would bring economic prosperity, reduce pollution, and eliminate a major cause of modern wars.

In the continuing debate, opponents need to say why they do not support lowering energy prices, cleaning the air, and reducing the causes of war. Our political leaders, so far all silent on this issue, likewise need to explain why they oppose this project or remain silent about the good it would bring.

Richard Filling, a former Pennsylvania commissioner of elections, is a Warwick Township, Lancaster County resident. The views expressed here are those of the author and not necessarily those of Williams.