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Wolf Signs LNG Terminal Task Force Bill

A liquified natural gas (LNG) export terminal could be coming to southeast Pennsylvania.

Gov. Tom Wolf signed House Bill 2458 last week. Passed by the General Assembly on October 25, the legislation creates a task force to study how to develop such a terminal in the area.

American Petroleum Institute (API) Pennsylvania called it a critical step to attracting a major job-creating energy project to the region.

“As the second-largest producer of natural gas in the nation, Pennsylvania has the potential to help address the increasing global demand for affordable, reliable natural gas and aid our allies overseas by exporting LNG,” says API PA Executive Director Stephanie Catarino Wissman. “We applaud policymakers for embracing this opportunity to strengthen Pennsylvania’s standing as a leading energy supplier and attract significant new investment to the state.”

DVJ reached out to gubernatorial candidates Josh Shapiro and Doug Mastriano for comment. Shapiro declined to respond, but Mastriano supports the LNG plan.

“An LNG export terminal will allow Pennsylvania to export our valuable natural gas to the rest of the nation and the crucial international market,” said Mastriano. “Thousands of new jobs will be created, especially for those in the building trades.

In addition, Mastriano said new revenue from the exports will be reinvested into the Pennsylvania economy. As a result, Mastriano viewed it as a win-win for everyone.

Retiring state Sen. Bob Mensch (R-Bucks/Montco) says the LNG plan is needed to counter anti-energy-development policies of the past.

“I want to add my voice and approval for HB 2458 which will provide a much-needed avenue for the export of PA produced natural gas,” Mensch said. “Decisions over the past several years at both the federal and state level have intended to debilitate the natural gas industry in PA.  I’m pleased the governor signed the bill realizing 37 Senators voted for this important economic development action.”

Not every Delaware Valley legislator is on board, however. Rep. Greg Vitali (D-Havertown) said the U.S. will never reach carbon neutrality if it keeps building fossil fuel infrastructure like LNG terminals. Instead, Vitali said we should be devoting our resources to producing carbon-free energy and energy conservation.

“The war in Ukraine will long be over before an LNG terminal could be operational in Philadelphia,” says Vitali. “Exporting LNG overseas increases the price of natural gas to customers in Pennsylvania.”

Vitali adds that LNG terminals should be built in remote locations, not high-population areas like Philadelphia, to avoid the risk of catastrophic loss of life and property in the event of a leak or explosion.

Vitali is not alone. In April, Rep. Mary Isaacson (D-Philadelphia) told DVJ she did not support House Bill 2458.

“It is unfortunate that bill author and Rep. Martina White (R-Philadelphia) didn’t consult with representatives who actually represent the constituents on the waterfront – the Pennsylvanians who would be most affected by this,” said Isaacson.

For example, Isaacson said there is no mode of transportation to import the fuel that would not impact people in Philadelphia.

“They and their representatives should have been consulted about this type of task force being created,” Isaacson said. “While this bill and task force is being falsely presented as a positive step forward for Pennsylvanians, it is actually expediting the placement of a dangerous environmental hazard in their backyard.”

Export terminal opponents may face an uphill battle. Even President Joe Biden is on record as saying he is not opposed to LNG and LNG infrastructure.

In March, the Biden administration and the European Commission on European Energy Security issued a joint statement saying they were “committed to reducing Europe’s dependency on Russian energy.” The March statement mentioned a Task Force on Energy Security.

“The Task Force will strive to ensure, including working with international partners, additional LNG volumes for the EU market of at least 15 bcm in 2022 with expected increases going forward.”

Meanwhile, the Biden administration said it was “committed to maintaining an enabling regulatory environment with procedures to review and expeditiously act upon applications to permit any additional export LNG capacities that would be needed to meet this emergency security objective.”

API said it is prepared to help.

“According to a recent study commissioned by API and conducted by Rystad Energy, although U.S. LNG is already flowing to Europe at record levels, significantly more will be required to fully rebalance European gas markets in the wake of Russia’s invasion of Ukraine and the resulting energy crisis,” said API PA. “The study found that in the absence of Russian gas, Europe’s demand for LNG would increase 150 percent from 2021 to 2040.”

The task force will be composed of legislators, the natural gas industry, Philadelphia building trades, and PhilaPort. Members will study the economic feasibility, financial impact, and security issues involved in making the Port of Philadelphia an LNG export terminal.

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OPINION: American Natural Gas-Driven Energy Security

Amid returning to post-pandemic normalcy, a horrific war and an energy supply crunch have had devastating effects on consumers across the globe, all against the backdrop of historical inflation.

It’s essential to understand American natural gas’s critical role in ensuring the world has access to affordable, reliable, clean energy and underpinning our national security.

Europe’s economic and energy policies fostered an environment that resulted in deep and dangerous reliance on Russian energy. The continent is now faced with soaring energy prices and significant reliability concerns. As our strategic allies desperately seek solutions, America’s energy producers are focused on safely increasing supplies to loosen Russia’s chokehold, including routing liquefied natural gas to Europe and signing strategic long-term LNG supply contracts.

But while these international partnerships are a step in the right direction to strengthening Europe’s energy security, policymakers are faced with grim choices. Germany is one step away from rationing natural gas in response to Russia’s latest actions to curtail fuel delivery. “We are in a gas crisis,” said Germany’s economy minister, Robert Habeck. “From now on, gas is a scarce commodity.”

That’s starkly different compared to the United States, where, as the world’s top oil and natural gas producer, we are much more energy secure due to the abundance of resources beneath our feet.

Additionally, having a plentiful domestic energy supply means we can share the economic and environmental benefits of American energy worldwide. In fact, the United States recently surpassed Australia and Qatar to become the globe’s top LNG exporter.

This is great for American diplomacy, domestic job creation and the environment. Amid returning to post-pandemic normalcy, a horrific war and an energy supply crunch have had devastating effects on consumers across the globe, all against the backdrop of historic inflation.

It’s important to understand the critical role American natural gas plays in ensuring the world has access to affordable, reliable, clean energy and underpinning our national security.

Europe’s economic and energy policies fostered an environment that resulted in deep and dangerous reliance on Russian energy. The continent is now faced with soaring energy prices and significant reliability concerns. As our strategic allies desperately seek solutions, America’s energy producers are focused on safely increasing supplies to loosen Russia’s chokehold, including routing liquefied natural gas to Europe and signing strategic long-term LNG supply contracts.

But while these international partnerships are a step in the right direction to strengthening Europe’s energy security, policymakers there are faced with grim choices. Germany is one step away from rationing natural gas in response to Russia’s latest actions to curtail the delivery of fuel. “We are in a gas crisis,” said Germany’s economy minister, Robert Habeck. “From now on, gas is a scarce commodity.”

That’s starkly different compared to the United States, where, as the world’s top oil and natural gas producer, we are much more energy secure due to the abundance of resources beneath our feet.

Additionally, having a plentiful domestic energy supply means we are able to share the economic and environmental benefits of American energy worldwide. In fact, the United States recently surpassed Australia and Qatar to become the globe’s top LNG exporter.

A Pew Research poll found that voters want to see more natural gas production at home to increase exports to Europe.

As the largest natural gas-producing region with the greenest environmental profile in the country, our three states  — Pennsylvania, Ohio and West Virginia —  have the tools to solve global energy woes.

Safety, integrity and a commitment to continuous improvement are values held deeply by the members who make up our respective organizations. We’re committed to being the driver of America’s clean energy future.

After all, technological breakthroughs in our industry brought America its long-sought net energy export status for the first time since the 1950s. Not to mention that the United States has reduced emissions faster than any country in the world, thanks to the increased use of natural gas.

However, policymakers must do more to enable this American energy progress to deliver even more benefits for our economy, our people, our allies and our environment by approving needed infrastructure, expanding export capacity and increasing domestic natural gas production.

Rather than turning to American ingenuity for support, our president would instead turn to cartel leaders to stabilize the market. “Before you visit Riyadh, we invite you to visit Reynoldsville, Pa. It’s the heart of the Marcellus Shale in the state where you were born, one of the most prolific natural gas-producing regions in the world,” the energy industry leaders wrote in a recent letter to President Biden.

“Join us in one of America’s major energy-producing areas which together launched the American energy revolution that ended decades of U.S. energy scarcity and growing dependence on foreign governments,” the letter said.

Never has it been more apparent that access to affordable, reliable and clean energy is directly tied to security and quality of life. America — led by Appalachian energy — has the opportunity to take the lead in reducing energy scarcity and helping our allies discover new energy and economic growth opportunities. That is something we as Americans should take great pride in.

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US, PA Energy Producers Cheer Biden LNG Shipments to Europe

As Russia continues to wage war against Ukraine, the U.S. and its European allies made a deal to protect the EU’s energy sector from Russian aggression, President Joe Biden announced a plan to bring massive amounts of liquified natural gas (LNG) to EU nations.

That means more demand for the natural gas produced here in Pennslyvania.

“Europeans have depended on Russian natural gas for far too long, threatening energy security and environmental progress,” the Marcellus Shale Coalition said after the deal was announced. “American natural gas is the cleanest on the planet, with a 65 percent lower methane intensity rate than Russia’s.”

Biden made the announcement during a joint appearance with European Commission President Ursula von der Leyen in Brussels.

“The United States, together with our international partners, they’re going to — we’re going to work to ensure an additional 15 billion cubic meters of liquified natural gas — LNG — for Europe this year,” Biden said. “And as the EU works to discontinue buying Russian gas well before 2030, it will also work to ensure additional EU market demand for 50 billion cubic meters of LNG from the United States annually by 2030.”

According to industry estimates, one billion cubic feet of LNG is enough fuel to heat about five million U.S. homes for a day.

“It’s not only the right thing to do from a moral standpoint, it’s going to put us on a much stronger strategic footing,”

The announcement was praised by energy producers in the U.S.

“We welcome the president’s focus on expanding U.S. LNG exports to our European allies during this crisis, and we applaud the administration’s continued leadership in ensuring a unified international response to maximize pressure on Russia through additional sanctions,” said American Petroleum Institute (API) President and CEO Mike Sommers.

Nearly 40 percent of the national gas needed to generate power and heat Europe’s homes comes from Russia. Europe has been the top destination for U.S. LNG in recent months. In February, Reuters reported at least half of U.S. LNG shipments went to Europe.

According to Rystad Energy’s vice president Sindre Knutsson, the agreement marks “a u-turn from previous EU purchasing decisions as many buyers had stopped negotiating with U.S. developers for LNG due to ESG (environmental, social, and governance) concerns. Now, however, it appears that energy security has trumped ESG concerns — at least temporarily.”

That is not what environmental groups like the Sierra Club want to hear.

“Allowing for the expansion of new and expanded gas export facilities would lock in decades of reliance on risky, volatile fossil fuels and spell disaster for our climate and already overburdened Gulf Coast communities,” says Kelly Sheehan, senior director for energy campaigns at Sierra Club.

Sheehan would rather see the U.S. rapidly transitioning to wind and solar, not doubling down on fossil fuels.

“It’s encouraging to see this announcement’s emphasis on clean energy and energy efficiency, and we hope to see more detail soon about plans to reduce demand and make necessary investments in more efficient technologies,” says Sheehan. “Reducing reliance on fossil fuels is the only way to stop being vulnerable to the whims of greedy industries and geopolitics.”

But it was Europe’s decision to take extreme action on energy policy in pursuit of ESG goals that pushed it into a corner Putin has been able to exploit, some analysts say.

“This is a welcome announcement and a strong partnership that should help wean Europeans’ dependence on Russian natural gas by providing more energy choices,” said Nick Loris, vice president for public policy at the Conservative Coalition for Climate Solutions (C3 Solutions). “Hopefully the Biden administration and EU take the necessary steps to streamline the infrastructure buildout necessary to end Russia’s control over European gas markets.”

And that buildout is an area of concern as the U.S. LNG export system is operating close to capacity. Beth Sewell with Quantum Gas & Power told Marketplace Friday she does not believe American producers can do much in the short term to meet European energy needs.

“LNG terminals require long-term contracts to support their financing and the LNG is sold under long-term contracts,” she explained. “This means that most of the LNG for export is already contracted for a long time to come, so shippers would face massive breach of contract litigation.”

During a press call on Friday, a senior Biden administration official said the U.S. has already doubled LNG exports to Europe over the past three to four months.

“But we also arranged, over the course of the winter months, a number of swaps from our partners all over the world, particularly in Asia, to supply more LNG to Europe during its winter. And so we’re going to continue those efforts throughout 2022 — that’s what we’re committing to do — to hit the 15 bcm target.”

Meanwhile, the European Commission will work with EU member states toward the goal of ensuring, until at least 2030, demand for approximately 50 bcm/year of additional U.S. LNG. That is equal to about a third of what they get from Russia today.

At API, Sommers says it stands ready to work with the administration to follow the announcement with meaningful policy actions to support global energy security.

“That includes further addressing the backlog of LNG permits, reforming the permitting process, and advancing more natural gas pipeline infrastructure.”

Sen. Pat Toomey  (R-Pa.) says the plan isn’t aggressive enough.

“The joint task force’s timeline for reducing Europe’s dependence on Russian energy is too long to cripple Putin’s war machine in Ukraine,” he said via Twitter. “In order to effectively sever his revenue stream, we must cut off Putin’s oil and gas sales globally by imposing secondary sanctions on the entirety of Russia’s financial sector.

“The time to take action is now—while the demand for gas has lessened and American companies and others can help replace supplies ahead of next winter,” Toomey said.

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CALLAHAN: Unleash American Energy’s Strength & Security

Access to affordable, clean and reliable energy is at the center of the crises unfolding across Europe and the events leading up to Russia’s unprovoked invasion of Ukraine.

For far too long, Russia’s leadership has weaponized their energy resources, inflicting pain on regional nations to gain political and economic influence. These vulnerabilities have been exacerbated by unrealistic policies focused on a rapid transition to renewable energy.

Given the urgency to support our European allies and the brave people of Ukraine, we must act swiftly to put in place mechanisms to combat Russia’s aggression – including leveraging America’s abundant natural gas resources.

Our European allies, who have become reliant on Russia for more than 40 percent of their natural gas due to short-sighted policy decisions, are facing supply shortages and reliability challenges which, together, are causing deep economic pain to the region. In fact, natural gas prices in Europe broke record highs this week. This dependency not only de-stabilizes Europe, but it directly funds Russia’s the war machine.

As the world’s largest producer and exporter of natural gas, America – and Pennsylvania in particular – is uniquely positioned to do even more to support our allies and their efforts to counter Russia’s hostility. We are fortunate to have such abundant resources that can meet domestic consumer demand and aid European allies.

Some progress is starting to take place in earnest. Germany, for example, is advancing infrastructure investments to enhance natural gas trade and imports from allied nations in order to weaken Russia’s grip on their energy and economic security – yet much more can and must be done, and the U.S. is well-positioned to lead.

Here at home, export facilities along the East and Gulf Coasts are shipping record levels of LNG to Europe, helping our allies access the world’s most responsibly produced natural gas. Currently, more than half of American LNG exports are Europe-bound – but we can do more.

The strength of America’s shale revolution has created the ability for us to act swiftly to help our European allies while improving the global environment and our overall energy security. This is a proven fact. Consider, other strategic U.S. allies with few natural resources of their own – such as Japan and South Korea – have been top recipients of clean U.S. LNG for the past several years. Our support has helped these countries shore up their own energy security while advancing our own national security here at home.

From a policy perspective, elected officials must prioritize solutions that boost the security of our allies as well as the climate benefits inherent to domestic natural gas. This means de-bottlenecking approvals for necessary infrastructure and working collaboratively to reduce obstacles to maximizing the development and deployment of our natural gas resources. With the right level of commitment from policymakers, we’ll make certain Russia’s ability to inflict pain is short-lived.

In fact, recent polling shows nearly three-quarters of Americans – on both sides of the political spectrum –believe natural gas should be part of our country’s energy policies.

And there’s no debate that American natural gas is the world’s cleanest and most strongly regulated. As an example, the Clean Air Task Force notes that Russian natural gas has a 65 percent higher methane intensity rate compared to ours. Furthermore, Appalachia-produced natural gas has lowest methane intensity across the entire U.S.

Some question whether America has the political will to make the right policy decisions to prioritize modern energy infrastructure. We don’t need to look to Europe as an example of how short-sighted policy has negative consequences, we need only look to New England, where state politicians have banned critical pipeline infrastructure, resulting in significant economic hardship for consumers. Their policies have directly led to a growing dependence on importing foreign natural gas – including, just a few years ago, from Russia.

Pennsylvania’s clean, abundant natural gas resources cannot alone solve Europe’s energy crisis or Russia’s malicious aggression toward allies. However, our energy resources can assist the long-term needs of Americans and our allies, providing stability to global energy markets all while improving our global environment.

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