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PODCAST: PA’s Energy Abundance Is Good for U.S. Why Does Biden Treat It So Badly?

On this edition of the Delaware Valley Journal podcast, David Callahan, president of the Marcellus Shale Coalition talks about the benefits Pennsylvania and America get from the abundant, clean natural gas found in the Keystone State. DVJournal News Editor Linda Stein asked about PA’s different system of taxing natural gas compared to other states, and the revenue benefits from the energy sector for local governments.

And if you’re looking for a good-paying job in Pennsylvania — some with a six-figure salary — David Callahan knows who you should call!

Hosted by Michael Graham.

 

 

 

 

Nat Gas Fees Generate $234M as GOP Targets Dems Over Energy Policy

Pennsylvania’s tax on natural gas development generated $234 million in 2021, marking the second-largest amount ever returned to communities across the commonwealth, the Pennsylvania Public Utility Commission (PUC) said Friday.

The natural gas impact fee has generated $2.2 billion in the last decade.

Most of the money goes to county and local governments, however some state agencies also receive funds. The money funds infrastructure, emergency response and environmental programs.

“Generating $2.3 billion in essential funding for state and local governments across all 67 counties, Pennsylvania’s unique natural gas tax is an effective policy that yields impactful results,” Marcellus Shale Coalition president David Callahan said.

Some $234.4 million will be distributed to the state and counties in 2022, with all 67 counties receiving an allotment.

“The nearly 60 percent increase in this year’s distribution is directly related to heightened activity levels and the commodity price environment, underscoring the importance of policies that encourage domestic natural gas development, transportation and use. Our members continue to be focused on responsibly developing clean, abundant Pennsylvania natural gas, which is even more important today in keeping America and our allies’ energy secure,” Callahan said.

American Petroleum Institute Pennsylvania (API PA) Executive Director Stephanie Catarino Wissman said, “Every corner of the commonwealth has directly benefitted from Pennsylvania’s impact fee. This tax on natural gas wells has generated new revenue – totaling more than $2.2 billion over the past decade – for a wide variety of environmental, conservation, infrastructure, public safety and recreation projects. The report shows how natural gas production in Pennsylvania provides hundreds of millions annually in essential revenue while strengthening our economy.”

The impact fee revenue depends on the average annual price of natural gas on the New York Mercantile Exchange (NYMEX), which increased in 2021 compared to 2020, when the demand for natural gas declined due to the COVID-19 pandemic and a mild winter. Impact tax revenue reached $234 million in 2021, nearly 60 percent more than 2020, one of the highest collections since the impact tax was imposed ten years ago.

“As the demand for energy rebounds, policy certainty and long-term energy solutions are needed to help ensure that Americans have access to affordable and reliable energy,” said Wissman. “Pennsylvania’s abundant shale gas presents a unique opportunity to bolster domestic supply while funding critical infrastructure and environmental programs across the state, even in areas without natural gas development.”

This announcement comes when energy companies are under attack by the Biden administration over “excess” profits, a charge that economists dismiss.

Biden took steps to hamstring the energy companies at the onset of his administration, blocking the Keystone XL pipeline and signed executive orders to halt new oil and gas leases on public land, favoring green energy alternatives.

“Getting on a plane right now to go meet with a murderer to talk about the Saudis picking up their production, or writing a letter to the CEOs of Chevron and Exxon to say ‘super-duper large profits won’t be tolerated’ is simply inexcusable,” said economist David L. Bahnsen about Biden’s energy policy.

And while Biden has blamed high gasoline prices on Russian President Putin and the war in Ukraine, he recently pivoted to blame oil companies. But gasoline prices were at an average of $2.27 a gallon nationwide on Jan. 20, 2021 when Biden took office. On Jan. 3, a month before Putin invaded Ukraine, the national average gas price stood at $3.28 a gallon and as of Friday, the average price was $5 a gallon.

And it’s not just Biden.

Congresswoman Madeleine Dean (D-Montgomery) tweeted in March: “The price of crude oil is falling, and that should be reflected at the pump. We must be certain that energy companies are not using an unjust war to profit and price gouge.”

And in a let them eat cake moment, Transportation Secretary Pete Buttigieg said families who buy electric vehicles “never have to worry about gas prices again.”

Meanwhile, the sale price for an EV, on average, was $60,054 in February. That compared to $45,596 on average for all new vehicles, including electric ones, according to data from Edmonds.

Also, there’s the convenience factor. On a recent road trip, a Wall Street Journal reporter said she spent more time charging her rented EV than sleeping.

In a tweet that sums the situation up, Rep. Jim Jordan (R-Ohio) said, “The United States is blowing through its strategic oil reserves faster than expected. Gas is $5 a gallon nationally. And Joe Biden STILL refuses to drill domestically.”

The National Republican Senatorial Committee is making political hay for the 2022 midterms out of the high gas prices. They’re airing a new commercial targeting Democratic Nevada Sen. Catherine Cortez Masto and Democrat John Fetterman, who is running for the Senate, linking them to Biden and the high gas prices.

The ad says Fetterman backs Biden and the Green New Deal.

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CASTOR: The Key to Unlocking Our Country’s Energy Bounty Can be Found in the Keystone State

While Texas and the other Gulf States often dominate the narrative around energy production, one of the most vital locations for domestic energy production lies in the mid-Atlantic region. Pennsylvania is home to an enormous amount of natural resources that are integral to the energy supply of our country. Despite being one of the top 10 states in natural gas, petroleum and electricity consumption, Pennsylvania is the third-largest net exporter of energy in the country. The Keystone State has also seen its gas reserves quadruple in the last 10 years, thanks to the increased development of the largest natural gas field in the U.S., the incredible wonder, Marcellus Shale.

The war in Ukraine has highlighted in neon the danger of reliance on foreign—and often hostile—nations for energy production and delivery. The Biden administration’s embargo on Russian oil, coal, and natural gas was a necessary decision in response to its invasion of Ukraine. The administration’s recent announcement that it wants to send more U.S. natural gas to Europe is the next logical step, but because of longstanding and misguided opposition to energy exports, that entire effort could be hampered by the lack of terminals for shipping the gas.

European Union leaders backed plans to buy gas jointly if the United States supplies it, but the lack of immediate infrastructure capacity (frankly, the ability) to fulfill our promise makes it all largely symbolic, unless we act now.

There is good news, however.  Learning of this strategic deficiency provides an opportunity to reinvest in America’s energy sector we should not waste. The legacy of pushing aside the oil and gas sector while simultaneously talking about the need for energy independence is inconsistent and doesn’t work.  We must seize the opportunity to strengthen our country’s economy and energy security.  Placing faith in Saudi Arabia or the UAE will not solve our energy dependence, but domestic production and infrastructure can do so.

Pennsylvania is poised for this chance. The Mariner East pipeline system currently transports natural gas liquids across the state, delivering energy across Pennsylvania and throughout the southeast. As of February 2022, Mariner East 2 and its parallel counterpart Mariner East 2x have completed the final step in the construction process and is now awaiting commissioning. These pipelines generated 9,500 construction related jobs per year over six years, as well as $122 millionin generated taxes for the commonwealth. Continued reliance on foreign energy resources going forward could never come close to producing the same amount of economic benefits as these domestically produced resources and pipelines have already proven attainable.

Pipelines are shown to be the safest, most technologically advanced method of transportation for petroleum and natural gas liquids. In order to continually verify the Mariner East pipeline system, there are certified controllers who monitor the pipeline 24 hours a day, seven days a week. In addition to these precautions, an automated system is also detects potential leaks and can shut down the pipeline automatically.

In January, two protesters temporarily halted the construction of the new pipelines when they trespassed on the property and locked themselves onto the equipment. Not only have the systems been proven to operate safely but trespassing on an active construction site increases the very risks these protestors want to limit. As foolish as these acts were then, they seem even more foolish now given the state of domestic and global affairs making increased production a strategic national security issue for all Americans and our allies.

Now is the time to invest in Pennsylvania’s natural resources and encourage new infrastructure projects as the Keystone State continued to be a driving force in our nation’s domestic energy production. The solution to our country’s energy crisis is not turning to adversarial nations abroad, nor in letting our allies rely on countries that oppose us. The answer is at home, and Pennsylvania should lead the way.

 

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Mariner East Pipeline Construction Complete, Company Says

After years of construction challenges and contentious political debates, the Mariner East 2 pipeline is now completed, Energy Transfer (ET) announced on Wednesday.

“In February 2022, construction of the final phase of the Mariner East project is complete, and commissioning is in progress which will bring our capacity to 350,000 to 375,000 barrels per day,” ET’s Co-Chief Executive Officer Tom Long announced during the company’s fourth-quarter 2021 earnings call.

“Energy Transfer’s Mariner East franchise will now include multiple pipelines across Pennsylvania connecting the prolific Marcellus/Utica Basins in the west to markets throughout the state and the broader region, including Energy Transfer’s Marcus Hook terminal on the East Coast,” Long said.

And the pipeline’s been partially operational for months. “For full-year 2021, natural gas liquids (NGL) volumes through the Mariner East system and our Marcus Hook terminal are up nearly 10 percent.”

The Dallas-based company, which operates more than 114,000 miles of pipelines across North America, reported a record amount of products through its network in 2o21, in part thanks to the Mariner East capacity already online.

“Now that the final phase is complete, it brings our capacity to 350,000 to 375,000 barrels per day,” said Long said.

The $2.5 billion, 350-mile project began in 2017, providing hundreds of jobs but also provoking political pushback from opponents of fossil fuels. While the pipeline runs across the entire state, the opposition has been particularly intense in the Delaware Valley.

Rep. Danielle Freil Otten (D-Chester County) launched her political career with a run for the state legislature on her opposition to the project. She tapped into her neighbors’ frustration with the hassles that came with construction. However, her opposition has continued even as the pipeline’s construction has drawn to a close.

As recently as last October, Friel Otten was holding press conferences calling for the shutdown of the entire pipeline project.

Her colleague Rep. Greg Vitali (D-Havertown) told DVJournal he’s still opposed. “It’s imperative that we, as a planet, reach carbon neutrality by midcentury in order to avoid the worst effects of climate change. Constructing new fossil fuel infrastructure such as pipelines make reaching carbon neutrality increasingly difficult.”

Workers in the energy sector, however, have a different view.

“This is the news our members have been waiting for,” said Jim Snell, business manager of the Steamfitters Local 420. “They’ve been laboring for years on this pipeline because they know even greater opportunities are possible at the Marcus Hook Industrial Complex and beyond once everything is up and running. The economic benefits of this project have been irrefutable, but the economic promise is even greater.”

The construction of the Mariner East pipelines is credited with an estimated $9.1 billion in tax revenue and economic impact to the state. It also provided thousands of union jobs.

Thomas Shepstone, a Pennsylvania-based energy consultant said, “The Mariner East project distinguishes Pennsylvania from some of its neighbors. It proves one can still do big valuable infrastructure projects in Pennsylvania; projects that produce jobs, deliver goods safely and position the Commonwealth to grow and economically develop.”

Kurt Knaus, spokesperson for the Pennsylvania Energy Infrastructure Alliance, agreed. “Residents and businesses have long awaited the Mariner East project to come to fruition. Now, with its completion, Pennsylvania will soon be able to realize the full potential of this massive investment in energy infrastructure.

“The success of this project will be felt across the state for decades to come, and our communities will continue to benefit economically and environmentally from its sustained operation,” Knaus said.

 

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