U.S. CHAMBER OF COMMERCE

Lack of Pipelines Means Many Being Denied the Benefits of the American Energy Revolution

Lack of Pipelines Means Many Being Denied the Benefits of the American Energy Revolution

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By Matt Koch

Energy production, of all types, continues to grow in America. We are blessed with abundant resources and technology. Oil production has grown by 48% since 2008. As of 2011, we are the world’s top producer of natural gas, and have been the world’s top producer of petroleum since 2013. America is still a world leader in coal reserves. Over the past decade, renewable sources of energy have grown from 8.8% of the total U.S. power generation to 13.4%. 

As a result, our nation imports far less energy, is more energy secure, and provides consumers with less expensive energy.  As important, there is tremendous potential and opportunity for our economy and our workers due to these competitive advantages.  

Yet we run the risk of losing the advantages due to the politicization by environmentalists of the pipeline and transmission line projects needed to move energy to where it is needed. Many areas in the U.S. are already missing out on the full benefits of our energy revolution because it has been difficult to move our energy from where it is produced to where it is needed.

The fierce resistance and abuse of the regulatory processes by those who want to “keep it in the ground” is incredibly shortsighted.

David Taylor, president of the Pennsylvania Manufacturers’ Association recently sent a letter to the Federal Energy Regulatory Commission supporting the Atlantic Sunrise natural gas pipeline project.  The pipeline will connect sources natural gas in Pennsylvania’s Marcellus region to a larger East Coast distribution system.

Taylor wrote, “[T]his region of Pennsylvania simply does not have the necessary infrastructure to connect Pennsylvania gas production with end users. It has been estimated that approximately 25-30% of the Marcellus wells drilled to date still do not have pipeline takeaway capacity.” He also added “…we must be able to transport the gas to refine it, manufacturer other products from it, and then export it to our friends and allies throughout the world. Only with more pipeline infrastructure can our global leadership flourish.”

Surprisingly, even those regions close to energy producing areas energy rich areas can sometimes starve for long term energy supplies. For example, the Atlantic Coast Pipeline is proposed to bring some of the abundant supplies of natural gas from West Virginia to areas in Virginia and North Carolina where it is urgently needed. In addition to the increased energy supplies, Atlantic Coast is expected create 2,200 jobs, $377 million in cost savings for consumers, and $28 million annually in local tax revenue to communities in the region. Unfortunately, the Atlantic Coast Pipeline continues to face federal regulatory delays and opposition from environmentalists, despite having the support of the bipartisan trio of governors from those states. 

An article that appeared in Forbes last June (Clemente, Jude “New England’s Known Need for More Natural Gas” 26 June 2016) highlighted New England’s (growing) dependence on fossil energy and the lack of infrastructure needed to bring supplies to the region.

Calling New England “the country’s most oil-reliant region,” author Jude Clemente says that anti-energy infrastructure activists who “claim that more renewables and more energy efficiency negate the need for more gas and more gas pipelines is simply not true. Take Massachusetts, which consistently ranks as the most energy efficient state and has still doubled its reliance on gas power to 50% since 2000.” 

Clemente went on to say that “New England’s natural gas pipelines can’t transport enough gas into the region during periods of cold weather to provide both residential heating customers and power plants. As pipeline capacity is maxed out, the price of natural gas spikes. New England pays the highest prices for electricity in the continental U.S. And residents over the 2013-2015 winters paid a ridiculous $7 billion extra than neighboring regions for electricity.”

“New England’s much higher prices hurt families and businesses and are wreaking havoc on New England’s poor and the elderly. Manufacturers are shutting down or cutting operations due to higher energy prices.” Clemente added.

However, environmentalists continue to battle pipeline and transmission line construction, recently claiming victory as projects that would bring gas from Pennsylvania to the northeast (Constitution Pipeline; Northeast Energy Direct Pipeline) were abandoned after fierce opposition from environmentalists and long regulatory delays. Now, protests have become violent while trying to delay construction of the important Dakota Access oil pipeline project. Of course, there is also the infamous denial of Keystone XL by the Obama Administration.

America is blessed with tremendous supplies of all forms of energy, the ingenuity and ability to develop technology to utilize it more cleanly and efficiently, and the means to transport it safely and with little risk as possible. Still, if pipelines and transmission lines can’t get built to move energy supplies to where they are needed, disparities will continue to grow between regions - and all the benefits to consumers, communities, and our economy will be lost.