The Small Business & Entrepreneurship Council (SBE Council) reacted to the news that Consumer Price Index inflation ran at 0.9 percent in June, and 5.4 percent over the past year.
 SBE Council chief economist Raymond J. Keating said, “Inflation went from running hot to red hot. If annualized, during the first six months of 2021, inflation has been running at better than 7 percent. Over the past four months, the annualized inflation rate ran at better than 8.5 percent.”
 He continued, “What often gets overlooked on inflation are constraints on or disincentives for undertaking productive economic activity. With a pandemic shutdown, much of our economy obviously has faced production constraints, which clearly are driving up prices. And it is taking time – longer than some expected – to work through these constraints. Thankfully, market prices are serving as guides as to where investment and production are needed. But the process can be – and in this case, is – painful.”
Keating noted the impact of policymaking, and what lies ahead that could worsen inflation:
 “While working through pandemic constraints will likely keep inflation running hot at least for a few more months, public policies threaten to make this inflation situation even worse. The unprecedented loose money the Fed has been running for nearly 13 years now stands as a serious uncertainty when it comes to where inflation might be headed.
“Meanwhile, the Biden administration and Congress are working to impose constraints on entrepreneurs, businesses, investors and workers via increased tax and regulatory burdens; industrial policies whereby politicians and bureaucrats make resource allocation decisions; the maintenance of protectionist trade measures; and government subsidies for not working. It seems like just when the private sector works through pandemic constraints, President Biden and Congress will be ready with further governmental costs and restraints.”
 Keating concluded, “The right policy mix for strong growth and low inflation is monetary policy focused on price stability, and incentivizing the supply-side of the economy via tax and regulatory relief, more global trade opportunities, and restrained government spending. Right now, however, the policy mix is pointed in the wrong direction.”
 

From Center Square

Thanks to fracking in the Marcellus shale, Pennsylvania has led a U.S. natural gas revolution since 2007. The state’s production has exploded almost 40-fold, to over 7,300 billion cubic feet, or 20% of the national total. Pennsylvania now ranks second only to Texas on this measure and yields more gas than any other country, except Russia and Iran.
The rise of shale has been critical because natural gas is easily America’s main source of electricity, at 40% of all generation. The International Energy Agency credits the use of cleaner gas – and its displacement of much higher-emission coal – for America’s achievement in cutting CO2 emissions the most “in the history of energy.”
Pennsylvania’s shale production has helped families economically and given businesses a competitive advantage. With Pittsburgh long eager to replace its fleeing steel industry, Allegheny County Executive Rich Fitzgerald, a Democrat and strong Joe Biden supporter, says that “fracking really saved us.” The University of Pennsylvania’s Kleinman Center for Energy Policy reports on the economic benefits from shale development: it has led to a decline in the state’s gas and electricity prices of 40% and 80%, respectively, over the first decade alone, saving families thousands of dollars a year.
Current numbers tell the story: compared to over $10.00 per MMBtu in Asia, gas prices at Marcellus’s Dominion hub in mid-June were below $2.10.
And there is much more to look forward to. The Marcellus is the largest producing field in the world, appraised at hundreds of trillions of cubic feet of supply. Ongoing coal retirements and the closing of Three Mile Island nuclear plant should extend gas’s current 50–55% share of Pennsylvania’s power generation. Data from the Department of Energy indicate that this shift from coal to gas has cut the state’s CO2 emission rate for electricity a staggering 75%, to 720 pounds per megawatt hour.
Not particularly sunny or windy, Pennsylvania currently has 23,200 megawatts (MW) of gas capacity versus just 1,500 MW for wind and 90 MW for solar. And with the state’s paltry 30 MW of battery-storage capacity, it’s clear that gas will remain essential to compensate for the inherent intermittency of renewables and ensure grid reliability. Indeed, it’s telling that the most green-leaning states, such as California, New York, and Massachusetts, are all gas-dominant.
In tandem with Shell’s coming ethane-cracker plant in Beaver County, a huge but low-cost shale resource gives Pennsylvania a chance to rival the Gulf Coast as a manufacturing hub.
All this explains why Governor Tom Wolf’s plan to push Pennsylvania into the Regional Greenhouse Gas Initiative (RGGI) is so disconcerting. The cap-and-trade scheme has snared New York and the New England states, which now have the highest electricity prices in the country, a key reason why Chief Executive magazine regularly ranks them among “the worst states for business.” Pennsylvania would be the only major energy producer in the RGGI, with the irony being that the others are highly dependent on the Keystone State’s shale supply.
Finally, it often goes unmentioned that the U.S. natural gas industry continues to get cleaner and more efficient, across the entire value chain. Data from the U.S. Environmental Protection Agency show that from 1990 to 2019, annual greenhouse gas emissions from gas distributors plunged about 70%, even as utilities added more than 788,000 miles of pipeline to serve 21 million more customers.