Let’s get real…. Natural Gas Remains Important
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.