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OP-ED: Natural gas powering our economy
As most Pennsylvanians know, we are producing more natural gas than all but one other state, thanks to the prolific supplies of gas in the Marcellus and other formations.
What many Pennsylvanians may not know is that we are also second in the nation in total electric generation.
Coal and nuclear have provided reliable, baseload power, with natural gas and alternative energy filling in during times of high demand. But our grid — that is, the elaborate system of power plants, substations and transmission lines that provides our electricity — is changing.
Government regulations require Pennsylvanians to purchase more and more alternative energy — energy that is more costly and less reliable than traditional sources. One ironic effect of this is that some nuclear units, despite being zero-carbon, emissions-free and able to run regardless of the weather, are in jeopardy of retirement in large part due to these mandates that have cost ratepayers tens of millions of dollars.
Further, even though our nation and economy continue to grow, costly federal regulations have made building new, more efficient coal-fired power plants all but impossible — and many existing ones are being retired.
The good news is that there are new natural gas plants being proposed — but the bad news is the Wolf administration continues to press for a potentially market-crushing severance tax that could impinge our state's future growth.
It is imperative that, in order to have affordable and available fuel supplies for power plants during this time of unprecedented change to the grid, state policymakers not impose additional costs on production, on top of the hundreds of millions of dollars in impact fees producers already pay.
Imposing a severance tax on production could jeopardize Pennsylvania's ability to supply fuel for power generation — not just for the state, but also for PJM, the regional grid operator that provides power to 61 million Americans in Pennsylvania, 12 nearby states and Washington, D.C.
PJM's independent market analyst, Monitoring Analytics, provides a good overview of the electric generation landscape in its latest "State of the Market Report." The report expects that nearly 27 gigawatts of electric generation capacity, or more than enough to power about 20 million homes, will retire by 2019. Much of that is in Pennsylvania, much of it is due to onerous federal air quality regulations, and most of those retirements will happen by the end of next year.
Poorly thought out government policy has left challenges for nuclear and coal to provide power to the grid. Natural gas can help meet demand for affordable power, but only if state and federal government does not impede its ability to do so.
Important to many is the fact that natural gas will help us continue to clean the air. Since 2008, state Department of Environmental Protection data shows that emissions reductions of 68 percent for sulfur dioxide, 42 percent for particulate matter, 28 percent for nitrogen oxides and 12 percent for carbon monoxide have been achieved. This has led to fewer ozone air quality alerts, which are forecasted on days of poor air quality. There were just four ozone action days in all of 2014, down from 28 days in 2012.
While it is well known that natural gas development supports hundreds of thousands of direct and indirect jobs, gas-fired electric generation is providing an additional economic driver.
New highly efficient natural gas power plants are being built or are proposed throughout the Commonwealth. Constructing these facilities will create hundreds of jobs over several years and help provide affordable, reliable power so that our economy can continue to grow. Cheap energy is critical to growing blue-collar manufacturing jobs here in Pennsylvania.
Also imperative to taking full advantage of gas are pipelines, which, in addition to safely delivering fuel for heating and power across the state, provide both short- and long-term economic growth.
The proposed Sunoco Mariner East project, if constructed, represents a $4.2 billion investment into Pennsylvania's economy, connecting hundreds of existing drilling jobs in southwest Pennsylvania to potentially thousands of new manufacturing jobs throughout south central and southeast Pennsylvania.
We're at a crossroads when it comes to our grid and our energy future. The state should be doing all it can to continue its role as an energy leader. In order to have a grid that can provide power reliably and affordably, we should allow gas, coal and nuclear to have a strong role in our portfolio by moving away from government mandates and regulations that distort the market and provide little benefit to human health. We must also promote continued, robust production of natural gas, not thwart production with a severance tax, or infrastructure development with onerous regulatory hurdles.
— Kevin Sunday is government affairs manager for the Pennsylvania Chamber of Business and Industry.