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Observer-Reporter Guest Essay: Why Politicians Want You To Pay More For Natural Gas

By Patrick McDonnell, CEO of PennFuture, Former Secretary of DEP

This guest essay first appeared in the Observer-Reporter on October 17, 2024

Politicians often speak out against higher taxes, grocery bills, or utility rates, promising to work hard in office to prevent you from paying more. However, there is one notable exception: how much you pay for natural gas.

You probably won’t hear statements praising the idea of making you pay more to heat your home or take a hot shower.

Politicians know that won’t sell. Instead, they provide the gas industry with justification to increase prices in the name of jobs and national security.

As of Sept. 19, natural gas costs $2.26 per thousand cubic feet (mcf). At least one gas fracking company cites $2.50/mcf as their break-even point.

That means the gas is worth more sitting in the ground than for them to extract it. It’s simply not worth it to take the gas from the ground at the price they are getting.

Over the years, the industry has tried to sell the public other ways to use its products.

First was plastics and chemical production along with the promise of jobs around the Shell ethane cracker plant in Beaver County.

The jobs did not come, and while the price of gas didn’t go up, air and water pollution sure did.

Today, the fossil fuel industry is aggressively promoting a liquefied natural gas facility near Philadelphia, explicitly targeting the most overburdened and underrepresented communities in the area so that they can export more gas overseas.

The executives told state policymakers that Southwest Pennsylvania should produce hydrogen from natural gas. The plan involves producing hydrogen, capturing carbon, and then storing it underground.

The problem is that these types of projects are massively expensive and, in the case of carbon capture, have never been done at this scale.

That means they are going to politicians with their hand out to receive more of your tax dollars with nothing to show for it except receipts from past failures like leaking pipelines, harmful air pollution, and dangerous explosions.

The reality is that the gas industry isn’t focused on creating jobs or “sticking it” to Russia’s Vladimir Putin.

It’s focused on increasing the price of natural gas to increase its bottom line.

If it can jack the price of natural gas to $4.00/mcf, it will more than double its share value. That is what this is all about.

But without all of us paying more for their product, this won’t happen.

And, unfortunately for them, the energy market is pointing in the opposite direction.

Fracked gas companies are seeing less build-out of new natural gas power plants because solar and wind power are so cheap.

The amount of plastic used in our everyday lives has reached a tipping point, and societal demand for more plastic is on the decline.

The fossil fuel industry needs other markets to boost the price and their value, so it will try to force new, taxpayer-funded facilities and export terminals into construction which will increase demand artificially.

And once that demand artificially increases, the price goes up, and every Pennsylvanian relying on natural gas in their home or business will see their rates go up.

We will pay for these subsidies, preferential policies, and industry projects on our tax bill.

We will pay for it in our heating bill.

We will pay for it at the grocery store.

We will pay for it in increased insurance costs as our health suffers.

We will pay and the companies will eat the profits.

It’s time to stop falling for this grift.

Patrick McDonnell is the president and CEO of Citizens for Pennsylvania’s Future, a nonprofit that focuses on clean energy and environmental issues.

NewsClip:

-- Observer-Reporter Guest Essay: Why Politicians Want You To Pay More For Natural Gas - By Patrick MCDonnell, Fmr Secretary of DEP, Current CEO of PennFuture [PDF of Article]

Resource Links:

-- PJM Interconnection Winter Outlook: Adequate Power Supplies Available Under Normal Conditions; PJM Delays Next Power Auction After Prices Spike [PaEN]

-- Utility Dive: North American Electric Reliability Corp Sounds Alarm Over Maintaining Sufficient Winter Natural Gas Supplies To Address Extreme Winter Conditions; PA Gas Producers Cutting Production, Pulling Drill Rigs [PaEN]

-- Pennsylvania’s Electric Grid Is Dependent On One Fuel To Generate 59% Of Our Electricity; Market Moving To Renewables + Storage [PaEN]

-- Baker Hughes: PA Natural Gas Drilling Rigs Down 2 From Last Week; Down 38% Since Aug. 23 [Part Of Strategy To Increase Natural Gas Prices; Cut Payments To Municipalities Under Act 13 Impact Fees]

-- US DOE: China Is Biggest Destination For US LNG Gas Exports; PA Shale Gas Industry Says We Have ‘Duty’ To Export Gas To China, Our Military, Economic Competitor [PaEN]

-- PA Marcellus Shale Gas Coalition Doubles-Down On Support For Exporting PA Natural Gas To China, Our Economic, Military Competitor [PaEN]

-- Bloomberg: LNG Gas Ships Now Diverting To Europe, Away From Asia, To Tap Price Increases Driven By Mideast War Fears [This Week]

-- Bloomberg: LNG Gas Traders Choose To Pay Penalties For Not Shipping Gas To Germany To Chase Higher Profits In Asia [Last Week]

PA Oil & Gas Industry Public Notice Dashboards:

-- PA Oil & Gas Weekly Compliance Dashboard - October 5 to 18 - Conventional Well Owners Issued 767 Violations For Abandoning Their Wells - So Far, More Than Double Number In 2019; Leaking Gas Storage Area Wells [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices, Opportunities To Comment - October 12 [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices, Opportunities To Comment - October 19 [PaEN]

-- DEP Posted 87 Pages Of Permit-Related Notices In October 12 PA Bulletin [PaEN]

-- DEP Posted 57 Pages Of Permit-Related Notices In October 19 PA Bulletin [PaEN]

Related Articles This Week:

-- Pennsylvania Voters Overwhelmingly Support Stricter Regulations On Fracking, New Poll Finds [PaEN]

-- Saint Vincent College Study Finds Counties With Shale Gas Fracking Wells Using Chemicals That Target Certain Hormones Have Greater Incidence Of Pre-Term Births, Low Birth Weights [PaEN]

-- Beaver County Residents Invited To Join An Oct. 23 In-Person Tour Of Shale Gas Fracking Sites & Infrastructure In Washington County And Discover Its Costs [PaEN]

-- Observer-Reporter Letter: There’s Another Side To The 'Shale Gas Revolution' [PaEN]

-- Sen. Bartolotta, Sen. Yaw Announce Bill To Withhold Gas Drilling Impact Fees To Municipalities That Set More Protective Standards On Natural Gas Development Than State Law, And While There Is a Legal Challenge To Local Restrictions [PaEN]

-- Observer-Reporter Guest Essay: Why Politicians Want You To Pay More For Natural Gas - By Patrick McDonnell, CEO of PennFuture, Former Secretary of DEP [PaEN]

-- PJM Interconnection Winter Outlook: Adequate Power Supplies Available Under Normal Conditions; PJM Delays Next Power Auction After Prices Spike [PaEN]

-- The Derrick: PUC Judge Issues Emergency Order Appointing Aqua Pennsylvania As Temporary Operator For 6 Rhodes Estate Water Companies [Serious Community Impacts Continue From Conventional Oil Well Spill In Venango County] [PaEN]

-- DEP Begins Accepting Applications For New Methane Reduction Grants To Plug Conventional Oil, Gas Wells Oct. 16 [PaEN]

-- Evangelical Environmental Network Delivers Over 36,000 Comments From Pro-Life Christians To Gov. Shapiro, DEP In Support Of Strong Oil & Gas Industry Methane Emission Controls [PaEN]

-- Beaver County Marcellus Awareness Community Receives Grant To Strengthen Communications and Community Engagement Initiatives [PaEN]

-- Susquehanna River Basin Conditions Trigger Low-Flow Water Use Restrictions At 9 Shale Gas Water Withdrawals In Bradford, Susquehanna, Tioga Counties [PaEN]

-- DEP Invites Comments On Proposed Air Quality General Permit (GP-16) Covering Gaseous Fuel-Fired Spark Ignition Internal Combustion Engines [Copy Of Documents ]

-- Team PA & Clean Air Task Force Convene Leaders To Discuss Challenges, Opportunities Of Industrial Decarbonization; DOE Provides Update On Decarbonization Investments In PA [PaEN]

-- Beaver County Marcellus Awareness Community Urges EPA To Move Forward With Strong Regulation Of Vinyl Chloride Under Federal Toxic Substances Control Act, While Calling For A Ban [PaEN]

-- EPA Files $4.2 Million Settlement Of Air Pollution Violations For 2019 Philadelphia Refinery Explosion, Fire; Public Comments Invited [PaEN]

NewsClips:

-- The Energy Age Blog: ‘Amity & Prosperity’ By Eliza Griswold Thrust Fracking In Washington County, PA Into The National Spotlight