January 26, 2021

Pennsylvania's energy industry shares thoughts on Biden's new policies

Pennsylvania's energy industry shares thoughts on Biden's new policies

When it comes to President Biden’s moves regarding energy policy in his first week in office, color the natural gas and coal industry decidedly skeptical.

Biden made a flurry of executive orders related to energy, including rejoining the Paris climate agreement that then-President Donald Trump had pulled out of, as well as canceling the Keystone XL pipeline that would have carried natural gas from Canada down to the Gulf Coast.

“It’s concerning, what’s driving some of those policies,” said David Spigelmyer, president of the Marcellus Shale Coalition. “The Keystone XL, within hours, he halted a thousand jobs in the Northern Plains. That’s significant and important. It’s not just the jobs but the energy.”

Spigelmyer said the transition away from fossil energy was “hugely shortsighted” if it doesn’t include natural gas that has helped Pennsylvania and the nation reduce greenhouse gas emissions.

“Countries that have made major changes in climate are countries that have the availability of natural gas,” Spigelmyer said. “Our changes haven’t been made positively in spite of natural gas. They’ve been made because of natural gas.

Spigelmyer said that an over-reliance on renewable energy led to brownouts and blackouts with California’s power grid last year when there was a major heat wave. He said that it wouldn’t have been as bad if natural gas had been there to support the renewables.

“There’s no better partner for renewables than natural gas,” Spigelmyer said.

He said cutting down on natural gas, including liquid natural gas, will harm lower-income people who will be forced to pay more for heating and electricity, as well as consumer goods.

“The people that get hurt the most are those on fixed incomes and those at lower incomes, the very constituency the president is trying to embrace and help,” Spigelmyer said. “The unintended consequences are higher energy costs.”

For PIOGA, the independent oil and gas producer’s trade association, the work of engaging with policymakers about American-made energy continues. PIOGA President Dan Weaver said it will continue to promote the benefits.

“The facts do not change with a change of administrations in our nation’s capital. Natural gas will continue to be the bridge fuel essential to supplementing renewable energy well into the future, and its abundance in this country ensures it will a be a reliable, long-term, low-cost source for heating and electricity. Similarly, there is no substitute for oil as the fuel refined into gasoline, diesel and jet fuel that keeps the economy moving forward,” Weaver said.

Going back into the Paris climate agreement isn’t a popular move in the coal industry. Rachel Gleason, president of the Pennsylvania Coal Association, said that the accord commits the U.S. to meeting impractical greenhouse gas goals while at the same time not holding China accountable.

“Killing fossil fuels will kill jobs and our economy while increasing the economic burden on American households. Massive subsidies for wind and solar that are paid for by higher taxes come at a cost to everyone – businesses and consumers – and risks our energy independence, security and grid reliability,” Gleason said. “It is untenable to ask people to reorganize our entire economy and mandate that taxpayers pay trillions of dollars to support these efforts.”

The previous administration had made much about its support of the coal and natural gas industries, releasing them from some regulations and planning to loosen others. But while Trump was supportive of the energy industry, it wasn’t enough to stem the economic downturn in the coal industry that has led to bankruptcies, closings and layoffs. Nor has the oil and natural gas industry, particularly in Appalachia, been able to move oil and gas prices to levels that would allow for further growth in production. Pennsylvania’s estimated impact fee collection, which depends on natural gas prices as well as drilling, is expected to be down significantly in 2020.

One natural gas company CEO, Nicholas J. DeIuliis of CNX Resources Corp., told the Business Times that politicians should focus on letting the energy and manufacturing sectors do what they do best.

“Let the competitive market, innovation, common sense, and the American worker dictate how this country procures its affordable, reliable and secure energy,” DeIuliis said. “Domestic energy drives domestic manufacturing, and manufacturing drives our quality of life.”

But environmentalists have cheered Biden’s actions so far.

Rob Altenburg, director of PennFuture’s Energy Center, said Biden had a good clear, beginning but that more needed to be done. He pointed to Biden’s net-zero emissions by 2035 from the power sector.

“One thing we know for sure is that natural gas generation isn’t going to get us to that goal,” Altenburg said. “We need significant investments in clean renewable energy and energy efficiency, coupled with programs like Gov. Wolf’s cap-and-invest rule that caps carbon pollution from the generation industry.”

He said that there needed to be investments in the communities that are going to be impacted by any closings in the coal industry.

“At minimum, this new administration is a breath of fresh air, and we are hopeful that real change is coming after four years of rollbacks, reversals and inaction,” Altenberg said. “Despite that, time will tell as to the Biden administration’s true impact on the air we breathe, the water we drink and the climate we all rely on for survival.”