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Economic Fallout from Cuomo’s Decision to Kill NESE Pipeline
Yesterday New York Gov. Andrew Cuomo dropped an economic atom bomb on New York City by rejecting a natural gas pipeline to bring more supplies of clean-burning natgas to NYC and Long Island (see NY Gov. Cuomo Denies Permit for Williams NESE Pipeline to NYC). The reaction has been swift, and negative. NYC’s economic and business leaders understand what’s just happened. They are “alarmed” at what’s coming. They have good reason to be alarmed. NYC is an economic “dead man walking.”
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Several members of the Marcellus Shale industry spoke at a meeting of the Williamsport/Lycoming Chamber of Commerce yesterday, including MDN friend George Stark from Cabot Oil & Gas. George is director of external affairs. At the meeting he said the Marcellus industry has made tremendous strides in the last 10 years and will be around for decades to come. He said, “It’s booming in our area.” George also said Cabot is having trouble filling vacant jobs.
What will Pennsylvania’s future with respect to energy look like 25 years from now? What role will shale gas play? And how will that role affect the state? A group of 35 people began to study that question in the summer of 2017 and the end result, a new study, has just been released (full copy below). According to the study’s results, there are two distinct paths PA can take, resulting in two very different outcomes.
Did you know that at least $70 billion has been spent in Ohio on drilling and pipelines and other infrastructure to support the Utica Shale industry since 2011? No, we didn’t either. That is an astounding number! How about this number: Ad valorem (i.e. property) taxes paid by the shale industry from 2010 through 2018 have totaled ~$132 million. That’s money that goes to fund local schools and towns. Amazing!
Yesterday IHS Markit released a study commissioned by Shale Crescent USA and JobsOhio that finds natural gas produced in the tri-state region of Ohio, Pennsylvania and West Virginia will be 45% of the nation’s production by 2040, up from 31% this year. This is truly big news with lots of ramifications.
According to new data released this week by our favorite government agency, the U.S. Energy Information Administration, Pennsylvania accounted for 25% of new clean-burning natural gas electric power generation added last year.
USA Today recently published an article picked up from the investor website 24/7 Wall Street that analyzes the average cost per kilowatt hour for electricity state by state–all 50 states. It’s not surprising that Hawaii and Alaska are in the top two highest rates in the nation, separated from the Lower 48.
Last November MDN brought you the exciting news that New Fortress Energy is planning to build an LNG (liquefied natural gas) liquefaction EXPORT plant in landlocked Wyalusing (Bradford County), PA (see 
“OK Republicans, time to put up or shut up” (so says the wacky left-wing fringe of the Democrat Party). “You don’t like the Dem’s Green New Deal? You think it’s certifiably crazy (which it is)? Tell us what *your* plan is to save the environment.” Glad you asked! Republicans have one, and it’s called switching to natural gas. Republicans propose to replace Communist-inspired Green New Deal with a Blue Real Deal.
There’s just no getting around the obvious–that the shale industry is once again heading into something of a dip. We’re not just talking about shale oil drillers scaling back drilling new wells in places like Texas and North Dakota. We’re talking about big gas drillers in the Marcellus/Utica who are signaling that 2019 will see less spending and less drilling, although production won’t decline.
The Independent Oil & Gas Association of West Virginia (IOGAWV) held its annual winter meeting on Tuesday and Wednesday. There was a LOT of talk of WV nabbing the much-talked-about multi-billion dollar NGL storage hub project.
West Virginia is in desperate need of jobs following decades of job losses in the coal industry (from 70,000 jobs in the 1970s to 13,000 today). WV has another great natural resource: natural gas. As coal was to WV, natgas now is.
A new report (full copy below) by the U.S. Chamber of Commerce Global Energy Institute (GEI) found that the anti-energy “Keep it in the Ground” (KIITG) movement has prevented at least $91.9 billion in domestic economic activity and eliminated nearly 730,000 job opportunities. In addition, federal, state, and local governments have missed out on more than $20 billion in tax revenue.
What if the shale revolution had never happened? We’d be another $250 billion in the hole with our trade deficit. That’s the finding of a new report released by IHS Markit titled “Trading Places: How the Shale Revolution Has Helped Keep the U.S. Trade Deficit in Check.” The report finds the total U.S. merchandise trade deficit in 2017 was $250 billion lower than it otherwise would have been if the petroleum (crude oil, refined products and natural gas liquids – petroleum liquids separated out from natural gas and also known as NGLs) trade deficit had remained at its 2007 level. Thank God for shale! The report also examines the impact of rising U.S. oil, natural gas and chemicals production on the domestic trade merchandise balance and how the U.S. position in energy and chemicals may evolve in coming years. Interesting stuff.