Tariffs Could Take Air From State Gas Industry
Think Pennsylvania can’t compete with the most powerful? Think again. Pennsylvania’s production of natural gas has surpassed Saudi Arabia’s. According to the BP Statistical Review of World Energy, if Pennsylvania were a country, it would have ranked No. 7 in world gas production last year. This illustrates the enormous value of the Marcellus Shale reserves. Pennsylvania’s record-setting natural gas production — which averaged 15 billion cubic feet per day in 2017, a 3 percent increase over 2016 — gives manufacturers a competitive edge in world markets. Gas is being exported around the world, proving a valuable tool in carbon mitigation and loosening Russia’s grip on the European market — a national security improvement. Nationally, Pennsylvania ranks second to Texas in natural gas production. Pennsylvania’s output last year exceeded some major gas-producing countries, including such OPEC producers as the United Arab Emirates, Oman, Algeria and Nigeria. The United States is the world’s largest gas producer, followed by Russia, Iran, Canada, Qatar and China. Pennsylvania’s gas production is nearly on a par with China’s output. Pennsylvania’s soaring gas production has made the state a beacon for energy independence and prosperity, providing jobs and balancing the intermittency of renewable energy sources of power. Thanks to shale production, the nation last year had the largest decline in carbon emissions in the world. This shows the importance of technological innovation in gas production, through the use of hydraulic fracturing and directional drilling. Today, thanks to better analytics, the cost of shale production continues to fall, providing more gas to make up for the impending shutdown of coal and nuclear plants. But the Trump administration’s tariff policy could wind up making gas production harder — and throw a wrench into liquefied natural gas exports, creating a negative ripple effect throughout the economy. The natural gas and liquified gas industries rely heavily on steel, and that includes specialty steel for pipelines, which is imported from China and other countries. A trade war risks jacking up the price of imported steel, stalling pipeline construction and domestic gas production, while risking billions of dollars annually in potential liquefied gas sales. If China can’t obtain it from the United States, it’s likely to turn to Australia and Canada. The administration should temper its policy. Without robust investment in gas and policies that help boost exports, the economy will not see the full dividends of the transition to natural gas. A lack of leadership will not just hurt Pennsylvania and the nation; it will cost valuable time in the effort to reduce carbon emissions. Yet there are grounds for optimism. Shale production in the Marcellus is growing our economy and providing jobs and cannot be undone with the stroke of a pen. Americans care deeply about economic success and not putting it in harm’s way with costly and unnecessary tariffs. But if enough people make their voices heard, the administration may decide to steer a new course.