Additional pipeline capacity would unlock the full potential of natural gas from the Marcellus and Utica shales — most of which underlies Pennsylvania — and lead to lower prices and consumer savings, particularly in the Northeast, according to a study released March 6 by the energy analytics team at S&P Global.
Supported by the U.S. Chamber of Commerce, the study sheds new light on the economic harm to consumers caused by the lack of natural gas pipelines serving Northeast states. Due to pipeline constraints, Northeast residents pay the highest natural gas prices in the country.
“The Northeast has walled itself off from some of the most affordable energy in the world, but it doesn’t have to be that way,” said Marty Durbin, president of the U.S. Chamber’s Global Energy Institute. “Residents in New York and New England are paying the highest energy prices in the country due to the choices of elected officials to stop the kind of pipeline projects that exist almost everywhere else in the country.
“If built,” Durbin added, “businesses and families would see immediate and lasting price relief instead of escalating prices that will only get worse.”
The U.S. Northeast has vast amounts of low-cost gas reserves in the Marcellus and Utica formations in Pennsylvania, New York, West Virginia, and Ohio that are sufficient to meet nationwide demand for roughly 17 years, according to the 66-page Major New U.S. Industry at a Crossroads: A U.S. LNG Impact Study – Phase 2 study.
Expanding pipeline capability between the Marcellus region and New York and New England would reduce natural gas prices by 27 percent in Boston and 17 percent in New York, with peak winter savings even higher, the S&P Global study found.
In addition to documenting the enormous benefits of building natural gas pipelines to serve Northeast states, the new report demonstrates the significant economic and environmental benefits of U.S. liquid natural gas (LNG) exports.
“This report should end any debate: U.S. LNG exports are indisputably in America’s public interest,” Durbin said. “As the Trump administration resumes review of export license applications, S&P Global’s modeling provides a more comprehensive and accurate picture than the flawed assumptions used by the previous administration to justify its halt on export approvals.”
The study found that of the 495,000 jobs supported by the LNG industry, 37 percent — or 183,000 — are in states that do not produce natural gas. Twenty-one states have more than 5,000 jobs supported by the industry.
The analysis also found that U.S. LNG exports help reduce global greenhouse gas (GHG) emissions.
Today, they are displacing Russian gas in Europe and serving growing Asian markets, the study says, noting that if pending U.S. LNG projects were to be halted, 85 percent of the lost volume would be replaced by higher emissions alternatives such as coal, oil, and pipeline gas from Russia and Algeria.
Moving forward with those projects would avoid up to 780 million tons of GHG emissions through 2040 — equivalent to one-third of the European Union’s cumulative energy-related emissions reductions over the last decade, according to the study.
“U.S. LNG exports are clearly reducing global [GHG] emissions today and are critical to future emissions reductions as global populations and economies grow,” said Durbin. “This emissions advantage is likely to expand as American energy companies continue to lead the world in reducing methane emissions throughout the natural gas value chain.”