This month marks the one-year anniversary since Russia launched its horrific invasion of Ukraine. The humanitarian cost is staggering: tens of thousands of dead and wounded, a mass refugee crisis, and historic cities laid to rubble.
Russia’s aggression and its weaponization of energy also left Europe in critical need of natural gas. Even during a fairly mild winter this year, families and businesses paid sky-high costs as countries worked to replace demand for Russian gas with limited supply. Europe was one prolonged cold snap away from another disaster.
The United States has the energy resources to come to Europe’s aid, as we have done previously, but we need leadership from policymakers to do it.
Failure to export American natural gas to Europe, replacing Russian gas, has major costs for the global economy. Last fall, Europeans were paying ten times more for natural gas than Americans. Regulators curtailed use of gas by manufacturers in order to ensure homes and schools could be heated. In other cases, manufacturers that had supply could not afford the cost and have suspended operations. Some of these are leading chemical, glass, and automotive manufacturers who have pledged to relocate investment out of Europe entirely. Moreover, natural gas is a key input for ammonia and fertilizer which are experiencing cost increases and production delays, threatening to exacerbate global food insecurity.
Even before it became apparent Russia was funding its war machine through its energy industry, there was good reason to swap in American energy. Russian energy production is notoriously lax on environmental standards. U.S. Energy Secretary Jennifer Granholm said Russia’s energy production is “the dirtiest on earth,” with fugitive emission rates far exceeding U.S. levels. In contrast, America and Canada have among the most stringent production standards globally – not to mention that the U.S. has led the developed world in reducing greenhouse gas emissions over the past two decades.
Even better, gas produced from shale plays in Appalachia, like the Marcellus shale in Pennsylvania, Ohio and West Virginia, has the lowest methane intensity of any basin in the world, according to one analysis from an environmental think tank. The federal Energy Information Administration also notes that gas produced from the Marcellus is the most efficient in terms of volume of gas produced per drilling rig. In other words, because of private sector leadership on emissions and efficiency, our shale gas resources are the most prolific and sustainable in the world.
American gas shipped on a liquefied natural gas tanker is, perhaps surprisingly, even more sustainable than Russian gas delivered via pipeline. A Department of Energy study showed Russian pipelines leak methane at six to seven times the rate of LNG cargoes from the U.S.
It is true that prices increased because of international energy market turmoil and the effects of supply chain and investment curtailments during the pandemic. But recently, drillers have stepped up production in response to high prices, and forecasts show energy costs are declining in Pennsylvania and the surrounding region.
Markets abroad are also hungry for American energy, but we simply lack the infrastructure to deliver it. Lawsuits and burdensome regulatory delays are getting in the way of modernizing our energy infrastructure and improving our energy security. Addressing the challenges of fighting climate change while ensuring abundant, affordable energy will only happen when policy promotes innovation and building new infrastructure in the United States. A more welcoming tax and regulatory environment, including streamlining permit reviews and facilitating construction of infrastructure, will help us not only meet the energy needs of our allies abroad, but welcome increased investment domestically as foreign manufacturers seek more stable and reliable jurisdictions to do business.
Pennsylvania’s energy assets have led our nation through every major energy transition in the nation’s history, from the first oil well drilled in 1859 to the first commercial nuclear power plant nearly a century later. Our diverse energy resources, talent and advanced manufacturing sector can help a growing world address climate change and improve energy security, while reducing reliance on energy from hostile actors like Russia. It’s time to build.
Kevin Sunday is director of government affairs, Pennsylvania Chamber of Business and Industry.
Publication: Reading Eagle