Winners and Losers in America's Gas Game  

                                                                     By ANN PINCA

Last May, UGI Utilities Inc-Gas Division announced a proposed 13% rate increase for residential customers to start this December due in part to expanding U.S. demand for natural gas and the improving U.S. economy. The federal Energy Information Administration (EIA) recently confirmed a move toward higher natural gas prices, stating that more than 90% of homes in the U.S. will experience higher heating costs this winter as a result of higher prices for natural gas, propane, and electricity.

Now wait--higher prices for natural gas, even though it's predicted that the U.S. will be the world's top producer of natural gas and petroleum hydrocarbons in 2013? Haven't we been told that this "clean-burning, abundant American resource" with its low prices is what is helping America's poor and will provide American energy independence? Where does a 13% increase fit into that picture?

IMAGE: ANN PINCA  A rig operates on a Shell well pad in Tioga County.

In a recent Energy Policy Forum post, financial analyst Deborah Rogers points out that if natural gas prices remain low, some natural gas operators will either go bankrupt or stop operations until prices rise since many are producing natural gas at a loss. The recent announcement by Peter Voser, outgoing CEO of Royal Dutch Shell, supports Roger's comments when Voser revealed in an interview that Shell had yet to turn a profit on the company's $24 billion investment into U.S. unconventional shale oil and gas development. Throw in Chesapeake Energy's assets sales to alleviate its debt obligations and its recent lay-off of 800 employees as an additional clue that shale gas right now may not be that profitable.

And so the conundrum - will America have her cheap natural gas and its benefits, or will operators seek higher-priced markets to turn a profit? The Department of Energy's current list of twenty-plus applications for LNG (liquid natural gas) export facilities seems to clearly answer that question.  This should not be a surprise, as Rogers reminded us of the simple purpose of oil and gas industry corporations in an earlier report. Said Rogers, "Oil and   gas companies are in business to extract  hydrocarbons as cheaply and efficiently as possible and get them to the customer that will pay the highest price."

Considered to be the green light for gas exports, the 2012 NERA report indicated that exporting LNG will benefit the U.S., but did also indicate that natural gas prices will rise. However, the report concluded that the economic benefits gained through exports will offset the negative impact of higher natural gas costs. The question is, who will benefit and who will lose? In December 2012, shortly after the NERA report's release, then Rep. Ed Markey, D-Mass, made the following comment concerning the report:

"American consumers and manufacturers will be the losers, as exporting natural gas will increase domestic prices by up to 30 percent, and reduce domestic investment and wages by $45 billion per year by 2030. If exports are approved, the winners are mainly those in the natural gas business and those holding their stock. This report confirms that if natural gas exports move forward on a large scale there will be a massive wealth transfer from working Americans to oil and gas companies."  

A recent interview by Delaware Riverkeeper Maya van Rossum with Elizabeth Stanton, Senior Economist with Synapse Energy, discusses the problems in methodology Stanton's organization found during a review of the 2012 NERA report. Per Synapse's findings, natural gas exports could cost hundreds of thousands of American jobs in all sectors due to rising energy costs caused by exports--hardly a benefit to every-day American citizens.

And so it seems that the promise of benefits for Americans from cheap natural gas and American energy independence may not be the ultimate goal despite what we are told; that instead, gas exports for higher industry profits are the name of the game. As Deborah Rogers so aptly says in her recent post after arriving at that very conclusion:

"What a relief to finally lay to rest that ridiculous and intellectually insulting notion that shales were designed all along to wrap us up cozily in a red, white and blue flag proclaiming energy independence while America dismissed forty years of promoting globalization and thumbed her nose at global markets as she produced ALL her energy needs from...shale oil and gas??? You betcha'!" 

Watch the first segment of the Delaware Riverkeeper's interview with Elizabeth Stanton of Synapse Energy:

Shale Truth Interview series Elizabeth Stanton segment #1 shale gas exports job impact

www.keepitwildrda.org  

A Special Place: The Bob Webber Trail

                                                                   By MANDY MAURER    

Keep it Wild hike #9 was one of the most challenging so far, for this hiker.  For September's hike, we chose the Bob Webber Trail in the Wolf Run Wild Area of the Tiadaghton State Forest, which is on our Special Places list.  

Note to self: next time the trail guide says, "Best suited for fit individual or families with active children," what they really mean is bring an oxygen tank and barf bag!

O.K., so it wasn't that bad, but it was definitely a challenge. I actually had looked beforehand at the guide and the topographical map, so I knew there was a decent amount of elevation to gain but still, somehow, didn't think the over 1,400 feet of elevation change was going to be too hard.

I was wrong.

But once you reach Wolf Run Bald, you soon realize exactly what all the huffing and puffing and uphill climb gets you. The view from this vista is beyond breathtaking. The unencumbered view goes on forever and, just when you think you could see forever, you can make out one more ridge line or mountain top beyond the last.

It is here where I'm reminded of the reason we have the Keep it Wild campaign. In the sunny silence of that outlook, I knew in my heart that the work we do is important. To me--to the men and women who have stood here before me--and most definitely for my son, your daughter, and all the generations to come that will someday stand in this very spot, it is important that it remains as it is so all are able to feel the same sense of awe and wonder.

I hope you enjoy the pictures, but more importantly, I hope to see you at the next Keep it Wild hike.

All photos on this page by Mandy Maurer; see more hike photos here. 

The next Keep it Wild Hike is October 19 at 11:00 a.m., when we hike along the Loyalsock Trail to Smith's Knob.