Natural gas industry leaders said the Appalachian region’s abundant Marcellus supply could help alleviate an energy crunch in Europe resulting from the Russian invasion of Ukraine but that regulatory policies are hindering efforts.
“America is the world’s largest producer and exporter of natural gas, with the Appalachian Basin alone representing the third largest producing region in the world, positioning our industry to assist our strategic trading partners and meet our own energy demands,” Marcellus Shale Coalition president Dave Callahan said in a post on the MSC website.
U.S. exports of liquefied natural gas (LNG) have been increasing, and the U.S. is poised to be the world’s biggest exporter in 2022, according to the U.S. Energy Information Agency. That supply can be used to help ease the energy crunch in Europe, which depends on Russia for more than one-third of its natural gas supply.
Even though several new LNG export terminals have been built in recent years, LNG exports were already near capacity before the invasion began, and industry officials and legislators argue that the federal government needs to reduce the regulatory burden on pipeline development to address challenges that have slowed or stopped them. The move to decarbonize energy sources and reduce fossil fuel use has also played a role, even though carbon emissions from natural gas are less than half of that from coal.
“The United States – particularly Pennsylvania – has the supplies and capabilities to help meet the demand of Europe and other regions, but is facing unnecessary resistance at both the federal and state level to meet the country’s energy production potential,” said Dan Weaver, president of the Pennsylvania Independent Oil & Gas Association (PIOGA), in a statement. In addition to regulatory issues, he pointed to the state’s move to join the Regional Greenhouse Gas Initiative.
In a letter to President Biden, the Natural Gas Council urged the administration to support the natural gas industry to allow it to continue to grow and modernize its infrastructure.
Appalachian gas companies have been holding production at maintenance levels due to low prices during the pandemic, and even as prices have risen have been slow to add well capacity in order to focus on their balance sheets and shareholder dividends.
Baker Hughes’ most recent North American oil and gas rig count was 867, up from the bottom of the pandemic, but well off the all-time high. There were 36 well rigs operating in the Marcellus, less than one-third than at the height of the shale gas boom. In addition, the Pennsylvania Environmental Digest reported that producers in the state had not drilled 40 percent of the wells for which they had permits, with more than 9.000 not developed.
In addition, drilling wells and building pipelines takes time, so production and exports cannot be significantly increased immediately.
“We cannot turn on a switch and instantly produce oil and natural gas,” Weaver said. “We can, and must, however, do much more to help both our country and other nations that need reliable energy and are at the mercy of countries such as Russia.”