Pennsylvania pipeline capacity problem persists

(The Center Square) — Pennsylvania’s influence on national and global energy markets has grown in recent decades, but oil and natural gas advocates warn that could change.

The American Petroleum Institute’s annual State of American Energy address focused on production, national security, and improving infrastructure.

“We produce more energy than any country in the world,” API President and CEO Mike Sommers said. “This benefits our economy, our national security and is our insurance in a volatile time. This is our American energy advantage. It didn’t happen overnight, and it can’t be sustained without the right policies from Washington.”

In Pennsylvania, the industry has also argued that they need the right policies from Harrisburg. Long-running complaints have centered on the trouble with getting permits — not just for drilling on state-controlled lands, but also to build out pipeline capacity. Capacity may explain why Texas and Louisiana have continued to increase natural gas production as they expand pipelines, while Pennsylvania’s production has stagnated.

Though red tape has been a factor, a significant drop in natural gas prices has driven down impact fee revenues in the state by $105 million last year.

Opponents of natural gas who want to promote solar and wind in Pennsylvania, API argued, missed the bigger picture.

“The environmental benefits of shipping U.S. liquefied natural gas to other countries is tremendous,” Sommers said. “Usually, we are replacing sources of energy that are dirtier than natural gas.”

Pennsylvania has played a significant role in transitioning to cleaner forms of energy.

“The Appalachian-producing basin is such a tremendous asset to the United States and it’s really led the way in displacing coal,” said Dustin Meyer, senior vice president of policy, economy, and regulatory affairs for API. “The resource is enormous. Unfortunately, what you’re starting to see is that it’s difficult to build additional pipeline capacity to move that resource out of the region.”

The struggles in Pennsylvania and the Marcellus Shale region, he argued, show the need for policy changes.

“That’s a reminder of the need for smart, consistent permitting reform to make sure that we can build those sorts of energy infrastructure projects that are so sorely needed,” Meyer said, pointing to the Mountain Valley and Atlantic Coast pipeline projects as attempts to move gas to other markets. “For that region, the permitting question is particularly important.”

Nor will that question fade anytime soon. PJM, the regional transmission organization that coordinates electricity markets in a 13-state area that includes Pennsylvania, published a long-term load forecast expecting demand growth of 2.4% for net energy use over the next decade.

“Total annual energy use throughout the PJM footprint is expected to increase nearly 40% by 2039, from 800,000 gigawatt-hours (GWh) to about 1.1 million GWh,” PJM noted in a press release.

“This forecast reflects the accelerated growth that we discussed with our stakeholders throughout 2023, driven by the electrification of multiple sectors combined with consumer demands for technology,” said Kenneth S. Seiler, Sr., vice president for planning at PJM. “It also underscores the need to maintain and develop enough generation resources to serve that growing demand."