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Senate of Pennsylvania
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted: September 6, 2017 02:31 PM
From: Senator Stewart J. Greenleaf
To: All Senate members
Subject: Urging PA Natural Gas producers to export natural gas to European countries to curtail Russian monopoly
 
I am introducing a resolution that urges Pennsylvania natural gas producers to export natural gas to European countries in an effort to curtail the natural gas monopoly that Russia has on the region.

The Commonwealth of Pennsylvania is fortunate to have one of the most abundant and diverse mineral resource fields in the world, including the Marcellus Shale natural gas reserves. According to the Department of Community and Economic Development, Pennsylvania is the second largest natural gas producer in the nation, and our production has increased more than 2,400 percent in the past five years. The Department of Environmental Protection’s Oil and Gas Annual Report for 2016 showed that a record level (about 5.1 trillion cubic feet) of natural gas was produced in PA, up nearly 11 percent from the previous year.

A study released in March by IHS Markit regarding enhancing PA’s opportunities in the petrochemical and plastic industries stated that “In 2015, the natural gas from the Marcellus and Utica Shale plays accounted for a quarter of all natural gas produced in the United States and is expected to account for more than 40% on the nation’s natural gas production by 2030.” According to the U.S. Energy Information Administration (EIA), Pennsylvania ranked among the top three net energy suppliers in the United States.

EIA’s latest Short-Term Energy Outlook projects that the U.S. will become a net exporter of natural gas in 2017. It further stated that “Abundant natural gas resources and large production increases have created opportunities for U.S. natural gas exports.” A 2017 Gas Market Report (Analysis and Forecasts to 2022) from the International Energy Agency (IEA) stated that “The United States, the world’s largest gas producer, will increase production more than any other country over the next five years, accounting for almost 40% of global output growth.”

Natural gas exports play an important geopolitical role. Russia has been the dominant provider of Liquefied Natural Gas (LNG) to European countries, and much of the LNG that they use flows through pipelines that cross the Ukraine. According to The European Union 2014 Review issued by IEA, “Several European Union countries – Bulgaria, the Baltic states, Finland, and the Slovak Republic – depend as much as 100% on gas imports from Russia as the single supplier.” Russia has demonstrated on a number of occasions its power as a dominant natural gas supplier by shutting off natural gas to the Ukraine, thus threatening the energy security of these countries and prompting efforts to diversify its sources of LNG.

Exports from the U.S. would help to reduce their dependence on Russian gas, weakening the ability of Russia to use energy as a weapon. It would also help to make the natural gas market more global and competitive. In 2016, the first U.S. LNG export terminal was opened and began shipping gas overseas and additional LNG terminals are planned within the next several years. Based on construction of these export terminals, the EIA projects that the U.S. will have the third-largest LNG export capacity in the world by 2020.

In June 2017, the US delivered its first LNG shipment to Central Europe, which arrived in Poland. During a visit to Warsaw, Poland in July to attend a meeting of the Three Seas Initiative, an effort by 12 Central and Eastern European nations to increase trade, infrastructure and energy ties, President Donald Trump stated “We are committed to securing your access to alternative sources of energy, so Poland and its neighbors are never again held hostage to a single supplier of energy.”

Now that Pennsylvania and the Nation has an abundant supply of natural gas and the capacity to export it, we can help Central and Eastern Europe reduce their reliance on Russia while at the same time improving our own domestic economy.

Copies of this resolution will be transmitted to the Marcellus Shale Coalition, the Secretary of the Pennsylvania Department of Community and Economic Development, the President of the United States, the presiding officers of each house of Congress and to each member of Congress from Pennsylvania.



Introduced as SR214