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natural gas

DNC Energy Platform Long on Commands, Short on Hope

By | Energy, Shopfloor Main, Shopfloor Policy | No Comments

The most important sentence on energy in the DNC platform document is the one it took out: this version of the platform no longer supports an “all of the above” energy strategy.

Coal is out. Nuclear energy and hydropower—which aren’t even mentioned once in the platform. This version seeks to pick winners and losers in the energy space. To remake the energy mix the way the DNC platform committee sees fit, regardless of what the market wants.

You know why that’s a bad idea? Because just about every time the government tries to pick winners and losers in the energy space, the government gets it wrong. Like really, really wrong.

Eight years ago, we were told that coal would be the dominant electricity source for the next 50 years, that we would hit peak oil and gas and need to build new natural gas import terminals, that a renaissance of new nuclear power plants was upon us, and that the vehicle fleet would transition to biofuels. Policies were put into place to adjust to those projections. Fast-forward to today, and just about every one of those predictions has been proven wrong. The one thing the government just couldn’t predict was the pace of innovation. And innovate we did: hydraulic fracturing unlocked hundreds of years’ worth of oil and gas supplies right here in the U.S., renewable energy and energy efficient products and solutions are getting cheaper by the day, the vehicle fleet is getting more efficient and electric vehicles are gaining market share, we are about to become net exporters of oil and gas, and advanced coal and nuclear technologies are getting closer to market.

Point being: a commitment to letting the market decide what energy technologies win or lose got us where we are now.  And were we are now is a position of energy strength.

Take natural gas. Manufacturers have historically had an outsized reliance on natural gas. Unlike residential consumers, whose main interactions with natural gas are at the power plant and through their stoves and furnaces, manufacturers rely on natural gas for a wide range of direct and indirect uses. Manufacturers use natural gas as a fuel for direct process uses, such as drying, melting, process cooling, machine drive and refrigeration; as a fuel for direct non-process uses in manufacturing establishments, such as heating, ventilation, HVAC and lighting; as a fuel for indirect purposes, such as boilers used to produce electricity and steam; and as a feedstock in refining, chemicals and primary metals sectors. Domestic natural gas has transformed the U.S. economy, made our companies more competitive, created jobs and put money back in the pockets of working Americans.

Over the next decade, total demand for natural gas will increase by 40 percent. Key drivers will be power generation and manufacturing: the chemical industry alone plans to invest in 264 new projects representing $164 billion in capital investment in the United States thanks to natural gas. U.S. supply of natural gas will grow by 48 percent, more than enough to meet growing demand.

Yet the DNC platform document wants to make it significantly harder to access this energy. It wants to stop energy exploration off the coasts, phase it down on public lands, and send the Department of Justice after fossil fuel companies. All of that will make it substantially harder for manufacturers to access the energy that we need to stay competitive.

The DNC platform committee knows as much about the next eight years of our energy future as it did back in 2008. Case in point: the 2008 platform document claimed, “We know we can’t drill our way to energy independence.” Turns out we actually can, and for the most part, have.

The one thing the platform seems to ignore is innovation. Without innovation—without hope—we’re not going to solve any of our environmental challenges and take advantage of new energy opportunities.

Manufacturers File Brief Supporting Energy Access

By | Energy, Manufacturers’ Center for Legal Action, Shopfloor Legal, Shopfloor Main, Shopfloor Policy | No Comments

Yesterday, the Manufacturers’ Center for Legal Action (MCLA), the legal arm of the National Association of Manufacturers, along with eight other business and manufacturing trade groups, filed an amicus brief supporting Constitution Pipeline in the U.S. Court of Appeals for the Second Circuit. After extensive environmental, safety and economic review, the Federal Energy Regulatory Commission (FERC) had approved the critical energy infrastructure project. However, the state of New York attempted to block the project, undermining the collaborative approval process. Constitution is challenging New York’s denial of its Section 401 water permit for construction of the new natural gas pipeline.

For manufacturers, who use one-third of our nation’s energy, access to abundant and reliable energy sources are essential to our continued growth and ability to compete globally. While states play an important role under the Clean Water Act, they should not be allowed to use their permitting processes, including the issuance of water quality certificates, to unreasonably delay, exact concessions from, or scuttle federally approved projects.

“As some of the largest producers, transporters, and users of natural gas in the country, many of amici’s members are directly affected by the decision under review, which denied a certification necessary for the construction of an important interstate pipeline,” said parties in the brief.  “Further, amici are concerned by the broader impacts of certification denials like this one on the development of much-needed natural gas infrastructure.  Total natural gas demand, driven in particular by manufacturing and power generation, is poised to increase by 40 percent over the next decade, and the U.S. supply is expected to increase by 48 percent over the same period. Further, explosive growth in shale gas requires the construction of new pipeline capacity.  Amici thus have a strong interest in the effectuation of Congress’s policy for the efficient, transparent, and predictable approval of natural gas pipelines.”

Earlier this year, the NAM released a new comprehensive study that reveals how natural gas has strengthened manufacturing and encouraged U.S. manufacturing growth and employment. This study underscores the need for critical energy infrastructure.

“Over the next decade our nation’s demand for natural gas is only going to grow, and much of that growth is from manufacturing,” said NAM President and CEO Jay Timmons. “Our study unequivocally shows that if our growing demand is not taken seriously by policy makers, we will have a serious lack of infrastructure that will jeopardize our growth. Natural gas is responsible for millions of jobs, tens of thousands in manufacturing alone. We can’t afford to let misguided policies rob us of this valuable domestic resource.”

The MCLA serves as the leading voice of manufacturers in the courts, representing the more than 12 million men and women who make things in the United States. The MCLA strategically engages in litigation as a direct party, intervenes in litigation important to manufacturers, and weighs in as amicus curiae on important cases. To learn more about the MCLA, visit our website.

From Poverty to Prosperity

By | Energy, Infrastructure, Shopfloor Policy | No Comments

In a small town once praised for its inspiring ability to overcome obstacles and win support for a high school rocket-building project, there’s another story of opportunity on the horizon. A new pipeline is bringing natural gas to a diverse community in a remote part of the Southwest.

Even after building a 10 megawatt solar facility in recent years, energy was still at a premium, and bringing economic development to Presidio, Texas, has been a real challenge. But as the new pipeline winds its way south, a chili processor is now willing to invest in the city’s future.

Previously, the lack of natural gas had prevented investment, but Don Biad, managing partner of the Biad Chili Company, explained that the pipeline is a game-changer for small manufacturers. “It’s the difference between whether or not our company is profitable or not profitable.”

While this economic opportunity brings a wave of hope, the pipeline also brings environmental protection into view for the local communities because much of the natural gas will power modern electricity just across the border in Mexico. Building the pipeline is also helping to rebuild the railroad—once the lifeblood of trade through the town. That’s because transporting the steel pipes sparked investments in the rails that moved them from manufacturing facilities to the pipeline construction.

Presidio sits where the Rio Conchos joins the Rio Grande in the Big Bend of Texas; as the hardworking people in this international port town like to say, the rivers join us. So when you talk to Brad Newton, executive director of the Presidio Municipal Development District, his can-do-it optimism is anchored in unity.

“We’ve been stuck in the politics of poverty, but now we’re turning the page to the promising politics of progress. And natural gas is our best, new hope for a future—a bright future.”

As Newton put it, “The people of Presidio aren’t looking for a handout; we just want a level playing field in a world economy. That’s what natural gas gives us—a chance to compete.”

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Arctic Lease Cancellation a Cruel Blow to Innovation

By | Energy, Shopfloor Policy | No Comments

Late Friday afternoon, a time particularly convenient for the announcement of unpopular decisions, the Department of the Interior announced it would cancel oil and gas lease sales in the Arctic and not renew existing leases to Shell or Statoil. The move effectively closes the door to oil and gas exploration in these resource-rich areas.

The immediate sting comes from broken promises, as the Administration has done a full 180 on its prior commitment to develop oil and gas on American soil. But the longer-term pain may come from the stifling impact these new barriers will have on innovation.

The Administration made development of Shell’s existing lease as difficult as humanly possible, and Shell stepped up and was able to drill its wells while keeping the environment safe. The new technologies, processes and techniques developed during the Arctic exploration will be used ‎throughout Shell’s operations around the world to make those wells safer.

That’s how innovation happens: you have to do it and learn from it. Yet, today, it became clear that the Administration would prefer oil and gas exploration not be done at all. It’s become an all-too-familiar theme across energy-producing sectors. And it’s the wrong decision every time.

Friday’s announcement spells danger for development promised by the President off the Atlantic coast and for the 2017-22 leasing plan. It could signal trouble for energy export terminals and that still-yet-to-be-approved pipeline from Canada to the United States you may have heard about once or twice.

Manufacturers hope this Administration or a future one wi‎ll come to see the error made today and reverse course. And we continue to call on this Administration to remove barriers to the development of energy, instead of erecting new ones.

Texas Methanol Plant Re-opens Doors Thanks To Shale Boom

By | Economy, Energy | No Comments

LyondellBasell Industries announced recently that it will re-open its methanol plant in Channelview, Texas, just nine years after shutting it down. The company attributes its decision to re-invest in the facility to low natural gas prices spurred by the recent shale boom.

This project is one in a long list of new investments being spurred by widespread domestic development of natural gas.

According to a recent report sponsored by the National Association of Manufacturers, this activity will spur economic growth and job creation for years to come, supporting millions of jobs, increasing household incomes, boosting trade and contributing to a new increase in U.S. competitiveness around the world.

Unfortunately, this growth is not a foregone conclusion. Overreach by state and federal lawmakers and regulators could slow this progress and, in the worst case, stop it.

To realize our full energy potential, we need government policies that support the continued development of oil and gas resources, energy infrastructure projects and manufacturing growth so companies like LyondellBasell can continue to make new investments and create jobs here in the US.

 

Timmons Talks Nat Gas Boom at Shale & Manufacturing Partnership Launch

By | Economy, Energy | No Comments

Today, NAM President and CEO Jay Timmons joined other business leaders at an event launching the American Shale & Manufacturing Partnership (ASMP), a multi-stakeholder initiative focused on shale development and its impact on the supply chain for American manufacturing. As users of one-third of the nation’s energy, manufacturers know well that lower energy prices have a positive ripple effect throughout the supply chain and strengthen our competitive advantage.

Timmons at ASPM Launch

NAM President and CEO Jay Timmons participates in the launch of the American Shale & Manufacturing Partnership. Photo by David Bohrer/NAM.

During a panel focused on shale’s impact on manufacturing, Timmons highlighted the enormous impact that the shale boom is having on the sector, “regardless of sector or size, the shale boom is working for manufacturers. We are making new investments, thanks in part to lower feedstock costs. Many of these investments could take years before they are fully operational, so we’ll continue to see benefits from them well into the future. A recent study conducted by the global research firm IHS projects that the development of shale oil and gas will boost employment by almost 4 million jobs by 2025.”

While noting that manufacturers are seizing this opportunity, Timmons also raised the question on every industry’s mind: Will Washington get in the way? “Unfortunately, this growth is not a foregone conclusion. Overreach by state and federal lawmakers and regulators could slow this progress and, in the worst case, stop it. To realize our full energy potential, we need government policies that support the continued development of oil and gas resources, energy infrastructure projects and manufacturing growth.”

Shale Report Shows Greatest Benefits to Manufacturers are Still to Come

By | Economy, Energy | No Comments

In their latest report on the economic benefits of the shale revolution, the global research firm IHS makes a number of encouraging findings. IHS estimates that the unconventional oil and gas value chain already supports over two million jobs, is responsible for $1,200 in average additional net income per household and is contributing nearly $300 billion to GDP. The most promising finding for manufacturers is that the best is yet to come. Looking at just one manufacturing sector, the chemical manufacturing sector, capital investments in new plants and expansion at existing plants is expected to more than triple in just four years.

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These estimates are not theoretical; they are largely based on real projects that are already under development, some of which are identified in the report. Similar growth is expected in several manufacturing sectors, which collectively will drive more production, create more jobs and further fuel the economy.

US Energy Secretary Cites Benefits of Natural Gas

By | Economy, Energy | No Comments

In a recent interview with the New York Daily News, US Energy Secretary Dr. Ernest Moniz praised the economic benefits coming from production of natural gas in the United States. Citing the $100 billion of capital investment in manufacturing that unconventional oil and gas drilling has stimulated, Moniz stated that natural gas development is “a huge economic benefit.”

As consumers of a third of the nation’s energy, manufacturers could not agree with Secretary Moniz more. According to a NAM-sponsored study released today by research company IHS, increased oil and gas production made possible by advances in shale technology will support nearly 515,000 manufacturing jobs and 3.9 million total jobs by 2025.

Ironically, leaders in New York don’t seem to want to acknowledge the game-changing benefits that come from natural gas development, and continue to impose restrictive state regulations that have hampered development of this abundant resource.

Manufacturers agree with Secretary Moniz that the US should embrace hydraulic fracturing and natural gas production, while continuing to pursue policies that encourage responsible and expeditious development of this abundant resource.

Manufacturers Submit Comments on BLM Fracking Regulation

By | Economy, Energy | No Comments

Last week, the National Association of Manufacturers submitted comments to the Bureau of Land Management (BLM) on the proposed rule to regulate hydraulic fracturing on Federal and Indian lands.

 

As a consumer of a third of the nation’s energy, Manufacturers depend on a consistent supply of natural gas for much of their energy needs. As such, we believe that state and federal governments must continue to pursue policies that encourage responsible and expeditious development of this abundant resource.

Unfortunately, the duplicative regulation proposed in BLM’s rule would harm exploration, development, and production of shale oil and gas, ultimately making it more difficult for manufacturers to remain competitive.

The NAM strongly recommends the BLM withdraw the Proposed Rule and allow the states to regulate hydraulic fracturing in the same safe and secure manner they have done for several decades.

To view the NAM’s Comment on the rule, please click here.

 

Study Shows Fracking Emissions Lower than EPA Estimates

By | Energy | No Comments

API and ANGA released a study today calling into serious question the methane emissions data EPA has been using for unconventional gas wells.  According to the API/ANGA survey, methane emissions from hydraulic fracturing of unconventional gas wells are, in fact, 50 percent lower than EPA’s estimates.

When is EPA going to correct this flaw?  Today’s study is not even the first time EPA’s hydraulic fracturing emissions data has been contradicted by real-world evidence.  The agency has been sitting on an open Request for Correction under the Information Quality Act (IQA) since December 19, 2011. 

That request (filed by the U.S. Chamber of Commerce, available here) included a survey by URS Corp. of approximately 1200 wells, showing that actual gas emissions from the completion of unconventional shale gas wells were more than 1200% lower than EPA’s gas emission estimate.

A coalition of environmental groups filed a detailed opposition to the IQA correction request, complaining that URS had relied on too small a sample.  Well, today’s API/ANGA survey (also conducted by URS) is of 91,000 wells.  That should be more than enough.

Here’s why this matters: researchers, financial analysts and other governmental bodies are relying on EPA’s flawed estimates of natural gas emissions from unconventional shale gas well completions in a number of research reports and policy consideration. And policymakers are ultimately taking into account these potentially flawed numbers when designing regulations.

Read the API/ANGA study here.

Ross Eisenberg is vice president of energy and resources policy, National Association of Manufacturers.