PA Environment Digest Blog: 6th Oil/Natural Gas Shock: U.S. - European Commission Agreement Calls For Reducing Demand For All Natural Gas And Accelerating Deployment Of Clean Energy Measures

On March 25, the United States and the European Commission came to an agreement on how to address Europe’s need for natural gas through the next two winters by diversifying liquefied natural gas supplies “in alignment with climate objectives” to end Europe’s dependence on Russian fossil fuels. Read more here.

This is the part of the agreement Pennsylvania’s natural gas industry and their politicians want you to focus on.

They want to overbuild permanent natural gas infrastructure and expand drilling significantly in Pennsylvania to lock in a bigger market share using Russia’s invasion of Ukraine as an excuse.

The U.S. - European agreement calls for something much different.

Again… the difference between what the industry wants and what Europe actually says they need.

Reduce Demand For Natural Gas/Transition To Clean Energy

Pennsylvania’s natural gas industry and their politicians want you to forget the agreement has a second major objective-- reduce overall natural gas demand by accelerating market deployment of clean energy measures.

“Immediate reductions in gas demand can be achieved through energy efficiency solutions such as ramping up demand response devices, including smart thermostats, and deployment of heat pumps.

“The REPowerEU plan estimates that reductions through energy savings in homes can replace 15.5 bcm this year [coincidently the amount of natural gas the agreement calls for the U.S. to provide Europe] and that accelerating wind and solar deployment can replace 20 bcm this year, and through EU’s existing plans such as “Fit for 55” contribute to the EU goal of saving 170 bcm/year by 2030.

“As global leaders in renewable energy, the United States and the European Commission will work to expedite planning and approval for renewable energy projects and strategic energy cooperation, including on technologies where we both excel such as offshore wind.

“We will continue to collaborate to advance the production and use of clean and renewable hydrogen to displace unabated fossil fuels and cut greenhouse gas emissions, which will include both technology and supporting infrastructure.” Read more here.

The agreement recognizes that as long as the United States and Europe are locked into oil and natural gas markets and all their price volatility controlled by despots there can never be true energy security-- “stable, affordable, reliable” energy sources.

The joint statement says, “The United States and European Commission confirm our strategic energy cooperation for security of energy supply and reducing dependence on fossil fuels.

“We share efforts to make available stable, affordable, reliable and clean energy supplies to citizens and businesses in the EU and its neighbouring partner nations.

“In this framework, we establish an immediate cooperation to address the emergency energy security objective of ensuring appropriate levels of gas storage ahead of next winter and the following one.

“We will continue our close cooperation on other measures to accelerate the green energy transition, lower energy consumption and reduce dependence on fossil fuels.” Read more here.

Temporary Measures To Increase Production

PA Environment Digest has already reported, the natural gas industry in Pennsylvania has a significant amount of unused production capacity that the companies were not using because they were waiting for higher natural gas prices.

Well… the natural gas price spike is here and there is no limit on what they can charge.

The “slack” in the system includes--

-- Closed-In Wells Ready To Produce: The Independent Fiscal Office reported in the fourth quarter, the unconventional industry was producing natural gas from only 10,322 horizontal wells, when 13,395 wells have actually been drilled. A significant percentage-- but not all-- of the 3,073 wells drilled, but not producing, could be brought online. They could increase production today if they wanted to. Read more here.

-- Industry Hasn’t Used Permits For 9,237 Wells: The unconventional natural gas industry has failed to use 40 percent of the well permits DEP already issued-- 9,237 wells. Priority should be given by the industry to go through those permits first before applying for new ones, after DEP confirms the facts on the ground are still the same. They could start drilling on hundreds of already permitted sites today if they wanted to. Read more here.

The conventional oil and gas industry in Pennsylvania is not a factor in these debate because it produces less than 1 percent of the natural gas in the state and its oil production is refined for lubrication oils not vehicle fuels.

-- 65 Percent Of Shale Gas Leases Not Used In State Forests: DCNR said during budget hearings this year 65 percent of the land already leased for natural gas drilling on State Forest land in 2008 and 2010 hasn’t been developed. They could start drilling on these leases today if they wanted to.

Fix Significant Problems First

And let’s not forget, the U.S. - European agreement views supplying natural gas to Europe as a temporary measure, not permanent.

Any proposal to build out natural gas infrastructure, expand drilling or increasing production should keep that in mind.

PA Environment Digest has already outlined significant changes needed in the way Pennsylvania regulates oil and gas well development and pipelines. Read more here.

Those measures include--

-- Providing Additional Public Safety & Environmental Protection Standards for Pipeline Construction;

-- Reducing Taxpayer Liability For New Abandoned Oil and Gas Wells;

-- Plugging The $10.4 Million Hole In Funding DEP’s Oil & Gas Regulatory Program;

-- Accelerating The Update Of Conventional/Unconventional Drilling Regulations; and

-- Banning The Road Spreading Of Oil & Gas Wastewater.

Click Here for more background.

What The World Is Saying

To see beyond what the natural gas industry is saying to their politicians in Harrisburg, PA Environment Digest is again providing these NewsClips during the fifth week of the 6th Oil/Natural Gas Shock--

-- Republican House Bill Contains Natural Gas Industry Wish List Of Measures To Expand Natural Gas Drilling, Subsidize Pipeline Expansion, Automatically Approve Well Permits, Preempt Local Governments [PaEN]

-- Republican Rep. Fritz Introduces Bills To Unilaterally Amend Delaware River Basin Commission Compact To End Fracking Moratorium [PaEN]

-- Inquirer Editorial: Republicans In Harrisburg Are Using Ukraine To Promote A Climate-Denialist Agenda

-- House Environmental Committee Sets March 28 Meeting To Vote On A Laundry List Of Things Natural Gas Industry Has Wanted For Years [PaEN]

-- Senate Committees To Hold March 29 Hearing On Economic Impacts Of DEP Carbon Pollution Reduction Program Covering Power Plants [PaEN]

-- House Environmental Committee To Hold March 28 Infomercial On Oil & Gas Byproducts - Could We Live Without Them? [PaEN]

-- A Voluntary Settlement Of An EHB Appeal By All Parties Requires Developers Of A Bradford County Liquified Natural Gas Facility To Apply For New Air Quality Permit [PaEN]

-- U.S. EIA Annual Energy Outlook 2022: Renewables Fastest Growing Energy; Falling Costs Means Robust Competition With Natural Gas; Electricity Fastest Growing Energy Source In Buildings [PaEN]

National/International

-- White House: U.S., European Commission Announce Task Force To Reduce Europe’s Dependence On Russian Fossil Fuels [Diversifying LNG Supplies; Reducing Demand For Natural Gas]

-- White House: Joint Statement Between The U.S., European Commission On European Energy Security

-- Bloomberg Green: Biden Eyes Long-Term Hydrogen Breakthrough In Plan To Send Natural Gas To EU

-- The Guardian: U.S. Plan To Provide 15Bn Cubic Meters of Natural Gas To EU Alarms Climate Groups

-- Reuters: Explainer: Could The U.S. Ship More LNG To Europe?

-- WSJ: Europe’s Energy Woes Are Rerouting Global Natural Gas Flows

-- WSJ: U.S. To Boost Natural Gas Deliveries To Europe Amid Scramble For New Supplies

-- Financial Times: EU To Buy Natural Gas Jointly In Push To Reduce Spiralling Prices As U.S. Offers LNG

-- AP: U.S., EU Announce New Partnership To Undercut Russian Energy

-- The Guardian: Energy Efficiency: ‘It’s The Largest, Cheapest, Safest, Cleanest Way To Address The [Oil And Natural Gas] Crisis’

-- Bloomberg Green: The Future Of Energy Will Require Bigger Sacrifice From Citizens

-- NYT: Why The U.S. Can’t Quickly Wean Europe From Russian Gas

-- Reuters: EU Leaders Struggle To Find Short-Term Fix For Energy Market Crunch

-- WSJ: Oil Prices Stay High As Russian Crude Shortage Hits Market

-- Bloomberg: Spiking Oil Prices Starting To Destroy Demand In A World That’s Now More Expensive

-- The Economist: Three Big Uncertainties Cloud The Oil Market

-- WPost: Biden, Europeans To Announce Major Plan To Redirect Natural Gas To Europe

-- Reuters: EU Leaders Agree To Jointly Buy Natural Gas, LNG, Hydrogen Ahead Of Next Winter To Fill Storage From Qatar, U.S., Summit Draft Statement

-- Reuters: U.S. Energy Firms Want Pending Natural Gas Pipeline Projects Excluded From Greenhouse Gas Emission Rules

-- AP: FERC Pulls Back Plan To Assess Climate, Environmental Justice Impacts On Natural Gas Project

-- WPost: WV Sen. Manchin Launches New Push For ‘All Of The Above’ Energy Bill

-- AP: Russian War Shakes Europe Path To Energy Independence, Climate Goals

-- The Economist: The Transition To Clean Energy Will Mint New Commodity Superpowers

-- WSJ: Ukraine War Drives Up Cost Of Wind, Solar Power; Tariffs, Surging Oil Prices Raising Costs

-- NPR: Three Reasons Why Big Oil Can’t Just Drill More To Ease The Pain At The Gasoline Pump

-- WSJ: U.S. Shale Oil Companies Drilling More, But Don’t Expect A Sizable Increase In Production

“American [oil] frackers are raising the number of drilling rigs in oil fields by more than 20%, but don’t expect a similarly sized increase in production.” Companies opening previously drilled wells to production.

-- The Economist: Three Big Uncertainties Cloud The Oil Market - OPEC’s Output; U.S. Shale Oil Production; New COVID Shutdowns In China Reducing Demand

“... analysts and industry insiders doubtful that [U.S.] shale [oil producers] can rise to the challenge.”

-- Financial Times: Top Oil Traders Warn Prices Could Breach $200 A Barrel This Year [$122/Barrel Wednesday]

-- Financial Times: Major Russian Pipeline Fully Halts Oil Exports, Sending Crude Prices Higher

-- Reuters: Biden Admin Confident Of U.S. Oil Production Boost By Year’s End

-- Reuters: Barclays: Regulatory Changes Over U.S. Oil & Gas Leases On Federal Lands Not Hampering Output

-- Reuters: Germany Clinches Natural Gas Deal With Qatar To Reduce Dependence On Russia

-- FreightWaves: U.S. LNG Exports To Europe Increase From 30% To 70% Over Past 2 Months As LNG Prices Spike

-- Reuters: Shell Cleared To Restart Prelude LNG Facility Off Australia

-- Financial Times: Russia Chokes Major Oil Pipeline In Further Threat To Global Supplies

-- Reuters: Canada Plan To Hike Oil Exports Will Not Compromise Climate Goals

-- Reuters: French Energy Company TotalEnergies Aims To Reduce Greenhouse Gas Emissions, Oil Output