Pipeline developers push to overcome opposition to projects that would carry Pa. gas

STATE COLLEGE, Pa. — Pipeline developers and their allies have to do a better job of building support for Pennsylvania-based infrastructure projects facing opposition across the region, speakers at an industry conference said on Thursday.

One option raised at the annual Midstream PA conference is to convince more people of the collective value of natural gas development, whether it generates power in Pennsylvania or is used to make plastics in Europe.

Another option is to make a fuss about their opponents’ contradictions.

“I am actually contemplating filing a bill which would prohibit the transportation into New York of any gas that’s produced by fracking,” said state Sen. Gene Yaw, a Lycoming County Republican who leads his chamber’s energy committee. New York has banned high-volume hydraulic fracturing and its environmental regulators have blocked a major natural gas pipeline originating in northeastern Pennsylvania.

Mr. Yaw said later that he is not completely serious about the idea, because he does not want to be seen as wasting the legislature’s time, but his riposte got the heartiest applause of the day.

Speakers at the conference repeatedly described opposition to pipeline projects as delaying development of infrastructure that the industry views as vital to creating new markets for natural gas and its related liquids, which will in turn spur higher prices and new drilling.

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Pa. business leaders: Shale-gas pipeline build-out needs to step up

For Braskem America Inc., the choice of where to build a new $500 million polypropylene plant came down to two locations: Marcus Hook or Texas.

The Delaware County site, where the Brazilian company already operates a plant, boasts proximity to the Marcellus and Utica Shale formations, which produce the natural-gas liquids that make a key ingredient in polypropylene. Marcus Hook also is close to Braskem’s customers, who convert the plastic into products ranging from carpet to yogurt cups.

But Braskem decided earlier this year to build the new production unit at its plant in La Porte, Texas. The location near Houston had a critical advantage over Marcus Hook: a ready supply of raw material from a half-dozen nearby Gulf Coast petrochemical operations.

“I was disappointed to choose Texas, but we had to choose the place where we had easy access to feedstocks,” said Mark G. Nikolich, chief executive of Braskem America, based in Center City.

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The Long Term Outlook For Natural Gas

It is hard to overstate the impact of the shale gas revolution in the U.S. In 2005, U.S. natural gas production had dropped below 50 billion cubic feet per day (Bcf/d), and it was widely believed that the U.S. was set to become a growing importer of liquefied natural gas (LNG). In fact, a company called Cheniere Energy built a massive complex at Sabine Pass on the coast of Louisiana to handle what was expected to be a deluge of LNG imports.

Fast forward a decade, and natural gas production in the U.S. has surged by 50%, natural gas prices have fallen from $13 per million British thermal unit (MMBtu) to ~$3/MMBtu, and Cheniere Energy is now exporting LNG. (See How Cheniere Energy Got First In Line To Export America’s Natural Gas). In 2009 the U.S. jumped past Russia to become the world’s top natural gas producer:

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Lobbyists ramp up pressure on energy bill

The November elections are creating a narrow window for Congress to get a comprehensive energy bill to President Obama‘s desk by the end of the year, say lobbyists who are stepping up a full-throttled campaign to do just that.

“Staff has been working all recess … [but] one of the challenges will be the time left in the congressional calendar,” said Greg Bertelsen, senior director for energy and resources policy with the National Association of Manufacturers.

“We have not had the president sign an energy bill since 2007. And it’s long overdue,” he said.

His group, which is the lead trade association for all manufacturing in the U.S., began fanning out during the summer congressional recess to meet with staff and lay the groundwork for a lobbying push when members return Sept. 6.

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