Panelists predict bright future for energy industry

Posted November 5, 2015

Rick Shrum
Observer Reporter

Layoffs, low commodity prices, insufficient pipeline infrastructure, fossil fuel prevalence and government regulations were among the clouds that threatened the blindingly bright ballroom.

But ultimately, they didn’t Wednesday night, as three experts spoke optimistically about the future of energy in Washington County, Pennsylvania and beyond.

“We have the ability to rewrite the birth announcement for energy in America,” said David Spigelmyer, president of the Marcellus Shale Coalition, in the opening minutes of a panel discussion focusing on “Energy’s Future.”

The 90-minute session was part of the Washington County Chamber of Commerce’s Executive Insight Series, and was played out before an audience of about 200 in the Hilton Garden Inn, Southpointe. And it, appropriately, was an illuminating 90 minutes that also featured John Pippy, CEO of Pennsylvania Coal Alliance, and Mark Butta, vice president of the Appalachian Pipeliners Association.

Jon Delano of KDKA-TV moderated the breezy discussion, which engaged the attendees and sparked a spirited Q-and-A with them afterward.

Spigelmyer heads an industry group that represents energy producers and their supply chain. He is a strong proponent of natural gas, which is being developed in the Marcellus Shale and the Utica Shale beneath it in a region that includes Washington and Greene counties.

“We’re in this for the long haul,” he said. “Commodity prices are down, but that will change. This industry has created jobs in Pennsylvania. Affordable and abundant natural gas is a stimulus for our region.”

One issue, the panelists concurred, is there is a shortage of pipelines through which the gas and natural gas liquids can flow. A relative inability to move those products has depressed prices and resulted in industry layoffs.

“There’s a glut of natural gas in Pennsylvania,” Spigelmyer said. “We have to build that (pipeline) market and we have to work hard to grow manufacturing jobs.”

Butta, an Ohio resident, likewise pushed natural gas. “I fully believe this industry will be around for a long time,” he said. “Prices will recover. We still have an issue with pipeline infrastructure. Midstream companies have to build that infrastructure. I still see that as a challenge.

“Until we can consume more than we’re producing, we cannot turn this ship around.”

Touting coal during the Obama administration has been a challenge, as well, especially for someone in a position such as Pippy. Yet, the former state legislator said despite tougher environmental regulations that have been proposed to minimize CO2 emissions, he is optimistic about the long-term future of that resource because of need – now and in succeeding decades.

He said 80 percent of mined coal goes to power generation, and with population projected to boom, the world will need twice as much energy by 2030.

“Our biggest challenge is on the regulatory side,” Pippy said. “If we can have reasonable regulations, we can be strong. We need a return to manufacturing, too. Let domestic energy become part of our strategic plan.”

Butta supports a portfolio of energy sources, including Pippy’s favorite.

“I think we need a vibrant coal business,” he said. “It breaks my heart to see what has happened to coal (with mine closures, diminished production and layoffs).”

He cautioned that “we could regulate ourselves out of business. But I don’t see fossil fuels being regulated out for decades to come.”

Spigelmyer stressed the necessity of fossil fuels, including natural gas and coal. “Political correctness could cripple this country,” he said. “If we decide to shut off fossil fuel use for one day, we would have power for 28 minutes.”

The severance tax new Gov. Tom Wolf proposed for Pennsylvania was discussed briefly. Other states adopted a similar tax on natural gas development, with the money being distributed statewide.

Pennsylvania, however, has had an impact fee system in place since 2012 – courtesy of Act 13 – that has reimbursed counties and communities that have hosted drillers. About $223 million was disbursed in 2014.

Washington County, according to Spigelmyer, got a total of $57 million in impact fees from 2012 through 2014.

“Do you think with a (severance) tax, Washington County would get that?” he asked. “Washington County would be a big loser if this tax is enacted.”