Sunoco, Shale shine light on need for new energy policy

Guest Column by Kevin Moody

A range of important issues are making Pennsylvania the center of a challenging debate over energy, starting in the east with last week’s announcement of the closure of the Sunoco refinery in Marcus Hook, and continuing to other regions where coal mining and natural gas drilling are making national and regional headlines. The Marcellus shale has put an even brighter spotlight on the commonwealth, and early production rates show a long-term and huge potential for natural gas from this geologic formation.

All of this positive and negative news points to a broader concern: Our nation’s energy policy sorely needs to move in a new direction. Reliable, affordable energy supplies are essential to a viable economy. New jobs are created when energy resources are explored, developed and made into products such as refined gasoline at facilities such as those in Marcus Hook and Linwood. Other benefits accrue to communities where this occurs, and elsewhere. Given the state of the nation, one would think that lawmakers, regulators and leaders in Washington would get it.

You do not have to look any further than the president’s speech about jobs and the economy in Scranton on Nov. 30 to see how hostile our leaders can be toward the development of our oil and gas reserves. Despite the fact that counties immediately west of Scranton are enjoying some of the lowest unemployment rates in the nation due to the surge in natural gas drilling activity, not a single mention of “oil” or “natural gas” passed the president’s lips during this speech.

In fact, in the past three years, the administration has done its best to block the development of new domestic oil and natural gas supplies. It is seeking to increase federal regulation of – that is, slow down or prevent — natural gas and oil development in domestic shale formations that are heavily laden with these resources.

There are similar issues in the attempts to keep the Marcus Hook refinery open through a buyer: A mature facility faces a moving target of environmental regulations from the U.S. Environmental Protection Agency that seems determined to regulate these industries out of business, eliminating thousands of jobs in the process.

Now, to make energy matters worse, the president has delayed until after the 2012 elections a decision on allowing construction of the Keystone XL pipeline between Canada and the U.S., threatening the creation of about 20,000 jobs and preventing the flow of an additional 830,000 barrels of Canadian oil to U.S. refineries on the Gulf Coast.

Although the president’s anti-oil and natural gas actions might sound well to his political base prior to the 2012 election, they put the nation’s long-term economic and energy health at risk.

These vital considerations, however, are not the focus of today’s energy policy debate. They have been supplanted by fear — a campaign of fear of air pollution, fear of water contamination, fear of health effects, and other often unsubstantiated worries that have been become part and parcel of the energy conversation.

The fears are fed by the scare tactics that have become a staple in political and public interest campaigns. Even the president has used fear as a means to avoid making tough decisions that could improve U.S. energy security.

Similarly, anti-drilling groups use fear mongering as a weapon against hydraulic fracturing here in Pennsylvania. They assert that hydraulic fracturing will poison our drinking water and harm human health. In one recent demonstration, protesters even donned cow costumes and claimed that the fracturing process would poison milk supplies at schools.

As long as unfounded and irrational fears overshadow the facts, elected officials will find it difficult to make sound energy policy decisions. They know that misled and frightened voters aren’t going to focus on the benefits of oil and natural gas production, even when it helps their unemployed neighbors find jobs. According to the Pennsylvania Department of Labor and Industry, an estimated 214,000 Marcellus shale-related jobs have been created in the commonwealth since 2008, but even job growth pales in comparison to the irrational fear-of-fracking delirium.

Instead, elected officials will find it politically expedient to throw taxpayer money at so-called green energy companies even if the projects aren’t commercially viable.

There are times when fear is a positive force. It reminds us to buckle our seat belts, blow out candles to prevent fires, and teach our children to look both ways before crossing the street. But it should not be used as the basis for key policy decisions that could frame our economic and energy future.
Kevin J. Moody is vice president and general counsel for the Pennsylvania Independent Oil & Gas Association.