October 7, 2016

Natural Gas – A Critical “Bridge Fuel” for the American Economy

The Coalition for the Expansion of Pipeline Infrastructure frequently addresses the importance of natural gas – not only as a fuel source, but also as a feedstock for the manufacturing of products and even for the agricultural industry. A recent report by Oil & Gas 360 underscored many of these uses. As the article details:

Natural gas is used in an amazing number of ways. Although it is widely seen as a cooking and heating fuel in most U.S. homes, natural gas has many other energy related and raw material uses. It can be used as a vehicle fuel, it can power pipelines and infrastructure for the purpose of transporting natural gas or oil, and is widely prevalent in industrial use as a raw material.  Natural gas is an ingredient used to make fertilizer, antifreeze, plastics, pharmaceuticals and fabrics. It is also used to manufacture a wide range of chemicals such as ammonia, methanol, butane, ethane, propane and acetic acid.

CEPI members represent a number of these varied industries, from chemical manufacturing to agriculture and natural gas producers. The article goes on to discuss the importance of natural gas in serving as a bridge fuel, easing the transition from higher carbon-emitting resources such as coal to cleaner burning energy producers:

Despite the ubiquity of natural gas through many aspects of our life, natural gas has been likened to a “bridge fuel” for years, a source of electrical generation that can tide us over until renewables are ready to carry the full load. When it is burned natural gas emits about half of the CO2 as coal, making it a preferred alternative to coal, which has long dominated U.S. power grids.

While the final positive impacts of natural gas production and use are clear, the article also cites the role that natural gas plays in the energy industry itself, creating a ripple effect through both the creation of jobs and labor income:

However, natural gas has a multitude of beneficial employment and financial aspects that may keep the wheels turning. From a 2013 PwC report prepared for the API, the accounting firm said: “At the national level, each direct job in the oil and natural gas industry supported approximately 2.8 jobs elsewhere in the US economy in 2011. Counting direct, indirect, and induced impacts, the industry’s total impact on labor income (including proprietors’ income) was $598 billion, or 6.3 percent of national labor income in 2011. The industry’s total impact on US GDP was $1.2 trillion, accounting for 8.0 percent of the national total in 2011.”  Common sense suggests that at $1.2 trillion, politicians would be stupid to over-regulate the industry.

Given the wide range of benefits the article describes, projects like the Rover Pipeline clearly stand to play a central role in access to such a critical resource. CEPI encourages federal regulators to approve the project in a timely manner in order to jumpstart these many impacts.