Commonwealth Pipeline and exporting liquid natural gas

Editor:

On March 1 it was announced that the 30-inch Commonwealth Pipeline, requiring a 75-100-foot right of way, would be developed running from Lycoming County, Pa. to Maryland.

Initially developers promoted the pipeline as providing cheaper natural gas to people in Harrisburg, Baltimore and DC. More recently, they have admitted that they may export some through the Chesapeake Bay via Dominion’s Cove Point, Md. facility.

Many Pa. property owners leased their land for gas development because they wanted to help the U.S. become energy independent, and to improve national security. Exporting America’s natural gas mocks their sacrifice.

While natural gas prices have dropped to less than $2 per million cubic feet in the US, they are over $14/mcf in Asia. The U.S. already exports natural gas through pipelines to Canada and Mexico, but recently a port in Sabine Pass, La. received final approval to begin exporting liquid natural gas overseas in 2015. Cove Point, Md. and six other ports have already gained preliminary approval.

Exporting allows the price of natural gas to globalize. Chesapeake Energy boasted in their 2010 Quarter 4 report that they expect prices to rise substantially when exporting begins. The US Energy Information Administration (EIA) estimates that prices will increase 54 percent by 2018 due to exporting.

In January, the US Geological Survey slashed by 66 percent their estimates of how much natural gas is recoverable from Marcellus shale. The current estimate, at 2010 rates of consumption, will last us only six years, not 100 years as was originally publicized.

What’s most troubling is that the Commonwealth Pipeline will use eminent domain to take people’s land. Landowners won’t be given the choice of whether or not to have their land used. Is this fair if some, most or all of the natural gas will be exported, driving up prices in the US?

Lawmakers in Oregon don’t think that’s reasonable. In response to an export facility at Jordan Cove, or they have proposed a bill that will either: 1) not allow the facility to export LNG, based on the quest for energy independence; or 2) if exporting is approved, pipelines will not be allowed to use eminent domain — as the gas will not provide public benefit.

The Pa. General Assembly has acted very differently. They have carved out $20 million of the impact fee (right off the top, before counties get any) and $17.5 million of state land gas royalties to increase demand for natural gas in Pa.

Essentially, instead of blocking exportation, or preparing for substantially higher prices in 2015, they are subsidizing the gas industry with incentives for natural gas vehicles and fueling stations, which will increase demand and therefore price.

Final approval to export liquid natural gas from Cove Point, Md. would make “energy independence” a scam and eminent domain for pipelines malicious.

Elaine Lapp Esch

Lancaster, Pa.

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