Marcellus Shale Gas Boom Attracts Foreign Interest

Frackers eyeing the rich natural gas deposits in Pennsylvania’s Marcellus shale have promised that expanded drilling in the state will put the U.S. on the road to energy independence. But according to a report from the Pittsburgh Tribune-Review, plans are in the works to ship much of the natural gas produced from hydraulic fracturing in the Marcellus shale overseas.

The Marcellus shale is one of the world’s largest natural gas deposits, and the arrival of hydraulic fracturing, or fracking, in Pennsylvania has brought a drilling boom to the state. Fracking is drilling technique in which millions of gallons of water and chemicals are injected deep underground under high pressure in order to shake loose natural gas deposits in shale rock formations.

The countries that covet Marcellus shale natural gas include China, which is trying to fuel its rapid industrial growth, as well as the governments of South Korea and India, and companies in Great Britain, the Netherlands, Norway, Japan and Australia. Two companies, Cheniere Energy Partners and Freeport LNG Development are seeking government permits to export liquefied gas, according to the Federal Energy Regulatory Commission. China-based ENN Energy Trading Co. recently signed a memorandum of understanding to send 1.5 million tons of natural gas from Houston, Texas-based Cheniere, according to the Tribune-Review. Two other companies, including Virginia-based Dominion Resources, are expected to seek permission to export liquefied gas soon, the Tribune-Review said.

That’s not sitting well with some critics of the state’s natural gas industry.

“They’re going to come in, extract all this stuff for next-to-nothing, and make global profits off it,” City of Pittsburgh Councilman Doug Shields told the Tribune-Review. “This is beads for Manhattan, in a global sense.”

Paul Cicio, president of Industrial Energy Consumers of America, said exporting natural gas will cost the U.S. jobs because it could cause the price of the commodity to increase.

Governor Tom Corbett, whose successful campaign for the governorship was heavily funded by the natural gas industry, has staked out a neutral stance on the issue of exporting the resource.

“Exporting is generally a good thing, though our first choice would be to use it here,” Patrick Henderson, the governor’s senior adviser on energy matters, told the Tribune-Review.

What the governor doesn’t favor, according to an article, is a state tax on Marcellus shale gas exports. Pennsylvania is the only major natural gas drilling state in the U.S. that doesn’t levy a production tax on the industry, and according to the Tribune-Review, the Corbett administration is resistant to an export tax because it would be difficult “to craft a tax” based on where the gas is used.

In addition to making plans to liquefy and ship Marcellus shale natural gas overseas, foreign companies are also buying significant shares of drilling projects in the state. These companies include Royal Dutch Shell and Statoil in Norway, as well as Mitsui and Sumitomo from Japan, the BP group from Great Britain, Atinum from Korea and Reliance Industries from India, according to the Tribune-Review.

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