State House Votes to Create LNG Task Force

At about the same time legislation was approved by the state House of Representatives to create a task force to study whether Philadelphia can be a leader in exporting liquefied natural gas (LNG) to other countries, the future of a proposed LNG facility in northeast Pennsylvania has been put on hold.

The House recently approved a bill to create the task force, which will now be taken up by the Senate, where it has bipartisan support and is likely to pass. The bill would create a task force made up of members of the General Assembly, the natural gas industry, Philadelphia building trades, and PhilaPort that would study the economic feasibility, financial impact, and the security necessities involved in making the Port of Philly an LNG export terminal. “It would also study the best way to create a port in Philadelphia and how to overcome the obstacles currently preventing Philadelphia from becoming a leader in exporting liquefied natural gas and report its recommendations to the General Assembly and the administration,” according to a press release. The action comes in response to the Russian invasion of Ukraine and a resulting energy crunch that has sent natural gas and oil prices soaring. President Biden recently announced that the U.S. will work with the European Commission to help those countries wean themselves from Russian natural gas imports and to supply an additional 15 billion cubic feet to Europe this year and an additional 50 Bcf annually. Currently, the European Union (EU) imports 40 percent of its natural gas supplies from Russia. There are issues with these plans, as many environmental organizations argue that natural gas, and all other fossil fuels, should be swiftly phased out to meet climate goals. And LNG production and transportation are running near capacity and it will take time to increase the infrastructure as well as ramp up production.

The proposed LNG facility in Bradford County is an example of the difficulties being faced in building new infrastructure. The plant planned to process natural gas transported to the site by pipeline, convert the natural gas to LNG, and load it for distribution by truck and rail to a proposed LNG export facility in Gibbstown, N.J., near Philadelphia. However, several environmental groups filed legal challenges over the plant’s air quality plan and recently reached a settlement that halts its construction, at least for now. Under the agreement, the developer will allow the current air quality plan to lapse when it expires in July. If the company wants to revive the project, it must start the state permitting process again. The continuing battle over building pipelines to take abundant Marcellus natural gas from Appalachia to other areas continues to be at the forefront of the U.S. energy policy debate. Federal and state regulations and policy and legal challenges from environmental groups continue to hamstring pipeline projects, advocates argue.

EQT CEO Toby Rice has been a leading advocate for increased LNG use as a way to help meet the global energy need while at the same time reducing CO2 emissions, as natural gas burns much more cleanly than coal. However, this will require building more pipelines and export facilities, which are now the main obstacles.