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Pipeline opposition impacting economic development, manufacturers say

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Pipeline opposition impacting economic development, manufacturers say

Manufacturingcompanies, which depend on natural gas as a fuel and feedstock, plan to ramp uptheir advocacy efforts on behalf of pipeline projects, especially in the Northeast.

Havingwatched pipeline opponents cripple pipeline projects working through permitting,a group representing the manufacturing industry said it intends to argue for theeconomic and environmental benefits of the infrastructure.

"Thereis a clear need for new pipeline," Ross Eisenberg, vice president of policyfor the National Association of Manufacturers, said during a May 3 conference call."[Gas] supply will keep pace, and then some, but the midstream piece is missing."

Eisenberg,speaking on a call to discuss a study about gas pipelines released by the associationand IHS, said manufacturing companies around the world are moving operations andinvestment dollars to the U.S. because of a steady supply of affordable gas andelectricity. He forecast continued growth, but said the forces trying to stop newpipeline construction could affect international competitiveness.

Eisenbergobserved that resistanceto pipelines was acute in the U.S. Northeast, while the Gulf Coast is building infrastructureand manufacturing is surging. "The Northeast is one of the most difficult placesto access energy in the United States," he said.

In recentweeks, New York blockeddevelopment of the Constitution pipeline by withholding a Clean Water Act permitin an April 22 decision, Kinder MorganInc. shelved developmentof the Northeast Energy Direct pipeline project after running into commercial difficultiesand environmental and landowner opposition, and several other pipeline projectshave run into delays. Eisenberg told the story of one manufacturer that has gascompressed and then trucked to its facility at "great expense for them"because no pipeline exists.

Talkingabout the Northeast and the Constitution case, Eisenberg said that "we arevery disturbed that what should be a relatively simple infrastructure approval processwas completely held up, essentially, by the not-in-my-back-yard crowd, and [this]is preventing the Northeast United States from taking advantage of a resource thatis so close."

Joe Eddy,president and CEO of Eagle Manufacturing Co., said Northeast pipeline constraintscan hurt companies such as his that are based in the middle of the Marcellus andUtica shales, as production gets stifled in response to depressed regional prices.Efficient gas markets are especially critical to the chemical manufacturing sector,he said.

"Themore natural gas we can produce and supply, the more natural gas liquids we canproduce, which gives us the ability to grow the chemical industry, and that growth… is quite significant," Eddy said. One of the largest employers in the NorthernPanhandle of West Virginia is Eagle Manufacturing, which makes safety and hazardousmaterial-handling products.

Duringthe call, Eisenberg made sure to note that his association supports renewable energyas well as gas. "We need all of it," he said.

In thestudy, "The Economic Benefits of Natural Gas Pipeline Development on the ManufacturingSector," IHS found that shale gas production and lower gas prices have contributed$190 billion to real gross domestic product, stimulated 1.4 million additional jobsand added $156 billion to real disposable income. IHS forecast steady supply growthbetween 2016 and 2025, keeping pace with domestic demand.

"Therapid growth of [gas] production in some of the major shale plays has created bottlenecksin some parts of the U.S. where there is insufficient transmission pipeline capacityto move the [gas] to market," according to the study. "IHS estimates thatapproximately $25.8 billion was spent in the U.S. in 2015 to construct 6,028 milesof new natural gas transmission pipelines, resulting in a temporary increase inemployment of 347,788 jobs, with 59,874 in the manufacturing sector. Similarly,the construction spending is expected to have contributed $34 billion to GDP and$21.9 billion to labor income in 2015."

"Ina nutshell," the study said, "the combination of increased access to shalegas and the transmission lines that move that affordable energy to manufacturersacross America meant 1.9 million jobs in 2015 alone."

U.S.consumers used over 24.4 Tcf of gas in 2014. About 7.6 Tcf of that gas, or 31.3%,went to industrial users, and manufacturers make up about 80% of that industrialdemand, according to U.S. Energy Information Administration figures cited in thestudy.

The NaturalGas Supply Association supported the study's conclusions, noting that low gas priceshave helped put money in the pocket of American consumers. "What makes thereport so valuable is that it details how much-needed pipeline development contributesto that economic success story," NGSA President and CEO Dena Wiggins said ina statement. "Demandfor natural gas is growing, as is natural gas supply, but we must have the rightpolicies to support infrastructure to connect the two."