A top official in the oil industry says Appalachia could end up being a major player in the oil and natural gas industry, even as many in coal country blame President Obama for targeting them with job-killing environmental regulations.
Jack Gerard, the president and CEO of the American Petroleum Institute, says the market is showing that the American public prefers natural gas over coal. The natural gas boom of the last decade has led to an abundant supply of cheap natural gas, which is part of the reason the coal industry has tanked.
After being asked if natural gas will kill coal faster than regulations will, Gerard said the market would decide.
“The oil and gas industry’s position is the market needs to work,” he said. “… Hydraulic fracturing [is] bringing out record amounts of natural gas, so it should compete with everybody else.”
The coal industry has fallen on tough times in recent years with two major companies, Peabody Energy and Arch Coal, both declaring bankruptcy this year.
Many in coal country blame Obama and his environmental agenda for causing the downturn in their economic fortunes. Gerard, a former executive with the National Mining Association, a coal group, said regulations likely play some role in the collapse in coal.
“The artificial putting your finger on the scale, if you will, that’s been happening with some of the regulatory activity, or some of the extreme views that have been taken … I don’t think the government should be in the business of demeaning industry,” he said.
In a veiled shot at Hillary Clinton’s rhetoric about coal earlier this year when she said her administration would put coal companies “out of business,” Gerard added, “I don’t think they should be out there telling people ‘We’re going to destroy your job.’ That shouldn’t be the role of our leadership.”
But Gerard said some of the leaders in coal production, which are getting hit hard now, could end up making major strides in the oil and gas industry in the coming years.
Gerard said natural gas is cleaner-burning and cheaper than coal, and carbon emissions are at their lowest levels in decades due to the boom in fracking. Those positives could lead to the economies of some major coal states turning away from a dirtier-burning fuel that has less demand, he said.
Pennsylvania is already a major player in natural gas production, he pointed out. Growth has slowed there only because of an industry-wide slowdown caused by a glut in American oil and gas supply and the subsequent collapse of energy prices, Gerard added. Ohio’s economy also has grown from fracking and should become a major player in the oil industry in the future.
And West Virginia, like Pennsylvania, could make a lucrative transition from coal to natural gas, Gerard said. The two states sit on top of the Marcellus shale formation, the largest shale region in the United States.
“West Virginia, over time, will be a natural gas state,” he said. “That’s what’s taking place in West Virginia today, and those market conditions will determine that.”
