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Biden's LNG Export Embargo Hurts Farmers, Too

Salena Zito on

LEBANON, Pennsylvania -- You may not be aware that there's a symmetry in Pennsylvania between farmers and the natural gas industry. But just walk into the Keystone Pork, Poultry Progress and Mid-Atlantic Manure Summit here at the expo center in Lebanon County, put your hands on the propane-shaped stress ball, and you'll start to understand it.

"Kind of tells you everything," said Chris Herr, the executive director of PennAg Industries Association, who was holding up the merchandise everyone received when they walked into the door.

Natural gas development over the past 15 years has had a significant impact on agricultural stakeholders in this state. The partnership between two leading economic sectors in this state, natural gas and farming, has led to farmers receiving royalty payments from natural gas companies in return for leasing out the minerals found on their lands.

So when President Joe Biden announced at the end of January that he was pausing all exports of natural gas, his decision not only chilled the producers and employees in the industry but also equally distressed American farmers. This was particularly true of those here in Pennsylvania and neighboring Ohio, where hundreds of millions of dollars last year alone went to farmers and landholders who hold leases.

Herr said this source of income for farmers in the past few years here in Pennsylvania has been a game changer, "Especially for family farms. They are now provided a source of revenue to expand their operations, or invest in new equipment or technologies, and sometimes just to save a farm on the brink."

Jonathan Fritz, who has served in the Pennsylvania House of Representatives since 2017, said what he has seen in the rural swaths of Wayne and Susquehanna counties thanks to the natural gas industry has improved his constituents' overall quality of life, and "it has also contributed to young people to stay here rather than move away because of new opportunities."

 

In 2021, the Pennsylvania Independent Fiscal Office reported personal income growth was higher in shale-producing counties compared to non-producing counties.

The American Exploration and Production Council recently conducted a survey of Pennsylvania and Ohio gas-producing members of their trade organization to see the number of landowners receiving royalties from production on their properties -- mostly farms -- and then took that data and estimated the share of gas that is exported as liquid natural gas. ?

A royalty payment is traditionally a percentage share of the production paid from a natural gas-producing well paid to families, farmers and landowners.

The survey omitted the billions gas companies pay in taxes, fees and charitable contributions to state and local entities as part of calculating the scope. The eight companies who answered the survey represent 93% of Pennsylvania production and 68% of all Ohio production of natural gas for the calendar year 2023.

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