New Study Highlights Shale’s “Significant Impact” for Pa.’s Economy

NOTB

Sunoco Logistics’ pipeline infrastructure projects will generate nearly $4.2 billion in economic activity in Pennsylvania, support an estimated 30,000 construction jobs, and generate nearly $62 million in new tax revenues to the Commonwealth, according to a new study released yesterday by Philadelphia-based Econsult Solutions, Inc. The infrastructure projects – driven by shale development – present incredibly positive long-term economic benefits, especially for the Commonwealth’s manufacturing sector and union building trades.

This from Econsult’s press release:

“Our numbers indicate that the Mariner East project will significantly impact the state’s economy, from the jobs it will create and support, both temporary and permanent, to the tax revenues generated for the Commonwealth. … You just don’t see companies investing $3 billion on capital projects in Pennsylvania every day.”

Key report findings:

  • The total potential economic impact in the Commonwealth is estimated to be $4.2 billion, supporting more than 30,100 jobs during the construction period with earnings of $1.9 billion. … The construction costs associated with the Mariner East projects will be approximately $3 billion in Pennsylvania.
  • Construction expenditures for the Mariner East projects will generate one-time tax revenues for the Commonwealth throughout the construction period. … It is estimated that a potential $62 million in total tax revenues will go to the Commonwealth during the construction period of the Mariner East projects.
  • The total potential annual economic impact in the Commonwealth … are estimated to be between $100 million and $150 million, supporting 290 to 440 jobs with earnings of $22 million to $33 million.
  • In addition to the one-time economic impact from construction, service delivery by the Mariner East projects will generate annual ongoing economic impacts within the Commonwealth. … Based on information supplied by SXL, ESI estimated that overall operating costs will be between $60 million to $90 million annually beginning in 2017.
  • Operations of the Mariner East projects will generate recurring annual tax revenues for the Commonwealth. … It is estimated that between $0.8 million and $1.2 million will be generated annually in total tax revenues to the Commonwealth as a result of the Mariner East projects.
  • It is expected that the majority of the potential Commonwealth impacts will take place in the southeastern Pennsylvania region (the City of Philadelphia and Montgomery, Bucks, Delaware and Chester counties) due to operations at MHIC. The pipelines and new operations at MHIC are expected to create and support employment throughout the state.
  • The additional barrels of propane delivered each day to MHIC would boost the region’s reserves, easing supply constraints during the peak heating season.
  • [The projects] will impact the stability of the NGL supply in the region, potentially allowing for new and expanded manufacturing opportunities along the East Coast. … The Commonwealth is poised to regain some of its prominence as a manufacturing hub by adapting to the available supply and proximity of NGLs from the Marcellus shale.
  • With the service provided by SXL through the Mariner East projects, Pennsylvania is positioned to become a large supplier of NGLs and attract businesses that not only use the NGLs in their production, but that support the operations of MHIC.

And here’s what they’re saying about this “game changing” progress:

  • Study Finds “Shale Will Result in $4.2B for Pa.’s Economy”: A consultant hired by Sunoco Logistics Inc. to evaluate the economic impact business related to the extraction of gas from the Marcellus Shale says the company’s investment could result in a $4.2 billion infusion into Pa.’s economy. It also would create 300 to 400 permanent jobs across the state and support more than 30,000 jobs during construction of the terminal facility in Marcus Hook and the Mariner East pipeline. Sunoco Logistics hired Philadelphia-based Econsult Solutions Inc. to study the fiscal impact of the Mariner East projects, which are part of the company’s plans to invest about $3 billion to move natural gas liquids…to the Marcus Hook Industrial Complex. (Del. Co. Daily Times, 2/5/15)
  • Top Labor Organization: Pipeline Project a “Lifeline to Good Union Jobs with Family-Supporting Pay”: A new economic impact study released today on Sunoco Logistics’ Mariner East projects is welcome news for LIUNA pipeline workers who are ready to build this critical energy infrastructure. … The study forecasts that the projects will put nearly 14,000 men and women to work in construction careers and that $4.2 billion will be added to Pa.’s economy. “LIUNA members are trained and ready to build the Mariner East pipelines … As residents of Pennsylvania, our members also welcome the economic benefits, tax revenue and affordable energy the pipelines will bring to the state. The Mariner East pipelines will be a lifeline to good union jobs with family-supporting pay.” … “Mariner East is an opportunity for Pennsylvania to make use of its own domestic resources, create thousands of family-wage jobs, and build our energy future.” (LiUNA release, 2/5/15)
  • Jobs, Investments Flowing into Pa. Thanks to New Shale Pipeline: It’s been calculated that Sunoco Logistics’ Mariner East projects will bring up to $4.2 billion to Pennsylvania’s economy, supporting more than 30,000 jobs during construction phases and about 300 to 400 permanent jobs. … Sunoco has said it will invest about $3 billion into the Mariner East projects. … The projects will also generate about $23 million in personal income tax to Pa. during construction, plus a “secondary potential fiscal impact” for a total $62 million in tax revenues for the state. … The ongoing operations would generate between $800,000 and $1.2 million in annual tax revenue to the state, Econsult found. Sunoco’s plan to bring natural gas from the nearby Marcellus and Utica Shales to Philadelphia is one entrenched in the local “energy hub” chatter. (Phila. Business Journal, 2/6/15)
  • All of Pa. Benefits from Shale Pipeline Projects: Sunoco Logistics’ expansion of its pipeline system moving propane, butane and other liquids from shale wells to the East Coast will pump $4.2 billion into the state’s economy and support 30,000 jobs during construction, a company-commissioned study found. … Most of the economic impacts will be felt in the Philadelphia region, though Marcellus and Utica shale gas producers clustered in Western Pennsylvania are looking forward to moving more lucrative liquids from their wells to the terminal. (Pittsburgh Tribune-Review, 2/5/15)
  • Mariner East Projects to Generate “Widespread Economic Benefits”: The project will generate a one-time economic impact of $4.2 billion to Pa.’s economy, support more than 30,000 jobs, and create about 300 to 400 permanent jobs. … “You just don’t see companies investing $3 billion on capital projects in Pennsylvania every day,” said Stephen P. Mullin, Econsult’s president. … Econsult estimated 30,140 direct, indirect, and induced jobs would be supported during construction, or about 15,070 jobs each year for two years. Of those, 8,465 would be directly related to construction of the pipeline and the Marcus Hook renovations. About 80 percent of those jobs would be in the construction industry. … After the project begins operations, scheduled for late 2016, Sunoco expects to spend $60 million to $90 million annually in operating expenses. (Phila. Inquirer, 2/6/15)
  • Projects Expected to Support More Than 30,000 Jobs: Approximately $3 billion will be invested in Pa. by Sunoco for the transportation of NGLs from western Pennsylvania, West Virginia and eastern Ohio by the Mariner East projects to SXL’s Marcus Hook Industrial Complex. “Our numbers indicate that the Mariner East project will significantly impact the state’s economy, from the jobs it will create and support…to the tax revenues generate for the Commonwealth,” President and Principal of Econsult Solutions, Inc., Stephen Mullin said.  … “It wasn’t long ago the Marcus Hook refinery was slated to be idled and now today we are talking about tens of thousands of jobs as part of a pipeline that will fuel the region’s economy,” President and CEO of the Pa. Chamber of Business and Industry Gene Barr said. “Pennsylvania’s economy needs to harness all of our energy resources with projects like the Mariner East pipeline.” (Pa. Business Daily, 2/5/15)
  • Manufacturers’ Association: Shale a “Game Changer for State’s Economy”: “Pennsylvania’s manufacturing sector is poised for a new era of expanded growth utilizing our abundant energy resources.  New investments like the Mariner East projects demonstrate the growth that can be realized by repurposing the former Marcus Hook oil refinery into a regional energy hub,” said PMA Executive Director David Taylor. “This new study finds that ongoing annual economic benefits from the Sunoco Logistics’ Mariner East projects’ would be between $100 million and $150 million, supporting up to 440 jobs with earnings of $22 million to $33 million. “The Mariner East projects can be the catalyst for a new energy future for Pennsylvania, serving as a magnet for expanded investments along America’s East Coast. The long-term availability of low-cost and reliable gas liquids as a key feedstock for multiple manufacturing processes is a game changer for the state’s economy. These projects are essential for connecting Pennsylvania to a more prosperous future.” (Release, 2/5/15)
  • “Delaware Co. Council has seen the future: Marcus Hook”: The town’s signature business – the iconic Sunoco refinery that was the pride of the Pew family for a century – was padlocked, reduced to little more than a rusting hulk. … That’s when Sunoco Logistics got involved. … Its idea was to retrofit the Sunoco refinery as a storage and transfer site for materials being developed in the state’s booming Marcellus Shale regions. The result was a project called Mariner East, which will soon start delivering butane, propane and ethane from across the state to the Marcus Hook plant. … And it’s not done. Under a project deemed Mariner East 2, it wants to plop a cool $2.5 billion into construction of a second pipeline that would deliver another 275,000 barrels of natural gas liquids. … Eventually, county officials would like to see Marcus Hook become an “energy hub” for the East Coast. … “It’s a win-win for everyone in this county,” said Councilman John McBlain. … For a while, that work ethic was threatened with the loss of hundreds of refinery jobs. Now there is the promise of a new boom – and new jobs – tied to Marcellus Shale. (Delaware County Times editorial, 2/4/15)

Shale is Propelling a Broad-Based Southeastern Pa. Economic Rebirth. View our blog and follow the MSC on Twitter (@MarcellusGas) to find more information on America’s manufacturing renaissance powered by shale.


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