Through the brutally cold winter of 2013-14, consumers in eastern Pennsylvania and New Jersey could have saved as much as $893 million if the PennEast pipeline were in place, according to a new Concentric economic study. This new study reflects the clear fact that critical infrastructure projects are the linchpin to broadening the benefits of Pennsylvania’s shale revolution across our entire economy.
While shale development supports nearly 45,000 good-paying union construction jobs, across the Marcellus region, more jobs are ready to be unleashed as pipelines are built to transport these abundant resources to end-users. Throughout the next two decades, the projected investment of $641 billion in midstream infrastructure growth – projects critical to delivering shale’s cost savings to consumers and American manufacturers – would annually support 432,000 jobs across the U.S. and Canada, according to an Interstate Natural Gas Association of America study.
Pennsylvania’s manufacturing obituary had been written over and over again, but thanks to our ample supplies of cheap and reliable natural gas, our manufacturers are experiencing a revival. Getting these resources – the building blocks of manufacturing – to industrial users and petrochemical producers will allow us to reclaim our global edge in this important and highly competitive sector.
In fact, the new study’s authors further underscored this importance: “Additional natural gas pipeline capacity, such as proposed by PennEast, has the potential to provide significant value to energy consumers in eastern Pennsylvania and New Jersey by lowering natural gas prices during high price periods.”
Here are key findings from the new study:
- $412.5 million in savings that could be achieved by electric consumers when natural gas-fired generation resources set the electric energy price based on lower market area natural gas prices.
- $119.1 million in savings that could be achieved by electric consumers when natural gas-fired generation resources could displace less efficient and more costly oil-fired generating resources, and set the electric energy price based on lower market area natural gas prices.
- $255.6 million in savings that could be achieved by industrial natural gas consumers that are purchasing natural gas supplies at lower market area natural gas prices.
- $106.2 million in savings that could be achieved by Local Distribution Company (LDC) customers when LDC’s have the opportunity to buy more natural gas supplies from lower-cost, local Marcellus Shale production as opposed to often higher-cost Gulf Coast production.
- Energy consumers in eastern Pennsylvania and New Jersey could have saved over $890 million in the winter of 2013/2014 had an additional 1 Bcf/d of pipeline capacity been available.
Concentric’s study comes on the heels of two other recent economic impact studies by Drexel University and Econsult, respectively, focused on the PennEast and Sunoco’s Mariner East pipeline projects. Both studies conclude the infrastructure investment projects will generate billions in economic benefits and support nearly 50,000 good-paying jobs.
Consumer Savings & Manufacturing Revival
- “Lower Utility Rates Help Revive Manufacturing”: This projected savings parallels lower utility rates Luzerne County residents have experienced during the growth of the Marcellus Shale Gas industry in recent years. In a meeting with Times Leader Opinion Board Tuesday, David Spigelmyer, president of the MSC said “gas rates in 2008 were doubled compared to today.” … Lower utility costs could help revive manufacturing, Spigelmyer said. Natural gas is used in every aspect of manufacturing from steel, glass, plastics, fertilizers and pharmaceuticals, he said. To fuel a manufacturing revitalization, Spigelmyer said pipeline construction such as the a $1.6 billion PennEast Pipeline is required. “There is a lot of focus to get the infrastructure built,” Spigelmyer said. (Times-Leader, 3/24/15)
- “Magnitude of Savings Substantial”: If the PennEast Pipeline and its proposed 1 billion cubic feet of natural gas had been in place by winter 2013-14, both gas and electric consumers could have saved a total of $893 million, according to a study conducted by Concentric Energy Advisors, Inc. … “The magnitude of these savings are substantial,” said Toby Bishop, vice president of Concentric. He went on to call the estimated savings figures “conservative,” saying the tallied numbers exclude potential savings that may have been achieved in the electric market on “extreme peak days” when temperatures were coldest and natural gas demand was at its highest — meaning natural gas prices then also were at its highest. (Express-Times, 3/24/15)
- “PennEast Pipeline Would Be Boon” for Consumers: A new study shows natural gas consumers in eastern Pennsylvania and New Jersey could have saved more than $890 million last winter if the PennEast pipeline had been in place. … If the PennEast pipeline had been built, eastern Pennsylvania and New Jersey could have saved a total of $531 million in electricity generation and $361 million in consumer use. (Times-Tribune, 3/25/15)
- Shale is a “Game Changer” for Consumers: The report found the savings on natural gas and electric costs would “have significant value to consumers,” said Toby Bishop, vice president of Concentric, an energy analysis firm based in Massachusetts. … “The potential savings to energy users — our families, small businesses, government facilities and many others — thanks to the PennEast proposed capacity — is a game changer for the region,” said Peter Terranova, chairman of the PennEast board of managers. (The Intelligencer, 3/24/15)
Shale-related infrastructure investments like these continue to bolster Pennsylvania’s economy and our nation as a whole. Policymakers in Harrisburg should focus on growing jobs and finding more ways to harness our abundant natural gas resources, especially through boosting manufacturing – not even higher energy taxes which will make the Commonwealth even less competitive. Become a United Shale Advocate today and join tens of thousands of other Pennsylvanians in letting your voice be heard!