The calendar turned to 2018 with good news for American energy, as headlines promoted the promise of increased domestic natural gas and oil production. As the Center for Strategic and International Studies’ Frank Verrastro told the Washington Post: “It’s a total turnaround from where we were in the ’70s.”
America’s shale revolution is expected to continue improving the lives of families and bolstering our nation’s energy security this year, and the pieces are in place for Pennsylvania’s abundant and affordable Marcellus Shale natural gas resource to play a key role. As MSC’s Dave Spigelmyer said in an Observer-Reporter story this week:
“We remain cautiously optimistic about the year ahead. Market fundamentals are steadily improving, with key regional infrastructure projects nearing completion. We’re seeing greater opportunities for end-use benefits with power generation and manufacturing growth increasingly taking hold across the commonwealth. To ensure we encourage more of these local benefits and job growth, we need to work together to advance competitive policies, especially during what will surely be a politically charged election year.”
The basis for much of that cautious optimism came together in 2017 with technological advancements, new pipeline infrastructure coming online and greater downstream opportunities, Spigelmyer told the Pittsburgh Business Times recently.
“We’re far more efficient than we were today, with longer laterals, greater efficiency, additional wells … things that have been enormous to allow us growth in supply even with fewer rigs,” he said. …”There’s certainly been a modernization occurring in our interstate pipelines, which is absolutely critical to the long-term success of our play,” said Spigelmyer.
The MSC was not alone in highlighting the game-changing benefits and opportunities made possible by greater production of clean-burning natural gas in Pennsylvania. A year of good news for consumers, job-creation and growth included:
- The Energy Information Administration announced that Pennsylvania held its title as the second-largest natural gas producing state in the nation in 2016.
- An ICF economic analysis revealed that Pennsylvania natural gas production supports 178,000 good-paying jobs and has contributed $24.5 billion to the state’s economy.
- Revenue collected from impact taxes on Pennsylvania natural gas development crossed over $1.2 billion since 2011, supporting more than 600 grants that funded critical community projects in all 67 counties.
- The University of Pennsylvania reported that thanks to increased natural gas development, residential gas prices in the Commonwealth have declined 40 percent since 2007.
- An IHS Markit study revealed that, Pennsylvania could attract four more ethane cracker plants in addition to Shell’s project in Beaver County and up to $3.7 billion in additional investment.
- The “Forge the Future” initiative launched by Chevron Appalachia and Peoples Gas identified a potential $60 billion economic windfall and 100,000 more jobs over the course of the next 10 years thanks to natural gas.
- The Department of Energy reported that responsible energy production “enabled the United States to achieve the largest drop in carbon emissions of all countries in 2016.” In Pennsylvania alone, natural gas production has risen 380 percent while methane emissions fell 13 percent between 2011 and 2016.
Ensuring all the opportunities that natural gas is creating for Pennsylvanians aren’t squandered will require getting the equation right in Harrisburg, where bad energy policies and proposals to increase or add taxes continue to be discussed. “If we don’t think operators can walk their capital out of Pennsylvania, we are sadly mistaken and, frankly, a little crazy,” Spigelmyer told the Business Times.
Policies must focus instead on enabling pipeline development, encouraging more end-use of natural gas, and attracting the job-creating investments that help families see all the benefits shale can deliver. As Natural Gas Intelligence reported:
“We want to make sure that we’re a capital competitive location for folks to invest in upstream development, to continue to invest in the modernization of our midstream infrastructure,” said Spigelmyer… Industry representatives added that ongoing delays for existing earth disturbance and well permits in Pennsylvania — which the DEP has in some cases taken more than 100 days to issue — remain a top concern heading into the new year. “We have to do a better job when our neighbors are turning those permits around in a month,” Spigelmyer said. “We need better certainty on the permitting side, and I’m confident the agency is working to improve there.”
Here’s what they’re saying about how natural gas will continue to improve lives in 2018:
- Jeff Kotula, president, Washington County Chamber of Commerce: “We look forward to the continued resurgence of the energy industry, especially in exploration/production, as well as the midstream buildout. … I believe that Washington County is particularly positioned to take full advantage of the Shell cracker plant being built in Beaver County due to our proximity to it and other potential crackers in the region.” (Observer-Reporter, 1/2/18)
- Robbie Matesic, director, Greene County Economic Development: The local project that Matesic sees as having a big impact in 2018 is the construction by APV Renaissance of Barnardsville, N.J., of an estimated $700 million gas-fired power plant on the site of the former First Energy Hatfield Ferry coal-fired plant in Monongahela Township. “At peak construction, it will create 500 trade jobs,” Matesic said, adding the experience should be extremely valuable. “It gives some of our labor force the opportunity to build natural gas power facilities, and that’s important, because I think there will be more” built in the area, she said. (Observer-Reporter, 1/2/18)
- Imre Kugler, associate director of plays and basins, IHS Markit: “The past couple of months and the first quarter of 2018, there’s a lot of pipeline capacity coming online,” he said. More pipelines will allow more gas to flow to market. By spring, Kugler anticipates several new lines will send Pennsylvania gas to the Gulf Coast and southeastern United States. (StateImpact, 12/29/17)
- David Ruppersberger, president, Pittsburgh Regional Alliance: Having natural gas liquids storage in the region makes it easier for economic development officials to sell investors and companies on petrochemical plants in the region… Ruppersberger said those leaders consider storage a regional play, and establishing it any in part of the tri-state area, whether it’s Pennsylvania or Ohio or West Virginia, will help Pennsylvania. “We want as much of that (natural gas liquids) used as possible in the region,” he said. (Pittsburgh Business Times, 1/2/18)
- MSC’s Dave Spiglemyer: Shell is building a plant to turn ethane into pellets used to make plastic. Ethane comes to the earth’s surface from wells, along with pure natural gas. Spigelmyer is eager for projects like this that will provide an in-state market for gas. “I drove by that plant a little over a week ago, and I think there’s nine cranes,” he said. Construction is still years from wrapping up. But it’s a sign that there will be a demand for new wells down the road. (StateImpact, 12/29/17)