Pennsylvania Leads Nation in Natural Gas Production Growth

Following a record-breaking year for Pennsylvania natural gas production, the federal government reported this week that Pennsylvania and Ohio led the nation in natural gas production growth last year. As the Energy Information Administration reports, Pennsylvania maintained its spot as the nation’s second-highest natural gas producing state, bolstered by “higher production from the Utica and Marcellus shale plays, which have accounted for 85 percent of the U.S. shale gas production growth since 2012.”

(Source: Energy Information Administration, 4/25/17)

With Pennsylvania at the tip of the spear of America’s energy revolution, it’s imperative that critical energy infrastructure projects are approved, constructed, and brought online. In fact, a new U.S. Chamber of Commerce economic analysis, “What if Pipelines Aren’t Built into the Northeast,” demonstrates the clear need for modern infrastructure to deliver Pa.-produced energy to local and regional consumers.

According to the Chamber’s analysis, blocking infrastructure access to the Northeast– as NY Gov. Cuomo’s administration continues to do – will cost nearly 22,000 Pennsylvania jobs and more than $2 billion in economic activity. As the U.S. Chamber’s Karen Harbert said:

Environmental groups seeking to ‘keep it in the ground’ are fighting to block virtually every project that would bring additional natural gas into in the northeast. As a result, residents in the northeast are paying the highest electricity rates in the continental United States, with no relief in sight if infrastructure is not built. High energy prices are costing the region jobs and income, so maintaining the status quo will be painful.”

Maintaining lower energy prices driven by the shale revolution make U.S. manufacturing more competitive in the global market, research has shown. It’s also helping to boost America’s geopolitical standing among allies across the globe. To reduce its energy dependence on Russia, Poland announced a new partnership with the United States to important American liquefied natural gas. According to the Associated Press, this historic move could open more opportunities for “U.S. gas in northern Europe.”

Here’s what they’re saying about the opportunities natural gas is generating:

  • Pennsylvania Leads in Gas Production Increase for 2016: Appalachia continues to see the highest increases in production among states with natural gas in 2016. Data released Tuesday by the Energy Information Administration showed a 1.2 billion cubic feet per day rise in natural gas production in Pennsylvania and Ohio between 2015 and 2016. That was by far the largest jump in natural gas production, with only Louisiana (0.2 billion cubic feet per day increase), West Virginia (0.1 billion cubic feet per day increase) and North Dakota (0.1 billion cubic feet per day) showing any positive momentum. … Eighty-five percent of the increase in production of natural gas in the entire U.S. came from the Marcellus and Utica shales. (Business Times, 4/25/17)
  • Williams CEO “Sees a Great Deal of Potential In and Under Pennsylvania”: [Alan S. Armstrong ] What an opportunity Pennsylvania has to really build its economy around natural gas. Obviously, getting pipelines built and getting the gas to market is key to that. We recognize that the pipeline issue is both new and old to Pennsylvania. The amount of pipelines that are already in Lancaster County, for instance, would probably impress everybody. We’ve had pipelines here for 40-some years with Williams. … So Pennsylvania and pipelines are not new, but it’s been a long time since we’ve built out major new systems. Transco, a system, that has flowed for over 50 years from the south to the north now is getting turned around, and Pennsylvania is kind of becoming the Texas that we all thought about from an energy standpoint. … Q: Could you foresee a time when gas production in Pennsylvania outstrips all other states? [Alan S. Armstrong] Easily. That’s not a stretch at all. That would probably take five or six years. (Central Pennsylvania Business Journal, 4/27/17)
  • Northeast needs more gas pipelines, says new report: A new report out this week from the U.S. Chamber of Commerce argues the northeastern United States needs more natural gas pipelines. If no new pipelines were built, it could cost the region over 78,000 jobs and $7.6 billion in GDP by the year 2020, the report finds. … The new analysis focuses on New England, which has become increasingly reliant on natural gas for its electricity. At the same time, politicians and activist groups have sought to block expansions of pipeline infrastructure. “Across the board, Northeast natural gas and electricity prices are significantly higher than the rest of the country across all sectors,” says the report. “While several factors play into this trend, the availability of natural gas supply into the region is one of the primary drivers. … “But as the conversation around energy gets more and more politicized, we’re starting to see the consequences of other states’ decisions,” [said Kevin Sunday, of the Pennsylvania Chamber of Business and Industry.] Sunday calls it “absolutely crazy” that gas wells in northeastern Pennsylvania are among the most productive in the world, yet the city of Boston, Massachusetts continues to import liquefied natural gas from overseas. The pipeline constraints create real economic harm, according to the report. If no new pipelines were built, the Chamber of Commerce estimates Pennsylvania would be the biggest loser. “The commonwealth is projected to lose out on nearly $2.4 billion in total GDP over a four year period,” the report says. “Pennsylvania could see thousands of potential jobs disappear across the upstream, midstream and downstream sectors and with them almost $1.3 billion in labor income.” (StateImpact PA, 4/25/17)
  • Hummel Station natural gas power plant to begin operations early next year: Construction of the Hummel Station natural gas power plant in Shamokin Dam is a little more than half complete and on track to begin operating in early 2018. … The 1,124-megawatt plant being built along the Susquehanna River on property owned by Sunbury Generation is about 52 percent complete. About 900 people have been working on the site since last year. … The plant is scheduled to begin supplying electricity to about 1 million customers in the Mid-Atlantic and Northeast in the first quarter of next year. … The Hummel Station will receive gas from UGI Energy Services’ new 34-mile, $160 million gas line that was recently installed. (Daily Item, 4/21/17)
  • NY Post Editorial: “Cuomo’s War on Pipelines is Crushing New York’s Economy”: When Team Cuomo blocked a gas pipeline this month, and another last year, we warned of the fallout. A new report out Monday puts a price tag on such bans — and points out what’s really going on. The study, by the US Chamber of Commerce’s Institute for 21st Century Energy, found that the Northeast (New England, New York, New Jersey and Pennsylvania) is paying more for natural gas, losing tens of thousands of jobs and emitting more greenhouse gases than necessary thanks to “self-imposed” local “pipeline constraints.” The projected loss to the region by 2020 adds up to 78,400 jobs and nearly $7.6 billion in economic activity and “the displacement of $4.4 billion in labor income.” New York alone would see $1.6 billion less in state GDP and the loss of 17,400 jobs. Youch. Already, Northeasterners shell out 29 percent more for gas than the US average and 44 percent more for electricity. … The reason: lack of enough gas pipelines, says the study. … Why do Gov. Cuomo and other pols keep nixing new pipelines? Because, says the institute, they put “the wishes of environmental groups ahead of the needs and interests of their constituents.” The gov blocked the Northern Access project this month and the Constitution pipeline last year, claiming threats to water quality. But these projects would’ve been as safe as (or safer than) countless other water-crossing projects that got approval — and caused no problems — over the years. … It’s pretty obvious that the governor is ignoring New Yorkers’ interests to appease ideologues — specifically, green extremists who’ve adopted a new strategy: Kill off all new pipeline projects to drive up the price of all fossil fuels — and so make it easier for costly “renewables” to compete. … That plan, though, isn’t getting far beyond the enviro-radical Northeast. The “dramatic increase” in US gas and oil production, adds the Institute for 21st Century Energy, “has benefited businesses and consumers” across the nation — with the exception of the Northeast. Pols like Cuomo don’t care. As the study says, constituents aren’t their top concern. (New York Post editorial, 4/22/17)
  • “Poland Signs First Deal to Buy Natural Gas from US Supplier”: Poland has signed its first deal to purchase liquefied natural gas from a U.S. supplier, a step that will help the country’s efforts to cut its dependence on deliveries from Russia, officials said Thursday. The head of Polish gas giant PGNiG, Piotr Wozniak, called it a “historic moment” for the company which is “gaining a new partner in LNG trade” in North America and becoming a “gateway” that opens for U.S. gas in northern Europe. … The country has been seeking to reduce its reliance on Moscow, which has used fuel as a tool to pressure some countries in the region in the past. … The U.S. is rich in shale gas and has been exporting fuel to southern European nations such as Spain and Turkey, but not yet to nations in the continent’s north. (AP, 4/27/17)

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