Reflecting on 10 Years of Marcellus Shale Development

Pennsylvania Sen. Gene Yaw (R) recently took some time to reflect on the last decade of shale development in Pennsylvania as part of Lycoming College’s Center for Energy and the Future speaker series.

While the first Marcellus Shale well may have been drilled in 2004, the shale revolution really didn’t kick off in Pennsylvania until 2007 or 2008. At one point, Sen. Yaw remarked that if he had been asked 10 years ago if Pennsylvania would be competing with Texas, Louisiana, Alaska and other major oil and gas producing states, his response would have been, “for what?”

As Yaw noted, Pennsylvania has a long history of oil and gas development that includes the first successful North American oil well – the Drake Well that was drilled in Titusville in 1859 – and the world’s first successful oil pipeline – the Tidewater Pipeline that stretched from Coryville to Williamsport in 1879. But the Commonwealth’s more than 70,000 conventional oil and gas wells that pre-dated the shale revolution didn’t yield the high production levels seen in the aforementioned states. In fact, according to the Energy Information Administration (EIA), Pennsylvania was a net importer of natural gas until the Marcellus Shale enabled the Commonwealth’s role reversal to that of a net natural gas exporter and one of America’s top five suppliers of energy.

As Yaw discussed during his presentation, much has changed in the last decade, including adding more than 8,000 shale wells. Today, as the second largest producer of natural gas behind only Texas, 33 of Pennsylvania’s 67 counties contributed to the Commonwealth’s record-breaking natural gas production in October– 15 billion cubic feet (Bcf) per day.

And those production figures are being achieved with fewer rigs and a smaller environmental footprint than ever before, as companies operating in the Marcellus have strived to become more efficient in how they develop the resource. Thanks to multi-well pads and longer laterals, companies use less freshwater in the process and deploy fewer trucks on the roads. It has all added up to an increase in production along with reduced impacts.

Further, Sen. Yaw discussed how the impact fee paid by Marcellus operators has resulted in more than $1.2 billion in local revenue since 2012, with 20 percent of that money going to the counties in his district, including Union County, which has no shale wells.

Sen. Yaw explained this breakdown further in a press release he issued following the 2017 impact fee disbursements,

“For the fifth year in a row, counties and local governments in my legislative district experiencing natural gas drilling are receiving needed financial support through Act 13 impact fee dollars. Bradford, Lycoming and Susquehanna counties ranked among the highest recipients of Act 13 revenues. I cannot remember a time when millions of dollars were sent back to our local governments without a long, involved grant process.”

“Since Union County has no drilling it does not qualify for a share of the Impact Fee revenue; however, it does qualify for $35,358 through the Marcellus Legacy Fund Disbursement.” (emphasis added)

Today, as the Marcellus has become a more established play, the benefits of shale development are moving beyond the well pad to include major infrastructure and manufacturing investments. There are more than $23 billion worth of pipeline projects on the books for the Appalachian region of Pennsylvania, Ohio and West Virginia. The Senator described having a pipeline in his own backyard, while explaining that this is the safest way to transport oil, natural gas, and natural gas liquids (NGLs).

Sen. Yaw also discussed how natural gas is responsible for 30 percent of Pennsylvania’s power generation, with new facilities in Bradford and Lycoming counties running entirely on Marcellus gas. Natural gas was responsible for just one percent of the Commonwealth’s electricity generation in 2000. As EID recently reported, new natural gas-fired power generation is bringing more than $10.5 billion in investments, 12,359 megawatts (MW) of power and more than 6,000 jobs to the Commonwealth.

These new power plants are also having incredible emissions benefits for the state and the United States as a whole, with the Energy Information Administration stating that 63 percent of the 12 percent total reduction in U.S. energy-related CO2 emissions during the last decade have been the result of the shift to natural gas-fired electrical generation. Forbes contributor Jude Clemente recently explained that,

“Pennsylvania’s natural gas boom has had the measurable benefit of lowering total CO2 emissions in the state’s power sector by about 30%.”

And Pennsylvania’s 2016 state greenhouse gas inventory found that overall greenhouse gas emissions (methane, carbon dioxide, and nitrous oxide) fell from 329.1 million metric tons of carbon dioxide equivalent (MMTCO2e) in 2005 to 305.75 MMTCO2e in 2013, or by 7.1 percent. Emissions from electricity generation fell 14.6 percent from 121.56 MMTCO2e to 103.86 MMTCO2e as older facilities retired and more electricity began to be generated from natural gas.

In fact, even New York City – where there’s a ban on fracking – has benefited from using more natural gas, as Sen. Yaw described,

“If you go to New York City they go to great lengths to tell about reduced emissions from switching from using fuel oil. What are they using? Natural gas. It’s reducing emissions.”

The last decade of shale development in the Marcellus has really demonstrated the importance of oil and gas to our society, including in Pennsylvania. The Senator’s closing remarks emulated this and Pennsylvania’s experience with development:

“The oil and natural gas industry is so critical to everything we do, I don’t see how we can survive without it…Economics and the environment are not mutually exclusive.”

And here in Pennsylvania we now have more than a decade of experience to show this.

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