Marcellus find transforms Pa.

Posted: September 29, 2012

By Kathryn Z. Klaber

Philadelphia's access to key waterways and markets - bolstered by the commonwealth's rich natural resources - has long positioned Southeastern Pennsylvania as a powerful economic engine. Philadelphia's piers, and the region's economy, have long been sustained by coal, petroleum, and other energy resources.

The city's natural-gas history is also deep. In 1836, according to the Philadelphia Gas Works, "Forty-six natural gas lights along Philadelphia's Second Street were lit for the first time by employees of the newly formed Gas Works."

Today, thanks to the tightly regulated development of American natural gas, our region's economy is on the upswing.

For consumers, expanded natural-gas production from the Marcellus Shale is leading to lower, more affordable energy costs. And as more clean-burning natural gas is safely produced, more consumer savings will be realized.

Inquirer headlines over the years underscore this shift: "PGW Seeks 12 Percent Rate Hike," June 1990; "PGW Gas Rates To Rise By About 24 Percent," November, 2000; "Lower-income customers especially anxious about PGW hike," October, 2005.

The headlines changed after Marcellus Shale production began in 2005 "Shale gas is shaving bills," December, 2011; and "PGW announces lower natural gas rates," June 2012.

As further proof of this positive impact, the region's largest natural gas utilities - PECO, NFG, PGW, Columbia, Equitable, UGI, UGI Penn, and Peoples - averaged a 41.25 percent cut in rates for consumers from 2008 to 2011, equating to nearly $3,200 in average savings per customer during that period.

We've entered a new chapter of American history. Our nation is now isolated from major swings in natural-gas prices and is dramatically more secure and competitive.

Consumers are clear winners of responsible shale gas development, and so too is our region's manufacturing base.

Philadelphia's refinery sites are experiencing new life that few could have predicted just a few years ago - buoyed by abundant supplies of natural gas, a fundamental building block for a strong manufacturing sector.

Energy Transfer Partner's acquisition of Sunoco and the Carlyle Group's Sunoco investment are proof of the undeniably positive impact that shale-gas development continues to have on greater Philadelphia's economy. Thousands of jobs will be saved. The prospects for leveraging Marcellus Shale natural gas are indeed promising for Sunoco's Marcus Hook refinery, especially in light of this week's announcement, and may well be a lifeline for hundreds of jobs.

Despite the current economic difficulties, the long-term regional outlook is shifting - for the better.

And while we're still in a relatively early stage of Marcellus Shale - considered to potentially be the world's second-largest natural-gas field - the results are staggering. According to the state Department of Environmental Protection, Marcellus production has soared by more than 80 percent, year over year, with 895 billion cubic feet of natural gas produced over the first six months of this year. For perspective, 637 billion cubic feet of natural gas was consumed in the commonwealth in 2010.

From a revenue standpoint - in addition to the hundreds of millions of dollars in state and local taxes produced, as well as infrastructure and road investments our industry has made - Marcellus companies recently paid more than $200 million in newly enacted annual impact fees for local communities, the commonwealth, and other environmental programs.

Marcellus development is creating tens of thousands of jobs at a time when they're most needed. According to state data, nearly 239,000 jobs across the commonwealth are tied to our industry.

At the same time, the federal Energy Information Agency recently reported that, thanks in large part to expanded natural-gas use, carbon-dioxide emissions in the United States are at a 20-year low. More natural gas is being used to generate electricity and fuel our transportation needs, resulting in cleaner air.

What an exciting time for Pennsylvania: More jobs, economic activity, tax revenue, and domestic energy. Better air quality. Lower electricity and heating costs. This historic transformation is happening before our eyes.


Kathryn Z. Klaber is the president of the Pittsburgh-based Marcellus Shale Coalition (MarcellusCoalition.org).

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