How Energy is Powering Pennsylvania’s Economy

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Pennsylvania has a long history of energy production and innovation. Coal mining first began in Pennsylvania in the mid-1700s. Since then the state has been one of the nation’s leading producers of coal. In 1859, Edward Drake drilled the world’s first commercial oil well in Titusville, Venango County. George Westinghouse began his electric company in Pittsburgh in 1886. In addition, the state was the site of the world’s first, full-scale commercial nuclear power plant.  

For more than a century, the energy industry has powered Pennsylvania’s economy generating good jobs and contributing significantly to local communities across Pennsylvania.

According to the Pennsylvania Independent Oil and Gas Association, 339,000 Pennsylvania jobs are connected to the state’s energy development industry. Those workers typically make $20,000 more a year than the state’s average wage earner.

While Pennsylvania will always be known for coal production, thanks to technology advances in finding and producing natural gas, the Commonwealth has entered a new era in energy and plays a key role in meeting the nation’s – and the world’s — energy needs.

Pennsylvania sits within the third-largest natural gas and natural gas liquids (NGLs) field on the planet. According to the U.S. Energy Information Administration, the state’s marketed natural gas production reached 6.2 million cubic feet in 2018, making Pennsylvania the nation’s second-largest natural gas producer after Texas. In addition, Pennsylvania is also ranked among the top three energy exporters in the country. The American Petroleum Institute estimates that the natural gas and oil industry contributes more than $44 billion to the state’s economy.

Natural gas impacts many aspects of Pennsylvania’s economy, including heat, power, manufacturing and electricity generation. In addition, natural gas and natural gas liquids (NGLs) like ethane and propane can be used for the generation of heat and electricity, transportation fuel and feedstock for the manufacturing of plastics and chemicals.

To capitalize on Pennsylvania’s vast energy resources, Royal Dutch Shell is investing $6 billion in an ethane cracker facility in Beaver County—the largest single investment in Pennsylvania since World War II. The ethane cracker will generate 6,000 jobs during construction and more than 600 permanent jobs once in operation. An independent study by IHS Markit determined the region could support the development of an additional four ethane crackers.

To ensure the state is focusing on the energy opportunity at hand, Governor Tom Wolf created an Office of Energy within the Department of Community and Economic Development. Led by Executive Director Denise Brinley, the Office is responsible for aligning energy efforts and developing long-term energy strategies for Pennsylvania. Pennsylvania House leadership also introduced Energize PA earlier this year, a pro-growth, pro-jobs legislative package designed to create jobs and connect residents and businesses to the state’s abundant natural resources.

But much more needs to be done. Forge The Future, an initiative by Pennsylvania businesses to help unlock the economic potential of the state’s world-class natural gas reserves, invested in a state-wide econometric study by McKinsey.  The goal was to establish a fact base and strategic directions for economic opportunities resulting from the state’s natural gas reserves – by creating in-region demand for the resource. It revealed an unprecedented opportunity to create an economic growth agenda for Pennsylvania: the potential to add $60 billion in Pennsylvania GDP growth, more than 100,000 jobs and billions in state tax revenue.

With such an unparalleled opportunity before us, Pennsylvania and its elected leaders have a clear choice: 

  1. Rapidly build on the beginnings of what must be an aggressive effort to realize our energy and manufacturing-driven economic potential – and the community development benefits that will come with it
  2. Settle for status quo:  below-average economic performance, population stagnation or loss, and our natural gas liquids (NGLs) leaving the state to create prosperity in other parts of the nation and world.

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