A decade ago most Pennsylvanians had little knowledge of the transformation of our economy that was taking place beneath the surface of the earth.
From 2005 to 2017, Pennsylvania tripled its daily production of natural gas from 5 billion cubic feet to 15 billion cubic feet. This growth, thanks to the state’s Marcellus and Utica shale reserves deep underground, put Pennsylvania second only to Texas in natural gas production.
Though, this undoubtedly should be celebrated, opposition to energy independence and success by some paradoxically seems stronger than ever.
The commonwealth’s energy success story starts in western Pennsylvania, and also partly in the central and northeast areas, where thousands of wells are helping to source natural gas from the Marcellus and Utica shale reserves, some of the largest in the country. These reserves are playing an important role in fueling our state’s economy, job growth, and meeting the energy needs of Pennsylvanians and millions across the Mid-Atlantic region.
Local municipalities and governments in western Pennsylvania, and in fact throughout the state, are enjoying the benefits of well production thanks to Act 13.
The act, signed into law in 2012, provides local governments with funds through state taxes on natural gas well locations based on the impact of the drilling activities such as local roads. These funds, totaling $1.5 billion since 2012, can be used to support a number of public goods, restorations and community wellness programs.
It should be pointed out that these state taxes on drilling, sometimes referred to as the impact fee, also are shared with local governments throughout the state by a formula even when they are not directly in the impacted areas.
Therefore, everyone benefits.
As a former Chester County commissioner, I can see the undeniable value in this extra revenue and can imagine the benefits it offers firstly to our directly impacted communities, and secondly a portion that goes to all communities.
For example our county in the southeast, not a Marcellus Shale area, gets approximately a half million dollars a year, illustrating the true statewide interest we have in promoting the industry.
Because of the burgeoning production of natural gas in western Pennsylvania, a number of energy companies have made significant investments. In central and western Pennsylvania, a great example is the CPV Fairview Electric Power Plant. This project itself totals over a billion dollars of investment. Yes, that’s billion with a “B”!
Last month, I had the opportunity to visit the CPV Fairview Energy Center in Johnstown and experience first-hand the incredible work being done. CPV Fairview will be an offtake point from three pipelines crossing the state, two operated by Enbridge for natural gas and the Mariner East Pipeline for ethane. Expected to go online in 2020, the facility will use natural gas and ethane to generate electricity for residents statewide.
With an initial investment of $1 billion, the construction portion of the plant has employed over 600 workers.
These are skilled laborers who are able to earn family supporting wages for themselves, to contribute tax revenues and commercial growth to local communities throughout the area.
CPV Fairview has an expected capacity over 1,000 megawatt hours of energy. This capacity translates into the ability to provide energy for 1 million households in the commonwealth.
Regionally produced energy cuts down on transport and delivery costs of electricity, which translates directly to lowering the monthly energy bills for households.
What fuel isn’t used by facilities like CPV Fairview throughout the state is transported to end consumers and facilities like the Marcus Hook Industrial Complex in Delaware County in southeastern Pennsylvania. It is a key facility where these products can be processed, stored and transported locally, regionally and internationally to end-users.
This past April, a $200 million project labor agreement was signed with members of the Steamfitters, Electricians, Laborers, Operating Engineers and Boilermakers, a commitment of 1,200 jobs to the expansion of the Marcus Hook facility to keep up
with natural gas production and growing commercial demand.
Critical for these projects to provide the expected benefit is the expansion of safe and reliable pipeline infrastructure development. Without the adequate transportation network, these products will move along the supply chain through more costly means that could pose greater community safety concerns. Pipelines are the safest way to transport energy resources compared to railroads and trucks.
Despite the energy industry’s important role in growing our state’s economy, a vocal minority in the southeast have chosen to prioritize ideology and an opposition to fossil fuels rather than invest in modern, safe energy infrastructure to transport these critical fuels.
The economic and environmental attributes of safe, reliable, affordable energy – and moreover reduces CO2 emissions – is tough to argue against. Not to mention the billions of dollars this industry is generating across Pennsylvania in overall gross state product, taxes paid to governments and the jobs it provides to its citizens.
Earl Baker is a former three-term Chester county Commissioner and two-term senator in the General Assembly’s 19th District. In the Senate, he chaired the Intergovernmental Affairs Committee and the Labor and Industry Committee. He remains active in the Chester County Chamber and also directs training programs for the Pennsylvania Manufacturers Association.