Pennsylvania has a real story to tell. The discovery of shale energy within the Marcellus Formation, which is located under much of Pennsylvania, Ohio and West Virginia, create a new source of affordable energy that is restoring manufacturing jobs that left the state not to long ago. Writing at Philly.com, David Holt tells the story.
Image via Flickr/Matthew Paulson
Natural-gas production is saving jobs in Pa.
There was a time, just a few years ago, when the Philadelphia region’s refineries were facing closure. But now shale energy is helping reenergize the region’s manufacturing base with the revival of several of those facilities.
Over the last two years, Delta Airlines snapped up the former ConocoPhillips refinery in Trainer, promising to invest $350 million in the facility and employ about 400 full-time workers. The old Sunoco refinery in South Philadelphia avoided a permanent shutdown and the elimination of 850 jobs when Sunoco and the Carlyle Group created a joint venture at the facility to import lower-cost oil from North Dakota’s Bakken formation and use natural gas from the Marcellus Shale.
Fortunately, the region has also seen Sunoco announce that it will reopen its Marcus Hook site as a natural-gas processing facility. Officials are calling that complex a “world-class natural-gas liquids hub.”
Braskem America – a Brazilian company with its North American headquarters in Center City that makes the plastic used in a variety of products, such as diapers, plastic containers, food packaging, cups, carpeting, consumer products, and housewares – faced this closure firsthand. A Marcus Hook tenant since 1991, its site came close to closing in 2011 after a refinery next to it closed, cutting access to much-needed raw materials.
“There was a lot of concern that this area was going to lose the majority of its tax base and the majority of its employees,” said Joe Wade, Marcus Hook people and organization leader for Braskem.
Braskem acquired a processing unit from Sunoco in Marcus Hook to allow operations to continue, saving about 240 jobs. Jeremy Glisson, plant manager for the Marcus Hook facility, believes the company “is still here today because Braskem made that decision to continue to operate this facility to make necessary investments to make us competitive here at this site.”
This plant’s extraordinary turnaround is another example of how shale energy has become an economic driver and an energy resource for America, particularly in Pennsylvania. The Energy Information Administration reported that development of the Marcellus Shale has made the commonwealth the fastest-growing natural-gas-producing state in the United States. The state’s total marketed natural gas grew by 72 percent from 2011 to 2012, according to the EIA.
While shale development did not begin in Pennsylvania, the drilling and hydraulic fracturing perfected in the Marcellus Shale has led to the doubling of annual gross natural-gas production in Pennsylvania, exceeding one trillion cubic feet in 2011 and reaching 12 billion cubic a feet day in 2013.
Just last year, thanks in part to increased natural-gas production from Pennsylvania’s section of the Marcellus Shale, the United States surpassed Russia as the world’s largest producer of natural gas. For perspective, the Marcellus Shale now produces more natural gas than the entire nation of Saudi Arabia.
Indeed, for many Pennsylvanians, shale energy has translated into real savings. Analysts with Bank of America noted that the prolific quantities of natural gas produced in the Marcellus Shale have been responsible for greatly reducing the price of natural gas statewide.
In fact, consumers of the region’s largest natural-gas utilities, including Peco and Philadelphia Gas Works, saw a combined average reduction of 41.25 percent in rates from 2008 to 2011, or nearly $3,200 in average savings per customer, The Inquirer reported.
At the same time that shale development has lowered energy costs, it is also improving the state’s economy. According to the Pennsylvania Department of Labor and Industry, oil and gas development using fracking contributed more than $11 billion to the state’s economy in 2010.
Make no mistake, shale energy is helping to bring the Philadelphia region’s energy industry back by driving economic opportunity for the area. Unfortunately, consumers are being misled by special-interest groups like the Sierra Club and Food and Water Watch that are intent on stopping energy development – and the lower energy costs and prosperity that come with it. By advancing shale energy, we can bring forth new jobs and new tax revenues to fund schools and local initiatives.
Instead of misleading American consumers, as some continue to attempt to do, shale energy should be promoted. There is real opportunity available, and Pennsylvania is proof of this. In just a few short years, the Marcellus Shale has improved the lives and livelihoods of Pennsylvanians, from Philadelphia to Pittsburgh and beyond. Today’s energy renaissance is the latest chapter in our pursuit of the American dream.
David Holt is president of Consumer Energy Alliance. firstname.lastname@example.org