New Penn State Study: Marcellus Shale Drilling Created $11.2 Billion in Economic Activity & Supported 140K Jobs in PA in 2010

A new report titled “The Pennsylvania Marcellus Natural Gas Industry: Status, Economic Impact, and Future Potential” was released yesterday by three Penn State University researchers. The report is the third in a series of economic forecasts from the same researchers and outlines the astonishing impact Marcellus Shale drilling has had and continues to have in Pennsylvania—generating $11.2 billion in economic activity in the state in 2010 and supporting nearly 140,000 jobs. The 68-page report was funded by the Marcellus Shale Coalition, an industry group based in PA (a full copy of the report is embedded below).

The report’s authors predict the Marcellus Shale play will become the nation’s leading supplier of natural gas by 2020, providing one quarter of all natural gas used in the U.S. A summary of the key findings in the report includes:

Historic Levels of Production

  • By the end of 2010, estimates suggest that more than 1,405 Marcellus wells in Pennsylvania were producing almost 2 billion cubic feet of natural gas per day.
  • The study finds that 2,300 Marcellus wells in 2011 in Pennsylvania could produce almost 3.5 billion cubic feet of natural gas per day.
  • This production exceeds consumption of natural gas in Pennsylvania – meaning the Commonwealth is a net natural gas exporter.
  • By 2015, the Pennsylvania Marcellus could produce more than 12 billion cubic feet per day, second only to Texas in natural gas production.
  • Marcellus gas production could expand to 17.5 billion cubic feet per day by 2020, which would make the Marcellus the single largest producing gas field in the United States, if real natural gas prices do not fall significantly.
  • The Pennsylvania Marcellus’ projected production of 17.5 billion cubic feet of natural gas per day (6.39 trillion cubic feet annually) could represent nearly a quarter of the United States’ annual natural gas production and consumption in 2020, according to U.S. Department of Energy estimates.

Major Economic Benefits

  • During 2010, the Marcellus gas industry increased Pennsylvania’s economic activity by $11.2 billon, generated $1.1 billion in state and local taxes, and support nearly 140,000 jobs.
  • The Marcellus industry could generate more than $12.8 billion in economic activity during 2011. This would generate more than $1.2 billion in state and local taxes and support more than 156,000 jobs.
  • Estimated economic impacts have increased over past years due to the dramatic increases in productivity of Marcellus wells resulting from advanced technologies.
  • The economic impacts will likely be even greater than current estimates, owed to the availability of low cost natural gas supplies, as well as natural gas liquids, which could stimulate the expansion of Pennsylvania’s manufacturing capacity – including in the steel, glass, foundries, chemicals, fertilizers, and other natural gas intensive industries.

Consumer and Landowner Benefits

  • Given a 12.6 percent reduction in natural gas prices due to higher Marcellus output, total energy expenditures for Pennsylvania consumer declined by $633 million during 2010.
  • Residential customer and household electricity and natural gas bills in Pennsylvania are $245.1 million lower as a result of gas production from the Marcellus with $217.4 million from lower natural gas bills and another $27.7 million from lower electricity bills.
  • In 2010 alone, natural gas companies paid over $1.6 billion in these lease and bonus payments to Pennsylvania landowners.

*Marcellus Shale Coalition Press Release (Jul 20, 2011) – New Study: Pa. Self-Sufficient in Natural Gas, Marcellus Shale Could Lead Nation in Production by 2020