Pennsylvania’s natural gas production is expected to meet more than one-half of the East Coast’s consumption through 2050 and generate steady economic activity, but takeaway constraints will continue to limit growth potential, according to the Marcellus Shale Coalition (MSC).
In the report, Economic and Fiscal Impact of Pennsylvania Shale Development, FTI Consulting Inc. said “given the historical stability…Pennsylvania will continue to supply around 58% of East region gas” to mid-century. FTI conducted the report’s research for MSC.
The report is based on the U.S. Energy Information Administration’s (EIA) three supply cases in the 2023 Annual Energy Outlook (AEO). They are low natural gas prices and high supply; high natural gas prices and low supply; and the reference case based on current regulatory and economic data.
According to FTI, 576 wells were drilled and 441 were completed in the state last year, and drilling and completions (D&C) should maintain that pace through 2050. In the low gas price and benchmark AEO cases, FTI estimated D&Cs at about 500 wells/year in the late 2040s. In the high price case, D&Cs are forecast to be around 400 wells by 2050.
Natural gas production in the Keystone State has remained at around 20 Bcf/d over the last five years, according to EIA. Production last year decreased by 0.4 Bcf/d compared with 2021. This was primarily because of “limits on natural gas takeaway capacity,” EIA noted. Earlier this year, EIA reported that during 2022, most interstate gas pipelines from Pennsylvania were close to maximum capacity.
An MSC spokesperson told NGI, “If we had more pipelines in the region, that could lead to added investment.”
Mountain Valley Pipeline (MVP), which is slated to begin service later this year, would add 2 Bcf/d of takeaway from the Appalachian Basin, representing nearly 10% of current production.
Transcontinental Gas Pipe Line Co. LLC’s Regional Energy Access Expansion Project, approved by federal regulators, was recently challenged. If it were to move forward, the pipe could add 829.4 MMcf/d of takeaway capacity from Appalachia.
Meanwhile, FTI said Pennsylvania's gas industry could generate $86-91 billion in state and local taxes from 2023-2050, or $3 billion/year, flat compared with last year’s state and local tax generation.
Natural gas exploration and production last year contributed $24 billion to Pennsylvania’s gross domestic product (GDP), FTI said. In the low price case, FTI said the industry could bolster GDP by $26 billion, or 5%. In the high price case, GDP impacts could be about $23 billion.
MSC President David Callahan said “the essential role of the natural gas industry” is job creation. The data also demonstrate “the urgency to prioritize infrastructure development and permitting reform to maximize these job creating benefits.”
Pennsylvania’s gas sector in 2022 employed more than 123,000 people, with an average median salary of $90,207, according to U.S. Bureau of Labor and Statistics data. FTI’s analysis, however, showed employment decreasing by 2050 to 114,300 jobs in the high gas price case and to 120,800 jobs in the low price case.
