A natural gas pipeline project that will open up markets in the Mid-Atlantic and Southeast for Pennsylvania shale gas has surpassed a major regulatory milestone. On December 30, the Federal Energy Regulatory Commission (FERC) released an “Environmental Impact Statement” that clears the way for final FERC approval of the Atlantic Sunrise project, a development that should lead to permit approval for the line from other state and federal agencies. Developer of the project, Williams Partners, estimates the Pennsylvania gas will be flowing to customers by the middle of 2018.
In technical terms, the project will link approximately 200 miles of new line in northeast Pennsylvania to the decades-old Transco line that runs from the gulf coast of Texas to New York City. In addition, existing Transco facilities will be modified to allow gas to flow in two directions.
In broader economic terms, approval of the project will be another step toward unlocking the potential for historic economic development in Pennsylvania – we produce more natural gas than all of Canada, but lack the necessary infrastructure to move it to market. What’s more, the down-the-line impact of the project will be the creation of high paying, sustainable jobs. A Penn State study predicts that Atlantic Sunrise will directly and indirectly support approximately 8,000 jobs in ten Pennsylvania counties during the project’s construction phase, resulting in an estimated $1.6 billion economic impact in the project area. Countless additional jobs will be created as businesses, especially manufacturers, expand their operations because of access to this new, competitively priced natural gas supply.
PMA President David N. Taylor applauded the news, saying that promoting the need for and the economic benefits of an energy infrastructure has become the top mission of the association.
“Natural gas – methane-- is an excellent, clean burning, affordable fuel source. And the byproducts that are harvested with it are prime feedstocks for all of modern manufacturing – ethane becoming ethylene, butane becoming butylene, and propane becoming propylene,” said Taylor. “These products, manufactured goods themselves, become products like polyethylene - arguably the most important input in modern manufacturing.”
He added that companies would locate where the materials are readily available and most affordable. “Pennsylvania’s abundant, reliable, and cost-effective energy market will be coupled with the logistical ease of accessing these manufacturing building blocks, greatly increasing Pennsylvania’s economic competitiveness,” he said.
The affordable, abundant gas will help a large portion of the rest of the country to remain competitive as well.
The Transco line supplies 10 percent of the gas the U.S. uses every year, half of the gas New Jersey uses and a third of the gas used in Pennsylvania. Chris Stockton, spokesman for Williams, said power plants as far away as Alabama are looking forward to the incorporation of the Pennsylvania gas in the Transco line. “The shale gas is cheaper than gas from Canada and even from the Gulf of Mexico,” Stockton said.
Without the new line, and others like it in the approval stages, the economic development and job creation opportunities from the shale gas would be squandered, and Pennsylvania would miss out on this prime opportunity.
A recent U.S. Chamber of Commerce study shows that Pennsylvania would be one of the economically hardest hit states if oil and natural gas development were suddenly banned. By 2022, the Commonwealth would shed nearly 500,000 jobs, lose $45 billion in annual GDP, and families would see costs rise $3,500 annually.
Not having the means to get the gas to market is effectively a ban. The Marcellus Shale Coalition (MSC) estimates that approximately 25-30% of the Marcellus wells drilled to date still do not have pipeline takeaway capacity.
It’s little wonder then why MSC president David J. Spigelmyer called the Atlantic Sunrise “an absolute winner for Pennsylvania families, manufacturers, and the environment.”
“With policies that focus on building out the necessary infrastructure to move natural gas safely to market as well as encouraging capital investment and the creation of jobs, Pennsylvania has a tremendous opportunity to reestablish America as a global manufacturing leader,” Spigelmyer said.
Two additional necessary infrastructure projects include the pending Sunoco Logistics’ Mariner East 2, and UGI Energy Services’ PennEast lines. Mariner will move natural gas liquids across Pennsylvania to the Sunoco Refinery at Marcus Hook in Delaware County. PennEast will connect the affordable gas from northeastern Pennsylvania to millions of homes and businesses in Pennsylvania and New Jersey.
At a November hearing before the Susquehanna River Basin Commission, Carl A. Marrara, PMA’s Vice President of Government Affairs, said that the PennEast project alone is estimated to generate $1.62 billion in total economic impact during the construction phase alone, supporting about 12,160 jobs and an associated $740 million in wages.
“This area of Pennsylvania (northeast) knows energy independence,” Marrara said. “It always has through timber and coal. Now we have the opportunity to strengthen America’s energy leadership again through abundant, efficient, and clean burning natural gas.”
The message of what infrastructure means in terms of jobs and growth hasn’t been lost on the voters. A recent survey from the National Association of Manufacturers (NAM), conducted in partnership with PMA, shows that 85 percent of Pennsylvanians support increasing our investment in our infrastructure, and 57 percent strongly support increasing our investment.
The support, moreover, runs across party lines. More than three-quarters (78 percent) of Clinton voters and 93 percent of Trump voters support increasing our investment. And support for increasing energy development is consistent throughout the state, never falling below 78 percent in any region in Pennsylvania.
NAM research shows that total natural gas demand is expected to increase by 40 percent over the next decade. With the right tools in place, Pennsylvania is poised to claim a large majority of that market. Opportunities abound, but government expediency and cooperation are needed to realize that potential.