New study explores how to maximize Pennsylvania’s energy economy

Joe Massaro

When Morgan O’Brien took the Shale Insight stage last week, he said something that emerged as a theme at the conference: Shale gas is Pennsylvania’s future.

“This is going to be the beginning of an incredible economic boom,” O’Brien, president and CEO of Peoples Natural Gas, told the crowd during his mini keynote. “This is going to happen, and it’s happening today.”

The evidence came by way of an initiative and study called PA Forge the Future, published by O’Brien’s company and Chevron Appalachia. Stacey Olson, Chevron Appalachia president, said the study is a “road map of the region’s economic growth” with a comprehensive, fact-based analysis of the industry.

The study sought to answer big questions: What is the full economic potential of downstream development, and what key strategies will capture it? Here are the key takeaways from the report:

GDP could increase to $780 billion within a decade

By pursuing an annual average growth rate of 2.3 percent, Pennsylvania can increase its GDP to $780 billion within 10 years. With this growth, the study reports, will come 100,000 additional jobs, a 90 percent (more than 4.5 trillion cubic feet) increase in gas demand and an estimated $2 billion to $3 billion increase in state revenues.

Increased development strategies are a must

To attain these goals, Pennsylvania must work on three key development strategies:

  1. Increased gas-fired power and heating. The state will need to ensure all Pennsylvanians “benefit from low-cost gas for residential and commercial/industrial users.”
  2. Clusters in petrochemicals, advanced materials and data-driven automated manufacturing. The latter, the report states, will drive GDP and job growth, while “positioning Pennsylvania as an Industry 4.0 manufacturing leader.”
  3. Exports. It’s “crucial to make gas production viable, without hurting competitive gas prices in [the] state,” the report notes.

Deep-rooted challenges must be overcome

While Pennsylvania has unique strengths, including a world-class energy resource, it has challenges to overcome:

  • Low-cost natural gas that is not fully reflected in retail power prices
  • Topography, size and connectedness issues in the large network of brownfield sites
  • An available labor pool with potential skills gaps and cost disadvantages
  • A relatively limited translation of innovation into commerce, despite academic leadership in IT and engineering
  • A loss of science and engineering talent due to brain drain

Private and public sectors must collaborate

Targeted statewide initiatives should be the result of partnerships between Pennsylvania’s public and private sectors, “reflecting the most important actions to attract the right companies, prioritize the right infrastructure and ensure Pennsylvania’s low-cost gas and human capital translate into competitive opportunities to realize the full potential of its world-class natural gas reserves.”

The full report can be found at http://paforgethefuture.com/.

Joe Massaro

Joe Massaro is based in Bravo Group's Pittsburgh office and has deep energy industry expertise. He previously served as the field director for a Pennsylvania-based oil and gas industry grassroots PR firm.

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