Since 2004, when Range Resources pioneered the Marcellus Shale and unlocked its potential; numerous studies have shown that the economic impact thus far has been incredibly significant and beneficial to the local economy. Thousands of local people are now employed by the shale industry, and tens of thousands more benefit from the billions of dollars that have been infused into the local economy as a result of royalties, corporate taxes paid to Pennsylvania, the Impact Fee (tax), and the money spent in restaurants, hotels, hair salons, shops, and a myriad of other local establishments by employees and contractors.
But there are some who say that really, what’s been accomplished so far is just the beginning. Recently, Chevron Appalachia and Peoples Natural Gas unveiled their “Forge the Future” project – an initiative focused on the economic potential of Pennsylvania’s energy resources yet to be unlocked. It’s described as a “road map to economic growth,” and the opportunities the group has outlined are impressive, including a potential $60 billion increase in Pennsylvania’s gross domestic product (GDP) along with 100,000 new jobs.
The takeaway from the study comes down to this:
Pennsylvania has a chance to forge the future, translating its world-class energy resource into world-class competitive leadership in the 21st century global economy. This kind of vision sometimes collapses into mere buzzwords – but for Pennsylvania, it could become a practical reality in the next 10 years, if the full range of Pennsylvania leaders take strategic action today.
Pennsylvania can achieve this vision by undertaking three economic development strategies, working together in unison: increased gas-fired power and heating, new clusters in sectors of the future (Petrochemicals, Advanced Materials, and Data-Driven Automated Manufacturing), and gas exports to ensure the sustainable production of the resource.
To that end, Pennsylvania has great strengths to harness, as well as challenges to tackle head-on, across the five lenses of economic development: economic sectors, human capital, innovation and entrepreneurship, physical and virtual infrastructure, and governance and business climate.
Chevron Appalachia President Stacey Olson broke it down when speaking at the annual Shale Insight Conference in Pittsburgh last month: “If we don’t take deliberate steps to reap the full economic benefit of this resource, we’ll miss out on big economic opportunities right under our feet made possible by this huge resource.”
Olson pointed to pipeline development as critical in order for the industry to grow and to capture the full potential of downstream investment – more pipelines means more of the natural gas from southwestern PA can be transported to markets ready to purchase and utilize it.
The creation of a petrochemical hub is also a focal point of the “Forge the Future” initiative, and other studies bear that out. With the Shell Cracker Plant now under construction in Beaver County, PA -- a recent report release by IHS Markit has found that the greater Appalachian Basin has the capacity to support as many as four additional ethane cracker plants; with a forecast of $2.7 to 3.7 billion in investments in natural gas liquid assets. The realization of this possibility would turn southwestern Pennsylvania into a world class petrochemical manufacturing hub. And this opportunity stretches beyond hydrocarbons. Shale gas has the potential to bring a resurgence to regional manufacturing and to provide a backdrop for the creation of a new wave of high-tech jobs.
“Forge the Future” collaborator and CEO of Peoples Natural Gas, Morgan O’Brien, emphasizes that maximizing the benefits of the oil and gas resources in Pennsylvania could lead to “8 percent to 9 percent real, economic growth for the region and the state” --- along with $3 billion in new revenue.
O’Brien has also said it’s a nonpartisan effort focused on the future of Pennsylvania. “If we all work together, we’ll execute this.”
This article is written and sponsored by Range Resources.