New report quantifies impact of Marcellus on PA’s gas prices

By Luke Geiver | November 01, 2017

A decade of unconventional shale gas retrieval efforts in Pennsylvania have greatly impacted the state, according to a new report by Christina Simeone, director of policy and external affairs at the Kleinman Center for Energy Policy out of the University of Pennsylvania.

The report, “Pennsylvania’s Gas Decade,” offers insight into the prices paid by consumers in the region of the Marcellus and Utica gas plays from 2007 to 2016.

Although gas prices in the region were typically higher than national averages, prices paid during the shale gas decade have been significantly lower, according to the report. In Pennsylvania, electric power sector entities saw a decrease in gas prices of 79 percent. Residential gas prices fell by 40 percent.

Across the country, electric power entities experienced a gas price reduction of 65 percent while residential consumers saw a 34 percent price reduction.

The ability of shale gas producers to retrieve gas from the Marcellus during the 2007 to 2016 timeframe created a 2,800 percent increase in the amount of gas produced in the state. Since 2011, the state has been a net exporter of gas and to date, Pennsylvania only used a quarter of the gas it produces annually. Also during the past decade, Pennsylvania led the nation in major pipeline proposals to the Federal Energy Regulatory Commission with 53 applications. Although not all proposals will be realized, the report said that many will help increase the amount of gas that can be exported outside of the state.

The 82-page report also offers two major questions regarding the impact of natural gas production in the state and its place with consumers moving forward into the future: how long will the Pennsylvania gas discount last, and, is additional gas industry evolution desirable to meet power sector needs?

To view the executive summary or download the report, click here