Reaping the Rewards of Fracked Natural Gas

Energy Independence. It’s no pipe dream. The U.S. recently surpassed Russia and Saudi Arabia as the world’s top producer of petroleum and natural gas.

As a result, the U.S. Energy Information Agency (EIA) says U.S. oil imports will drop 20% by 2025. As oil imports fall, the U.S. is not only finally realizing the long-elusive goal of energy independence, it is also re-establishing itself as a world leader.

“The production gushing from America’s shale oil and gas deposits…doesn’t just promise the long-elusive goal of energy independence,” says Arthur Herman, a senior fellow at Hudson Institute. “It points to an energy dominance and economic power that the United States hasn’t seen for 100 years, since the heyday of John D. Rockefeller and Standard Oil.”

The Marcellus natural gas basin in Pennsylvania is the second largest natural gas supply basin in the world. In 2014 the Marcellus produced about 16 billion cubic feet of natural gas a day, accounting for about 38 percent of total U.S. production. By 2020, that share is expected to grow to 64 percent.

This incredible pace of development has pumped tens of billions of dollars into the Keystone State’s economy, creating more than 245,000 new direct and indirect jobs and saving state and local governments $19 billion in 2012-2013.

Although soaring gas development has helped the price of natural gas fall to historic lows in some regions of the U.S., a lack of sufficient underground pipeline infrastructure has prevented many consumers from taking full advantage of the country’s cheap energy supply.

williams1Matt Henderson, of Penn State’s Marcellus Center for Outreach and Research, told NPR’s State Impact that more than $10 billion in pipeline projects have already been announced for Pennsylvania to connect the glut of natural gas production with markets who desperately want access to abundant, inexpensive supply.

“Production has outpaced anybody’s wildest expectations,” he says. “The operators were found in a position where, ‘We need to get this out.’ So there’s a sense of urgency.”

Frank Ferazzi is general manager of the Transco pipeline, the largest volume pipeline system in the country delivering about 10 percent of the nation’s natural gas. He says that there currently isn’t enough existing pipeline infrastructure to move the full volume of natural gas being produced in the Marcellus.

“There’s a lot of natural gas being produced in Pennsylvania right now, but the state doesn’t have the necessary pipeline capacity to deliver all of that gas to market,” says Ferazzi. “The infrastructure in place is essentially the same network of interstate pipelines that was in place before the shale boom began.”

One proposal designed to address the need to add critical pipeline infrastructure is a proposed expansion of the Transco pipeline known as the Atlantic Sunrise expansion. It would include the construction of about 180 miles of new pipe in eastern Pennsylvania, directly connecting the existing Transco interstate pipeline with Marcellus production in the northern part of the state. Once complete, the project will connect natural gas consumers throughout the Mid-Atlantic and southeastern states – as far south as Alabama – with economically-priced Marcellus natural gas.

“It is amazing to think that homes and businesses in Alabama could actually soon be able to consume molecules of natural gas originally produced in Pennsylvania,” says Ferazzi. “Not only does this project help provide direct access to long-term, reliable energy supply, but it has the potential to save consumers in those markets a lot of money.”

In January 2015 researchers at The Pennsylvania State University modeled the market economic impact of the Atlantic Sunrise project on natural gas flows and prices across the Transco pipeline system. Over the 30-month period the study estimated that consumers served by the Transco pipeline from Alabama to New Jersey would have enjoyed about $2.6 billion in total benefits because of the access to the Marcellus basin facilitated by the Atlantic Sunrise expansion.

The Atlantic Sunrise project is currently engaged in a federal regulatory review process. Its backers are aiming to place the $3 billion project into service by 2017.

To learn more about Atlantic Sunrise, and how you can express your support for U.S. energy independence, click here.