Archive

Western Pennsylvania's trusted news source
Shale gas output ahead of facilities | TribLIVE.com
Westmoreland

Shale gas output ahead of facilities

gtrEnatgasoutlook001022518
Dan Speicher | Tribune-Review
A new Huntley and Huntley Energy Exploration well pad is under construction along Coxcomb Hill Road, in Plum Boro, as seen on Monday, Feb. 5, 2018.
gtrEnatgasoutlook002022518
Dan Speicher | Tribune-Review
A new Huntley and Huntley Energy Exploration well pad is under construction along Coxcomb Hill Road, in Plum Boro, as seen on Monday, Feb. 5, 2018.
gtrwellpad3web012518
Submitted photo
The Poseidon well pad in Penn Township.
gtrEnatgasoutlook003022518
Dan Speicher | Tribune-Review
A drilling rig towers over the walls of Huntley and Huntley Energy Exploration's Poseidon well pad, in Penn Twp., as seen on Tuesday, Feb. 6, 2018.
gtrEnatgasoutlook004022518
Dan Speicher | Tribune-Review
A drilling rig towers over the walls of Huntley and Huntley Energy Exploration's Poseidon well pad, in Penn Township, as seen on Tuesday, Feb. 6, 2018.

Natural gas production in the Marcellus and Utica shale regions tripled in the past five years and, in Pennsylvania at least, created more gas than its network of distribution companies and power plants uses.

The local industry's future relies on adding to that network in the construction of facilities such as the power plant Tenaska Inc. is building in South Huntingdon or the cracker plant Royal Dutch Shell is building in Beaver County, experts say.

It also depends on several controversial pipeline projects that would allow gas produced in Pennsylvania to be shipped east, north and west.

“It's all going to depend on our ability to build pipeline from where it is to where it needs to be,” said Sam Andrus, IHS Markit's senior director for North American natural gas research.

The other way to export the energy from natural gas is to build power plants, but transmission lines that would carry that electricity tend to face the same kind of opposition as pipelines, he said.

Development of the Marcellus shale changed Pennsylvania from a net importer to a net exporter of natural gas in 2015 and made it one of the major net exporters of energy in the country, according to an Energy Information Administration analysis in July.

From December 2016 to June, employment in the oil and gas extraction industry increased by 85 to 2,925 jobs in the seven-county Pittsburgh metro area, according to the Department of Labor and Industry. Natural gas distribution jobs increased by 104 to 2,063 jobs.

The metro area includes Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties.

Coal mining industry jobs in the metro area increased by 15 to 921 jobs in June 2017, according to the state data.

Marcellus shale impact fees peaked in 2013 at $225.7 million and declined to $173.2 million in 2016. The state projects that fees for 2017 will come in at $219.4 million, which would be a $46.1 million increase over 2016 collections.

“There's a cautious optimism in the industry right now,” said David Spigelmyer, president of the Marcellus Shale Coalition.

Drilling peaked in the state in 2011 when there were 111 active rigs here, he said.

“We dropped to 13 rigs just two years ago. We're back to 36 or 37 rigs active in the state, primarily in the western corner of the state and up in the northeast,” Spigelmyer said.

Investment also is coming back to the region, including about $13 billion worth of proposed pipeline projects for Pennsylvania West Virginia and Ohio, he said.

The projects would move gas into New England, Chicago, Buffalo and Canada, but the most important one is to reach the Philadelphia-New Jersey market which is mainly supplied from the Gulf Coast states now, he said.

The Federal Energy Regulatory Commission in January approved the 120-mile Penn­East Pipeline that will connect the Marcellus shale to Philadelphia and New Jersey.

Utilities and power plants already have committed to buying about 90 percent of the pipeline's capacity of 1 billion cubic feet per day, according to PennEast Pipeline Co.

The Mariner East pipeline is moving natural gas liquids from the Marcellus and Utica shales to the Marcus Hook Industrial Complex, which processes and distributes them domestically and internationally.

Sunoco Logistics LP is building another pipeline, Mariner East II, to increase that capacity. The state Department of Environmental Protection halted the project in January because of numerous environmental violations, then announced Feb. 8 that it will be allowed to continue because the company agreed to pay a $12.6 million penalty.

The 306-mile pipeline crosses about 36 miles in Westmoreland County on its route from Ohio and West Virginia to Philadelphia. It crosses through Jeannette, Murrysville and Rostraver, South Huntingdon, Sewickley, Hempfield, Penn, Salem, Loyalhanna and Derry townships.

A company newsletter in December said work on the project was 91 percent done.

“Infrastructure is vitally important,” Spigelmyer said. “We produce an awful lot of natural gas right now in this state. We do not have the infrastructure to get it to the primary consuming regions of the state and, frankly, of the country.”

Brian Bowling is a Tribune-Review staff writer. Reach him at 724-850-1218, bbowling@tribweb.com or via Twitter @TribBrian.