Even when economic activity slowed considerably amid the pandemic, the natural gas and oil industry continued to provide the essential energy that powers our daily lives. Pennsylvania’s skilled and dedicated natural gas and oil workforce did its part to produce and deliver the energy we rely on and helped to maintain one of our state’s major economic engines.
According to a new analysis conducted by PricewaterhouseCoopers (PwC), the natural gas and oil industry contributed over $75 billion toward Pennsylvania’s gross domestic product (GDP), or 8.9 percent of the state’s total, and fueled every sector of our economy in 2021. Across the country, natural gas and oil generates nearly $1.8 trillion, or 7.6 percent, of the U.S. GDP.
Beyond the billions of dollars injected into our state’s economy, the industry supports over 93,000 direct natural gas and oil jobs and over 330,000 indirect jobs — from truck drivers to contractors and manufacturers — or 5.6 percent of Pennsylvania’s total employment. To put this into perspective, the total number of jobs supported by industry in Pennsylvania alone is equal to four times the capacity of Penn State University’s Beaver Stadium.
As this report shows, shale-rich Pennsylvania relies on natural gas development to sustain the economy, spur economic development and job growth, and provide good-paying jobs that are simply irreplaceable.
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Both producing and non-producing regions benefit from Pennsylvania-produced natural gas with increased access to abundant, reliable energy and revenues from the state’s impact tax on natural gas wells that fund environmental programs, infrastructure upgrades, parks, trails, and other community projects.
Pennsylvania also receives revenue from offshore natural gas and oil development through the Land and Water Conservation Fund (LWCF). Established in 1965, the LWCF has contributed more than $4.4 billion for conservation projects across America and a total of $375 million to Pennsylvania.
Additionally, when last assessed, royalty payments to Pennsylvania landowners where natural gas is produced totaled more than $9.8 billion from 2010–2018, with a minimum royalty rate of 12.5 percent. These payments continue to be a catalyst for growth and benefit many families, multi-generational family-owned farms, and businesses.
While the Keystone State’s robust energy sector has powered our economy and everyday lives, policies and permitting processes present significant roadblocks to critical projects. Consistent policies and efficient permitting at the state and federal level are sorely needed to support energy and infrastructure development.
Consider the status quo: Energy projects wait an average of 4.5 years for Washington’s federal review of their environmental impact statement alone. A recent study found that at least 10 major energy infrastructure projects, representing more than $34 billion in private spending, were delayed or canceled due to endless and uncertain permitting processes.
In Pennsylvania and the Appalachia region, these pipeline projects could deliver 4.6 billion cubic feet per day of natural gas for families and businesses, support thousands of family-sustaining jobs and contribute $19 billion in private spending to local and regional economies.
Instead, their benefits have gone unrealized.
More energy produced here in Pennsylvania means more jobs, economic growth, and environmental progress.
Pennsylvania is uniquely positioned to export liquefied natural gas (LNG) by leveraging its rich natural gas reserves to help meet the increasing global demand for cleaner energy while helping to lower emissions. Communities in southeast Pennsylvania, near the Port of Philadelphia, could benefit from developing an LNG export terminal, bringing significant new investment as well as construction and permanent jobs to the region, all while establishing Pennsylvania as a leader in global energy security.
Pennsylvania has a long history as a global energy leader. To keep the Keystone State a top energy producer and exporter, policymakers must make permitting reform a priority. The policies put into place today have very real consequences for our economy and energy future.
In Pennsylvania, our industry’s workforce is producing energy in safer, more efficient and cleaner ways than ever before. Carbon dioxide and methane emissions from operations are down. Industry-led innovation to detect and mitigate methane emissions has contributed to significant reductions relative to production in the Appalachia region and every major basin in America.
Prescriptive energy policies are not the answer. Right now, policymakers should embrace an “all-of-the-above” energy strategy and modernize our permitting processes to ensure we can meet the rising demand for energy. The federal bipartisan debt limit bill that includes important progress on permitting reform for critical infrastructure projects is a positive start.
Ensuring access to affordable, reliable energy is vital not only for our everyday lives but also for our economy. As the report by PwC illustrates, the natural gas and oil industry remains central to Pennsylvania’s economy. Yet, with policies and regulations that encourage investment and enable development, we can do much more.
More energy produced here in Pennsylvania means more jobs, economic growth, and environmental progress.
Stephanie Catarino Wissman is the executive director of American Petroleum Institute Pennsylvania.