On Point with Chris Papst
Could the Keystone State be the next Saudi Arabia? Initially, that question seems ridiculous. But the ridiculous nature actually lies in the possibility of it not happening.
For lack of a better term, Pennsylvania is sitting on a gold mine. A recent study from Penn State University found that the Marcellus Shale in PA has the potential to be the second largest natural gas field in the world. There are 100s of trillions of cubic feet of natural gas trapped deep underground. And it could save this commonwealth.
By all accounts, the Marcellus Shale industry in Pennsylvania is still in its infancy. But new numbers show it’s growing up quickly. In 2009 the industry had 700 wells drilled while supporting 60,000 jobs. Just two years later, 2,300 wells were drilled supporting 157,000 jobs. By 2020, the industry could produce a quarter of the nation’s natural gas, while supporting more than 250,000 jobs and contributing billions in local and state taxes.
Here are some more eye opening numbers: In 2011 the total economic impact of the shale in PA could exceed $12 billion. Marcellus Shale natural gas production could reach 17 billion cubic feet per day by 2020. If that happens, our state would be the largest natural gas producer in America and second in the world - behind Saudi Arabia.
The shale is not only filling government and land owner's coffers, it’s putting more money into everyone’s pockets. The influx of the gas into the market has decreased electric and heating bills. Researchers estimate prices dropped nearly 13 percent in 2010 alone, saving PA customers $633 million.
According to a former Secretary for the Department of Environmental Protection whom I interviewed for a story a short while ago, this gas doesn’t just make Pennsylvania a local supplier; it turns our commonwealth into a potential global competitor. He says PA will soon be able to compete against countries like Russia, for supplying the natural gas that powers Europe.
This shale also gives us the opportunity to shift from oil to gas. This would not only have obvious national security and economic advantages, but also environmental benefits. On average, America's tractor trailer fleet turns over every three years. If the right incentives are put into place, we could start abandoning diesel in favor of cleaner burning natural gas.
However, there is a downside. The liquid used by the industry to extract the gas does contain chemicals that are harmful to the environment. About 40 percent of the fracking water stays in the ground thousands of feet beneath the water table, so it affects nothing. But, the rest returns to the surface. Some companies recycle it while others dispose of it in a variety of other ways.
This will be a contentious issue as the industry grows. And it must be addressed responsibly. As an avid fisherman and conversationalist, I feel we must protect our inland waters. A balance must be found between economic growth and environmental stability.
Pennsylvania is the sixth most populated state. With the jobs this industry creates, we could soon be fifth – possibly by 2012 (Illinois' population is fewer than 128,000 higher). As the population grows, the state could gain back some of the electoral votes it has lost in the past few census counts – giving it more political power at the federal level. Also, with the excess revenue, state income taxes and property taxes could be cut. This would pull residents from surrounding states such as New York and New Jersey who will gladly trade a longer commute for lower cost of living .
Could the Keystone State be the next Saudi Arabia? The potential is there. We'll see how we handle it.
Chris Papst is a two-time Emmy Award winning reporter for CBS-21 news.