The COVID-19 pandemic has upended the work force and labor market in ways the United States has never had to deal with; the challenge is entirely unique and many Pennsylvanians have struggled. At the same time, the coronavirus has also provided a better picture of industries that are more resilient than others. Turns out that energy is just as important mid-pandemic as it was before, and we at the Pennsylvania Energy Infrastructure Alliance (PEIA) expect that importance to grow post-pandemic.
Moreover, the 21st century has been one of energy for the Commonwealth. Here’s the story:
Thanks to technological innovations in the energy industry, specifically hydraulic fracturing that allowed for easy natural gas production and accompanying processing technologies that make the raw materials ready for the marketplace, Pennsylvania’s energy and employment landscape has been transformed.
A unique aspect of energy infrastructure development (the natural consequence of natural gas production) is the breadth of jobs it creates. Huge processing facilities require the expertise of engineers and chemists.
Of course, these facilities are also massively complex construction projects and require a number of union locals and their technical expertise to see to it that they’re completed with complete integrity. This includes the Teamsters, Steamfitters, IBEW electricians, Boilermakers, Operating Engineers, Steelworkers, and more. Workers are also vital to the constant maintenance and operation of these facilities following construction.
These projects are great employment opportunities, providing long duration work and family-supporting wages that also boost local economic activity. In April 2019 members of the Philadelphia Building Trades announced a two-year long project labor agreement for 1,200 tradesmen at a rate of $200 million at the Marcus Hook Industrial Complex in SEPA.
Opportunities aren’t reserved to the eastern side of Pennsylvania, either. An industry study found that statewide the natural gas industry supports over 322,000 jobs.
In other words, Pennsylvania’s energy industry has been central to the state’s employment.
It makes sense, too. According to the Energy Information Administration Pennsylvania, primarily thanks to the Marcellus Shale formation, reached 6.2 trillion cubic feet of natural gas production – good for second in the country and runner-up to Texas – and hands have been needed on deck ever since to build the appropriate storage, transport, and processing sites to make use of our resources.
This success happened on a much longer timeline, though, and the impact is better measured through economic success.
In 2011 three Ph.D economists, engineers, and energy experts examined Pennsylvania and the benefits Marcellus shale production has had and will have on the economy. The findings are stark and main takeaways include:
- In 2010 the natural gas development – comprised of production, transportation, processing and associated jobs – generated $11.2 billion equivalent to gross domestic product for the state of Pennsylvania.
- The same year the industry supported nearly 140,000 jobs.
- Economic activity and the accompanying jobs paid local governments handsomely, spurring an added $1.1 billion in state and local tax revenues.
The three added: “Pennsylvania is now self-sufficient in supplying itself with natural gas and in future years will likely become a major supplier of natural gas and liquids to consumers in other states,” and so it has been.
In 2016 a similar report was published, taking a focus on the sustainability of the natural gas industry and its ability to produce economic activity in perpetuity with production. The study focused on Western Pennsylvania, particularly 19 counties in the Western region and home to a majority of production wells.
Before noting their findings, the authors wrote: “The impacts of the conventional oil and gas industry are extremely important to the local economies in the 19-County Region. These counties and municipalities are less able to replace the income and employment generated by this industry with other jobs, making the health of the industry vital to their future.” This assessment is consistent with their findings, especially:
- Within the Commonwealth, the operations of the conventional oil and gas wells in the 19-County Region generate an estimated $1.4 billion in total annual economic impact, of which $1.2 million occurs within the 19-County Region.
- The activity of the conventional oil and gas industry supports an estimated 5,600 jobs with $241 million in earnings in the Commonwealth. Of that total employment impact, 4,700 jobs with $185 million in earnings are supported within the 19-County Region.
- Additionally, the operations support $17 million in annual tax revenues to the Commonwealth.
PEIA is looking forward to similar studies of the 2016 – 2020 timeframe. In the past few years alone significant additions have been made to the Commonwealth’s energy portfolio. There are new processing facilities and ‘crackers’ as they’re called, and new importance to the state’s natural gas production as many operators like Braskem stepped up operations to meet growing personal protective equipment demand. It would be of no surprise if the production, jobs, and tax revenues have outpaced the estimates of earlier studies. Nonetheless, to continue the success there must be a full-fledged commitment to energy. That means having an honest discussion about natural gas’ merits and more. Southeast Pennsylvania has been plagued by loud and misinformed rhetoric to oppose projects like Mariner East, but PEIA hopes the above will emphasize what is at stake for Pennsylvanians.