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Pennsylvania not fully capitalizing on its Marcellus shale, energy economic potential, energy leaders say | TribLIVE.com
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Pennsylvania not fully capitalizing on its Marcellus shale, energy economic potential, energy leaders say

Stephen Huba
Stephen Huba
gtrshaleinsight
Stephen Huba
Chevron Appalachia President Stacey Olson addresses the opening of the Shale Insight 2017 Conference in Pittsburgh Wednesday morning.

Pennsylvania is realizing only a fraction of its economic potential as an energy producer against a backdrop of oversupply and continuing low prices, Chevron Appalachia President Stacey Olson told the Shale Insight 2017 Conference Wednesday.

Olson was one of three "mini keynote" speakers to address the opening of the large annual conference for leaders in the oil and gas industry in Ohio, Pennsylvania and West Virginia — the three states of the Marcellus and Utica shale plays.

While Pennsylvania is the second-largest producer of natural gas in the United States, after Texas, Marcellus gas is being sold at a significant discount to other markets, resulting in little or no return for energy producers, Olson said.

"Chevron Appalachia has been operating at a minimum activity level for two years," she said.

Olson said there is "not nearly enough demand" and not enough pipeline capacity for Pennsylvania to reap the full economic benefits of the Marcellus shale boom.

"Key pipelines are needed now," she said.

Olson cited the new "PA Forge the Future" study, commissioned by Chevron and Peoples Gas, in outlining three "key development strategies" to improve the state's situation.

The study said Pennsylvania needs to increase its gas-fired power and heating capacity in order to move 500,000 residential customers from oil to natural gas. One such power plant, the Tenaska Westmoreland Generating Station, is being built in South Huntingdon and is expected to come online in 2018.

The study also called for the creation of "competitive industry clusters" that enable growth in the petrochemical, manufacturing and data sectors.

Finally, Pennsylvania needs to expedite the expansion of the pipeline infrastructure, she said. Two pipelines — the Mariner East 2 and the Atlantic Sunrise — are under construction that will take Marcellus gas to domestic and international markets.

Olson predicted a $60 billion increase in the state's annual gross domestic product, the creation of 100,000 jobs and the development of three to five more ethane cracker plants if the study's strategies are followed.

Also addressing the conference Wednesday were U.S. Labor Secretary R. Alexander Acosta, Deputy Energy Secretary Dan Brouillette and Peoples CEO Morgan O'Brien.

The conference continues through Thursday afternoon and concludes with a keynote address by former White House press secretary Sean Spicer.

Stephen Huba is a Tribune-Review staff writer.