Appalachian Basin

Marcellus Gas Users Seeing Big Savings This Winter

This winter, many Americans felt the chills of frigid temperatures. Luckily for residents of states benefiting from the Marcellus Shale, many did not feel the pain of higher energy costs in their pocketbooks.

In fact, despite not having any natural gas development in the state, New Jersey’s energy bills have been slashed due to its proximity to Pennsylvania’s Marcellus Shale.  As Jorge Cardenas of the Public Service Electric and Gas (PSE&G) recently explained, the company has taken advantage of pipeline transportation to lower energy costs for its customers:

“Although current market prices for gas have increased, we have purchased gas from the nearby Marcellus Shale Formation during the past several months at rates that are below prevailing market prices due to the surplus of supply in the region.”

Thanks to natural gas prices fueled by hydraulic fracturing in Pennsylvania’s Marcellus shale region, PSE&G has been able to offer credits to residential gas customers.  As Cardenas added, “Since last November, residential gas customers have saved about $133 on their gas usage – and will save another $40 this month.”

New Jersey isn’t alone.  As EID has noted before, Ohioans are also seeing a decrease in heating costs this winter. In fact, savings have been between 65 – 129 percent according to a report from the Toledo Blade.  An increased natural gas supply has also buffered Pennsylvanians from higher prices. As the Pittsburgh Post Gazette reports, “A bitter cold snap has furnaces working overtime and heating bills climbing, but Western Pennsylvania residents will pay less than they would have five or 10 years ago as Marcellus Shale production has fortified natural gas supplies.”

Other states are also looking to take advantage of the many benefits of the increased supply of affordable and abundant clean burning natural gas. A recent study in Maine showed that by adding natural gas capacity from cheap sources like Pennsylvania’s Marcellus Shale, electric bills could be cut by $120 million annually.  Patrick Woodcock, director of the Governor’s Energy Office explained the importance of having the infrastructure in place to access this affordable, reliable energy:

“This report highlights the imperative to move forward with basic infrastructure to access the domestic and world-class natural gas supplies in our backyard, it is critical that we cost-effectively manage New England’s reliance on natural gas by expanding our infrastructure to improve our employers’ competitiveness, reduce the use of petroleum for electricity generation, and finally lower Mainers’ electric bills.”

Unfortunately, residents in other regions without access to these natural gas reserves have note been as lucky. Take a look at New England, where between January 23-25 twenty four percent of the area’s power was generated from other traditional fuels because it lacked the infrastructure to increase natural gas capacity into the region.  And consumers were left to pay the price.

As industry continues to develop the necessary infrastructure to bring the abundant benefits of natural gas to more markets people will continue to see lower energy costs.  As a September 2013 report from IHS CERA found, shale development “increased disposable income by an average of $1,200 per U.S. household in 2012” thanks to savings from lower energy costs and bills to consumers. IHS expects that number to grow to roughly $2,000 in 2015 and to $3,500 in 2025.

As more and more infrastructure comes online, Americans will continue to reap the benefits from shale development for decades to come.

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