Appalachian Basin

Natural Gas Power Plants Bring Major Investments, Jobs to Pennsylvania

Pennsylvania has become a prime location for new natural gas-fired power production, thanks in no small part to the abundance of natural gas in the Marcellus Shale. These new plants are helping to reduce air emissions for the power sector, and are bringing more than $10.5 billion in investments,  12,359 megawatts (MW) of power and more than 6,000 jobs to the Commonwealth.

Given Pennsylvania is the second largest natural gas producing state, it’s no secret that there is an abundance of the resource within its borders. In fact, Marcellus gross natural gas production exceeded 5.2 trillion cubic feet in 2016 – with over 18 billion cubic feet produced daily by the end of the year.  This incredible surge in production enabled the state to become a net exporter of natural gas in 2016, reversing the Keystone State’s history as a net importer and solidifying the Commonwealth as one of America’s top five suppliers of energy in 2015, according to the Energy Information Administration (EIA).

This increased production has also prompted Pennsylvania to look for ways to better utilize the resource within its borders, including initiating programs to provide previously unheard of access to natural gas in rural areas of the state where most Marcellus development is taking place. But one of the biggest contributors to the state’s increased consumption of natural gas has been in the power sector.  As the EIA explains,

“Half of all Pennsylvania households use natural gas as their primary heating fuel, but electric power sector consumption has grown rapidly in recent years to surpass the residential sector as the state’s largest natural gas consumer. The electric power sector uses nearly half of all natural gas consumed in the state. The residential sector and the industrial sector each consume about one-fifth.”

To put this growth into perspective, according to the EIA, natural gas provided less than five percent of the state’s electric generation in 2005, but supplied nearly one-third by 2016. Notably in 2016, the first two natural gas-fired power plants to run entirely on gas produced from the Marcellus Shale began supplying electricity to roughly two million homes.

Economic Impact

When Panda Power’s Liberty facility in Bradford County and Patriot facility in Lycoming County —Pennsylvania’s first two Marcellus gas-fired power plants — came online in 2016, they represented roughly $1.7 billion in investments and collectively added 1,685 MW to the power grid. In addition to this, they created around 1,000 jobs during construction and resulted in roughly 54 direct and 90 indirect permanent positions to run the facilities.

Panda is also responsible for one of the country’s largest conversions to a natural gas-fired plant at its Hummel Station facility in Snyder County. This project has yielded a $710 million investment and has employed roughly 900 people throughout its construction. It will supply power to over one million homes (1,124 MW) when it goes online in May 2018, while creating 35 direct jobs to operate and 52 indirect jobs to support the plant. It will also use 97 percent less water than the previous facility and significantly reduce air emissions.

Further, the facility will utilize Marcellus natural gas to power the plant, thanks to UGI Energy’s brand new 35-mile Sunbury Pipeline. The Sunbury, which was built specifically to supply feedstock to the power plant, yielded $160 million in total investment and created 350 jobs.

And that’s just the start.

There are 10 more natural gas-fired facilities of at least 485 MW each currently being permitted or under construction across Pennsylvania.  These power plants will bring an additional 9,250 MW, $7.6 billion investments, and approximately 4,750 jobs to Pennsylvania.

Power Plant Location Megawatts Investment Jobs Status
Renovo Energy Center Clinton County 950 MW $800 million 500 Air quality permit submitted
Caithness Moxie Freedom Luzerne County 1,050 MW $1 billion 500 Air quality permit approved
Lackawanna Energy Center Lackawanna County 1,500 MW $1 billion 800 Under construction
Archbald Energy Partners Lackawanna County 485 MW $510 million 300 Air quality permit approved
Westmoreland Generating Station Westmoreland County 930 – 1,065 MW $500 million 600 Approved April 2015
Fairview Energy Center Cambria County 1,050 MW $700 million 500 Under construction
Robinson Power Co./Beech Hollow Energy Washington County 1,000 MW $1.16 billion 500 Air quality permit approved
Hilltop Energy Center Greene County 620 MW $620 million 250 Air quality permit approved
Birdsboro Power Plant Berks County 485 MW $510 million 300 Air permit approved
Hickory Run Lawrence County 1,000 MW $750 million 500 Under construction
TOTAL 9,205 MW $7.6 billion 4,750 Jobs

In addition to these larger facilities, there has been a wave of smaller 20 MW natural gas-fired power plants being built predominantly across the Northern Tier counties. And while the economic impact of a single one of these facilities may not seem like a large investment compared to these larger plants, the collective impact is another incredible story.

IMG Midstream is leading the charge on smaller facilities and completed the first, the Roundtop facility, in 2015 in Susquehanna County. Each of these facilities sit on about two acres of land and can power up to 13,000 homes and represents an approximately $20 million investment. There are currently 12 facilities in various stages of development across the Northern Tier counties of Bradford, Susquehanna, Tioga, Wyoming and even one in Wayne County, which is in the Delaware River Basin and currently under a fracking moratorium. Washington and Greene counties each have one in development, as well, for a grand total of 15 new power generation facilities.

All told, these 15 projects represent an added 300 MW of power, approximately $300 million in investments, and can power roughly 195,000 homes.

  Power Plant Location Status
1 Milan Energy Bradford County Operational
2 Alpaca Energy Bradford County Operational
3 Roundtop Susquehanna County Operational
4 Beaver Dam Bradford County Operational
5 Niles Valley Energy Tioga County Under development
6 Wolf Run Energy Tioga County Under development
7 Oxbow Energy Wyoming County Under development
8 Florey Knob Energy Wyoming County Under development
9 Hop Bottom Energy Susquehanna County Under development
10 Mineral Point Energy Susquehanna County Under development
11 Wrighter Energy Susquehanna County Under development
12 Stourbridge Energy Wayne County Under development
13 Bayles Energy Greene County Under development
14 Amity Energy Washington County Under development
15 Pine Hill Energy Tioga County Permit approved

Combined these investments total $10.5 billion, 12,359 MW of power and more than 6,000 jobs being brought into Pennsylvania.

It should be noted that these lists are not comprehensive and do not include several plants being converted to natural gas or new natural gas plants that are more than 20 MW but less than 485 MW because of the sheer number of projects in the works, so these investment and jobs estimates are likely understated. But it does give a general idea of the staggering economic impact Pennsylvania is on the receiving end of thanks to the abundance of Marcellus Shale.

What’s more is each of these facilities represent another opportunity for Pennsylvania to continue lowering its greenhouse gas emissions. Several reports this year have creditedthe recent slowdown in growth of CO2tofuel switches to gas for power generation and increased renewable power generation.” In fact, the EIA explained earlier this year that 63 percent of the 12 percent total reduction in U.S. energy-related CO2 emissions during the last decade have been the result of the shift to natural gas-fired electrical generation.

This decrease in greenhouse gas emissions has also occurred in Pennsylvania based on the 2016 state greenhouse gas inventory which explained data through 2013 – the last year with a complete available data set. The total gross emissions (methane, carbon dioxide, and nitrous oxide) fell from 329.1 million metric tons of carbon dioxide equivalent (MMTCO2e) in 2005 to 305.75 MMTCO2e in 2013, or by 7.1 percent. Emissions from electricity generation – which accounted for 37 percent of total state emissions in 2005 and 34 percent of the total in 2013 – fell 14.6 percent from 121.56 MMTCO2e to 103.86 MMTCO2e as older facilities retired and more electricity began to be generated from natural gas.

The Marcellus Shale has brought incredible positive impacts to the Commonwealth – natural gas-fired power generation is just one part of that story across the Appalachian Basin. As was the theme at the recent Midstream PA conference, the benefits of upstream investment – the actual development of oil and gas wells – were only the beginning of the opportunities ahead for Pennsylvania and the entire Appalachian Basin.

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