The shale gas revolution, brought about through the combination of hydraulic fracturing (“fracking”), horizontal drilling technologies has slashed consumer prices for both gas and electric in this country, while reducing air emissions by incredible volumes.
The University of Pennsylvania’s Kleinman Center for Energy Policy recently released a report showing Pennsylvanians have benefited enormously by the shale revolution. It has completely changed the energy paradigm of not only the Commonwealth, but also the U.S. as a whole and worldwide. The detailed report documents the enormous economic contributions of shale gas technology once described as “unconventional.” It has produced huge consumer savings while bringing economic development to rural areas and enhancing our energy security.
The key highlights of the report, entitled “Pennsylvania’s Gas Decade – Insights into Consumer Pricing Impacts from Shale Gas (2007-2016),” are:
- Pennsylvania natural gas consumers saw major price decreases. The electric power sector saw them drop $7.32/Mcf or an astounding 79%. Residential retail gas prices fell by $6.79/Mcf or 40%.
- While natural gas prices to Pennsylvania power plants have, historically, been above the U.S., they were, by 2016, some $1.04/Mcf lower than the national average.
- The purchased gas cost Pennsylvania's natural gas distribution companies are permitted to charge their customers has dropped by 72%, from an inflation-adjusted annual average of $11.76/Mcf in 2007, down to only $3.28/Mcf in 2016.
- Over the same time period, Pennsylvania's overall gas demand grew by 50.5%, while U.S. gas demand grew by 18.5%, reflecting the increased availability of the low cost energy delivered by6 the shale revolution.
- Gas demand from the Commonwealth’s electric power sector (including many new gas-fired power plants) grew by almost 250% between 2007 and 2016, from being the state’s smallest to its largest element of natural gas demand.
- Between 2007 and 2016, Pennsylvania’s annual natural gas production levels grew by almost 2,800%. The increase was larger than in any other major gas producing state and made Pennsylvania the biggest driver of America’s 32% increase in annual natural gas production.
- In 2007, Pennsylvania produced less than one percent of the nation’s annual gas supply; by 2016 the state contributed over 16% of national annual production.
Overall fracking has saved consumers enormous sums in both gas and electric costs. Meanwhile, it has also spurred the conversion of coal generating plants to gas, drastically reducing emissions of all sorts. The EIA recently released an analysis of what’s most contributing to greenhouse gas savings and, specifically CO2 emissions from power generation. Here are the staggering facts:
- Two basic factors contributed to lower electricity generation carbon intensity (CO2/kilowatthour) since 2005: substitution of coal-fired generation with the less-carbon-intensive and more efficient combined-cycle natural gas-fired generation, and growth in non-carbon electricity generation, especially wind and solar…
- Between 2005 and 2016, CO2 emissions declined by a cumulative 3,176 MMmt as a result of these two factors. Of this total, 2,007 MMmt can be attributed to the shift in fossil fuels to natural gas, and 1,169 MMmt can be attributed to the increase in non-fossil generation sources.
- Although total electricity generation use grew by about 1% from 2005 to 2016, related CO2 emissions fell by 24% over that period.
The evidence is overwhelming; shale gas is saving money, increasing energy security, revitalizing rural areas and reducing CO2 emissions connected with electricity generation. What’s not to love?
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Image courtesy of Natural Gas Now