‘Forge the Future’: boosting Pa. with energy
Pennsylvania’s unprecedented opportunity is right under our feet
Pennsylvania’s citizens and leaders are often more focused on the challenges we face than the opportunities we have before us. News headlines, data and commentary about a relatively stagnant economy, undesirable population trends, uncertainties about state and local budgets, mounting infrastructure needs and the opioid crisis are real.
Against that backdrop, we believe it’s time to focus on economic growth as a central driver of the solutions Pennsylvanians need and want. We are literally standing on an unprecedented, once-in-a-century opportunity to generate the kind of economic growth that can move us from talking about our problems to acting on solutions.
Over the past decade, our state has grown to be a leading U.S. and global natural gas producer. In just the past few months, no less than four major studies have been published to provide the data, detail and dimension of the downstream opportunities we have to create manufacturing and other supporting businesses that will be game-changers for our people and communities. If we’re getting tired of trying to slice the same old pie differently to satisfy the hunger for jobs, wages, workers and revenue to the treasury, these studies give us a new recipe: Let’s make a bigger pie. A much bigger pie.
We are leading an initiative called “Forge the Future,” which our companies commissioned over a year ago with the intention of contributing to Pennsylvania’s economic advancement. We live and work here, along with thousands of our employees, and are invested in the success of our state and its citizens. The first phase of this effort has been focused on a comprehensive analysis to get a clear picture of the size of the economic opportunity afforded our commonwealth by its vast natural gas resources, and the priorities on which we should focus to reach our potential.
Pennsylvania’s abundant, clean and low-cost energy resource can be the engine of new growth sectors throughout the state. The most powerful way to build that engine is to create competitive tradeable clusters, with two characteristics. First, the clusters should be anchored to energy-intensive sectors in which low-cost energy — whether as electricity, heat or feedstock — generates a measurable and meaningful competitive advantage for companies in the state. Second, the clusters should use energy-intensive sectors as springboards to highvalue sectors, which harness other unique strengths of Pennsylvania and will position us for sustained growth and competitiveness in the global economy of the future.
What the analysis revealed is that Pennsylvania can achieve startling economic benefits by focusing its efforts around three major development strategies. First, increase gas-fired power and heating, to ensure that all Pennsylvanians benefit from low-cost gas for residential and commercial use. Second, develop economic clusters in petrochemicals, advanced materials and datadriven automated manufacturing — driving GDP and jobs growth and positioning Pennsylvania as an Industry 4.0 manufacturing leader. Finally, expedite key gas pipeline projects to help ensure stable and profitable gas production that is the key to unlocking Pennsylvania’s vast energy-driven economic potential.
If we aggressively pursue these strategies, the Forge the Future assessment shows that Pennsylvania, within the next decade, can potentially achieve the following benefits: a $60 billion increase in state GDP above the current trajectory; an increase of more than 100,000 family-sustaining jobs; conversion of half a million homes from fuel oil to low-cost gas for heating; three to five new ethane cracker plants in addition to the recently announced Shell facility; and roughly $3 billion annually in new state tax revenues.
Forge the Future is a factbased analysis, the results of which complement and connect with three independent studies that underscore the significance of the economic opportunities in play:
• The Team Pennsylvania Foundation in partnership with the Pennsylvania Department of Community and Economic Development conducted a comprehensive study via IHS Markit, Prospects to Enhance Pennsylvania’s Opportunities in Petrochemical Manufacturing, which forecasts $2.7 to $3.7 billion in investments in natural gas liquid assets as well as the opportunity to attract additional cracker plants, and petrochemical and plastics manufacturing.
• The American Chemistry Council’s study, The Potential Economic Benefits of an Appalachian Petrochemical Industry, illuminates the same significant investment, jobs and tax revenue gains, and notes that diversifying our nation’s petrochemical infrastructure would lessen the economic and other disruptions from tropical storms. Hurricane Harvey serves as an exclamation point on this observation.
• A geologic study on creation of an Appalachian storage hub for natural gas liquids, conducted by the West Virginia University Energy Institute in partnership with the Petroleum Technology Transfer Council — Eastern Region, shows we have several locations where subsurface storage facilities can be developed.
Forge The Future is intended to be the first step toward development of an ambitious and targeted growth agenda which, if implemented, could dramatically improve the economic outlook for all Pennsylvanians, and go a long way toward addressing — and helping to finance the solutions for — many of our challenges. To be successful, this will require a coordinated effort across Pennsylvania that includes leaders in the business, government, economic development, academic and nonprofit communities. In the coming months, we will be engaging business and other leaders from all regions of the commonwealth to seek their ideas and input on targeted statewide initiatives.
Working together with a sense of urgency, we are confident that Pennsylvania can forge a brighter and more prosperous future for all its citizens if we maximize the unprecedented opportunity that’s right under our feet. A growing, energy-enabled Pennsylvania economy, with increasing revenues for businesses, workers, families and our government, will be more than a game-changer. It will be a mindchanger. Wouldn’t it be great to turn our thoughts from squeezing harder to find sustainable revenue sources to address our problems to deciding how, and how much, we can invest in solving them?