The Marcellus Shale represents tremendous opportunities for Pennsylvania: Clean-burning, domestically produced energy; jobs in the natural gas industry and associated businesses; and economic benefits to individuals and communities across the Commonwealth.
Formed about 380 million years ago, the Marcellus Shale is a deep geologic formation that covers more than 95,000 square miles through parts of New York, Pennsylvania, Ohio and West Virginia. Pennsylvania is at the heart of the Marcellus Shale, with the formation underlying about 60 percent of the state.
The Marcellus is found between 4,000 and 8,500 feet below the surface and is 50-200 feet thick. This shale formation is rich in organic materials from plants and animals. As these organics were compressed by millions of years of geologic pressures, natural gas was trapped in the shale’s fractures. The Marcellus Shale is estimated to hold over 500 trillioncubic feet of natural gas. Even if only 10 percent of the gas is recovered, it would be enough to fuel the entire United States for two years and would be worth over $1 trillion.
Geologists and petroleum engineers have long known about the Marcellus Shale. Recent improvements in technologies such as three-dimensional imaging and horizontal drilling, however, have made it economically viable to produce natural gas from this and other shale formations in the United States. In addition, Pennsylvania’s close proximity to major Northeastern markets have made it economically attractive to develop the Marcellus Shale.
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Natural gas is a key bridge fuel to the renewable-energy technologies of the future. Natural gas from the Marcellus Shale is important because it is a clean-burning energy source found right here in Pennsylvania, an energy source that can be produced in an environmentally sound manner. It is providing jobs in the natural gas industry and associated businesses – and will for years to come.
But the benefits don't stop there. Natural gas producers already have invested billions in lease and land acquisitions, new well drilling, infrastructure development and community partnerships.
A study conducted by researchers from Penn State University in 2010 points to the economic potential of the Marcellus Shale in Pennsylvania. Using conservative assumptions for natural gas production, commodity prices and other factors, the study reached the following conclusions:
With a contribution of more than $7 billion annually, the oil and gas industry currently plays an important role in the state’s economy. From direct employment and compensation and beyond to a wide variety of businesses – everything from motels and restaurants to repair shops and rail yards – the industry brings a wealth of opportunity to small towns and large urban areas alike. The industry’s direct economic impact, which includes drilling, extraction and support activities, brings in $4.5 billion each year. Oil and gas workers earn competitive wages, with nearly $350 million infused annually into local and regional economies. In addition, the increased demand for energy has brought this industry to the forefront of economic development. PIOGA is working hard to expand natural gas use – urging officials to adopt policies that encourage natural gas as a transportation fuel and make Pennsylvania attractive to industries that use natural gas as a feedstock.
Another large economic contribution is found in the industry’s payments to landowners who lease property for oil and gas drilling activity. More than $200 million is paid each year to landowners in the form of lease payments. Once a well is drilled and producing gas, landowners share in the benefits from royalty payments that are paid over the life of the well. These payments, made directly to property owners, are a dominant source of wealth and economic sustainability for property owners, particularly in rural counties. The payments have grown tremendously in recent years as natural gas production grows.
Over 88,000 men and women hold positions that can be traced to direct, indirect and induced jobs supported by oil and gas development. With increased drilling and production of Marcellus Shale across the state, the demand for qualified individuals to fill high-paying jobs will grow to meet the needs of gas companies and related businesses.
In addition to all of the jobs that go into directly operating gas drilling rigs, opportunities are also available in a number of professional and skilled areas, including:
PIOGA and its education and training partners are working to bring interested students into these fields, as the need is significant and will continue for many years, even decades, as the Marcellus Shale resource is fully developed.