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Infrastructure is moving in

Even though the price of gas has slowed the growth of the natural gas industry, production in Pennsylvania is moving right along and continues to break records, said the President of the Marcellus Shale Coalition David Spigelmyer.

Wells are producing more with the help of hydraulic fracturing, a method that uses high-pressure liquid to break through the underground rock formations allowing access to reservoirs of gas.   But for gas to get to the market, infrastructure is needed, said Spigelmyer, and there are signs that it is starting to fall into place.

At the moment, the Environmental Regulatory Commission is unsure about giving the final approval to a pipeline that would stretch 124 miles from the Marcellus Shale region of northern Pennsylvania into New York.  Spigelmyer explained there are several other pipeline projects in development that will help fill emerging gaps in service.

Currently, there is not a pipeline to move natural gas from the Marcellus region to Philadelphia, said Spigelmyer.  UGI Energy Services announced it would spend $150 million on a pipeline that would run 35 miles from the Marcellus region to the site where a former coal plant is being converted to natural gas power.  The plant is located in Snyder County.

An ethane cracker plant has also been planned in Beaver County.  The plant will not only help the natural gas industry but it will also manufacture several different products including food packaging, house siding, tires, footwear and detergent.

This fall, Shell Chemical announced it is considering the idea of buying the land for the ethane cracker plant in Beaver County.  The Marcellus shale produces two types of gas, dry gas and wet gas.  The dry gas is produced in northcentral Pennsylvania and is just what is name indicates: natural gas, which is used for heating homes.  Wet gas is produced in southwestern Pennsylvania and contains liquid gases, such as ethanol and butane.  The cracker plant will be able to convert the ethanol in the wet gas into ethylene, which is used to make plastic.

Natural gas production in Pennsylvania has skyrocketed since 2006 when the exploration and production of the Marcellus shale there began. Before the Marcellus boom, Pennsylvania only produced enough natural gas to meet one-quarter of its own needs, Spigelmyer explained.  Today, the state provides 20 percent of the nation’s natural gas.

As mentioned before, falling natural gas prices have caused a slowdown in the industry’s growth.  According to an October analysis by the Energy Information Administration (EIA), production in the Marcellus shale has outpaced the capacity of the pipeline network to get gas to market since 2012.  The Sharon Herald reports the EIA also recorded that, “spot prices in the Appalachian markets, including the Marcellus region, have dropped below $2 per million British thermal units.”

Pennsylvania legislators are now considering ways to help push the industry’s growth.  Sen. Gene Yaw, R-Lycoming County, presented a bill that would develop incentives for utilities to broaden their service areas to increase the natural gas market.  Yaw’s bill passed the Senate but came to a halt in the House.  He says he will present the bill again next year.

The Sharon Herald reports, these “efforts come as incoming Gov. Tom Wolf enters office having campaigned on a platform that suggests he’ll tax gas drillers to boost school funding. The industry and conservative lawmakers, who worry that a tax will slow drilling’s expansion, have opposed the idea.”

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