Cheap Fuel Prices Hurting Shale Gas Industry
PITTSBURGH (KDKA) – Natural gas prices are falling in Western Pennsylvania and while it may be good for consumers, it may not be good for the Marcellus Shale gas industry.
The falling prices have become a thorn in the side of the burgeoning shale gas industry and production has now scaled back from 140 active rigs three-years ago, to just 75 today.
"The development of the Marcellus Shale and more recently the Utica shale has brought a lot of gas supply into the market," Joe Gregorini from Peoples Natural Gas says.
From their highs six-years ago, gas prices have dropped steadily in Western Pennsylvania, and have dropped 5 to 10 percent this year. It's all due to the ready supply of gas produced right here in our own back yard.
"You look at people's gas bills back in 2008, the average bill was $150 a month throughout the course of the year, today it's about half that," Gregorini says.
The Shale gas industry says it's created a quarter of a million jobs in Pennsylvania but now that job growth is threatened as investment in Shale development is slowing.
"We're going to see some tightening in shale gas development in the capital market. I didn't say it would go away, I said it would tighten," David Spigelmyer of the Marcellus Coalition says.
In Western Pennsylvania we have a glut of Shale gas, some 15-hundred wells are tapped but the gas just sits there. The problem is the region lacks the pipelines and other infrastructures to bring that gas to Philadelphia and markets throughout the Northeast.
Governor Tom Wolf has pledged to enact new taxes on Shale gas development but the industry says this is an especially bad time for that.
"I think it's an inopportune time especially when the infrastructure is being built to gather the gas, and move that gas to market," Spigelmyer said.
2015 will be a challenging year for the Shale gas industry, but the silver lining for the consumer is it will be cheaper to heat your home this winter.
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