Marcellus Shale boom cuts costs for Pennsylvania ratepayers

Susan Phillips

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Susan Phillips tells stories about the consequences of political decisions on people's every day lives. She has worked as a reporter for WHYY since 2004. Susan's coverage of the 2008 Presidential election resulted in a story on the front page of the New York Times. In 2010 she traveled to Haiti to cover the earthquake. That same year she produced an award-winning series on Pennsylvania's natural gas rush called "The Shale Game." She received a 2013 Alfred I. duPont-Columbia University Journalism Award for her work covering natural gas drilling in Pennsylvania. She has also won several Edward R. Murrow awards for her work with StateImpact. In 2013/14 she spent a year at MIT as a Knight Science Journalism Fellow. She has also been a Metcalf Fellow, an MBL Logan Science Journalism Fellow and reported from Marrakech on the 2016 climate talks as an International Reporting Project Fellow. A graduate of Columbia School of Journalism, she earned her Bachelor's degree in International Relations from George Washington University.

October 27, 2017 | 2:50 PM

The township hopes the resolution spur legislative action to address royalty complaints.

Lindsay Lazarski/WHYY

A Cabot Oil and Gas well site in Northeast Pennsylvania. The Marcellus Shale gas boom has reduced utility bills for residents by 40 percent on average.

Pennsylvania’s Marcellus Shale gas boom has significantly cut energy costs for consumers across the state, according to a new study released Friday by the University of Pennsylvania. Residential gas customers have seen a price drop of 40 percent on average, compared to costs ten years ago. Before Marcellus production ramped up, Pennsylvania produced just one percent of the nation’s supply of natural gas, but today the state accounts for 16 percent. Production jumped 2,800 percent in the ten-year period covered by the report.

“That additional supply has helped drive prices down at a significant savings for consumers.” said Christina Simeone, policy director with Penn’s Kleinman Center for Energy Policy and author of “Pennsylvania’s Gas Decade.”

Simeone says electricity prices have also gone down, due to the shift from coal to natural gas power plants.

“The electrical power sector is now the number one user of gas both in Pennsylvania and nationally,” she said.

The costs for power companies dropped on average 79 percent in the past decade. Simeone says the reduction in the price of gas and electricity for ratepayers has helped reduce the number of utility shut-offs across the state.

The cost reductions are for the price of the residential gas only. Distribution charges have actually increased as utilities work to replace old and dangerous infrastructure.

“Consumers are seeing their bills go down, but not down as much if these system improvements were not taking place,” she said.

Simeone says prices will eventually go up following an increase in newly built pipelines to ship Pennsylvania gas across the nation and overseas. The Federal Energy Regulatory Commission has approved 53 new pipeline projects, which Simeone says would double the state’s current pipeline capacity. But it’s unclear how much of a price increase would be caused by the new pipelines.

“Unlike debates about carbon tax and severance tax, which are very public debates, policy makers are not very aware of the price implications of pipelines,” she said. The report recommends more dialog on the economic impact of the pipeline building boom.