Why You Should Take the Appalachian Basin Seriously

For years, shale development in the Appalachian Basin has been routinely — and erroneously — met with skepticism. Anti-fracing activists and naysayers from national and regional media outlets have, at times, been quick to discount both the Marcellus and Utica shales with headlines like “Shale Boom? What Happened?”

“Ohio’s Utica Shale Boom Is Not Guaranteed” and others implying the plays would be a “bust.”

Frankly, given the decades of job loss and devastation from manufacturing and other industries in the region, it’s not surprising there has been a certain level of skepticism over the prospect of long-term shale development in Pennsylvania, West Virginia and Ohio. But as numerous recent reports have made clear, those doubts are unfounded. The fact is the Appalachian Basin’s Marcellus and Utica shales are propelling U.S. natural gas development to new heights and should be taken seriously.

In fact, that’s exactly what a recent report from the Energy Information Administration (EIA) highlighted. In the report, the EIA described how the Appalachian Basin has been driving the growth of natural gas in the United States since 2012. And not just by a small amount — the basin has increased natural gas production by more than 14 billion cubic feet per day (Bcf/d) since 2012, growing from 7.8 Bcf/d in 2012 to an incredible 23.8 Bcf/d in 2017.

No other region of the country has seen the level of growth in natural gas production that the Appalachian Basin has experienced over the last five years. But how much gas is that really?

Appalachian Trail MarkerThe wells in the Appalachian Basin produce enough gas every single day to run 85,680 televisions nonstop for a century, provide electricity to 578,697 houses for a year, take a cross-country road trip over 2 million times and travel to the moon and back 13,304 times!

Yes, the little engine that could is not just proving the critics wrong, but as Deloitte recently explained, it is completely blowing their doubts out of the water as not only a top producer of natural gas nationally, but globally as well. If the Appalachian Basin were a country, today only the United States and Russia would produce more natural gas. It’s a sign of how far the basin has come since the development of the Marcellus Shale began a little more than a decade ago.

And from what we can tell, this is only the beginning, yet already it’s having major positive impacts on the tri-state area.

The significance of shale development in this region is a big deal for many reasons. For one, it’s having immediate benefits on local communities throughout the region in the form of higher tax revenues, improved roads and lower consumer bills. Having an ample supply of natural gas feedstock is attracting manufacturers to return to the Rust Belt, even helping to bring steel manufacturing back to the region. Serious talks are underway to build an Appalachian storage hub for natural gas liquids that would make the region even more attractive to manufacturers.

Further, the abundance of shale is inspiring unheard-of investment in the region for long-term, job-creating projects. We’re talking not one, but several ethane cracker plants could soon be coming to the tri-state area. That’s truly incredible given these types of plants haven’t been built outside of the Gulf of Mexico in decades.

Appalachia is also already receiving investment dollars for other major projects. For instance, plans are in the works for more than $23 billion worth of new federally regulated pipelines, and more than $21 billion for new natural gas-fired power plants that are helping to lower carbon emissions in the region.

When President Trump visited China in November and discussed potential for Chinese investment in the U.S., it was not the traditional oil-rich states that interested investors. No, the biggest recipient of the total $250 billion discussed is slated to come to the Appalachian Basin. West Virginia is in the process of securing $83.7 billion in investments for shale development and related chemical manufacturing.

Another reason why the Appalachian Basin should be taken seriously is the incredible political influence the region continues to have on energy policy and political outcomes, given that both Ohio and Pennsylvania are major political battleground states with significant economies of scale and sectors of influence. Successful, long-term development in this region of the country — driven by shale — could have sweeping impacts on the upcoming midterm and gubernatorial elections, and even the next presidential election.

We’ve already seen the impact this development had on the immediate past presidential election, which wasn’t even focused on the promise of shale development bringing the region back from the brink of economic collapse. In fact, shale was only marginally brought up by politicians making their way through swing states. It was certainly not a central talking point, as it wasn’t a sexy enough issue nationwide to overcome the politics that were at the forefront for other energy sources. However, while politicians have been debating how to save certain energy industries, oil and natural gas operators in West Virginia, Pennsylvania and Ohio have been quietly leading the nation in natural gas production. And, in doing so, it has been shale (and only shale) that has helped to save communities along the Ohio River with virtually no pomp and circumstance.

All of these reasons demonstrate that shale development in Appalachia is here to stay and is now a major player on the national and global stage. After years of litigating the Appalachian Basin, the jury is out — it’s time to take the Marcellus and Utica shales seriously.

 

About the author: Jackie Stewart is a Senior Director in FTI Consulting’s Strategic Communications segment. She is also part of the segment’s Public Affairs practice and Energy and Natural Resources industry practice. Based in Ohio, she is also Field Director for Energy in Depth. Stewart has more than a decade of experience in government and community relations, public policy and event management.

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