Marcellus Shale Gas Helping Households Save During Cold Winter

Jan 05, 2018

Pennsylvania residential gas prices down 40% since 2007.

A record-setting cold snap has consumers across the country eyeing their heating bills, wondering what’s in store for them as the temperature outside continues to plummet. But here in southwestern Pennsylvania, natural gas customers are still saving money, despite the sub-zero lows that have accompanied an arctic blast of freezing weather. The reason for the savings? A steady supply of affordable natural gas from the Marcellus Shale.

It’s a trend that has been several-years-long in the making. While historically, Pennsylvania gas consumers paid retail prices higher than national averages – it wasn’t long after natural gas producer Range Resources drilled the first successful Marcellus Shale well in Washington County, PA that things began to change.

According to a report from the Kleinman Center for Energy Policy at the University of Pennsylvania -- residential gas prices have fallen 40 percent in the state since 2007. The savings have been even more significant for electrical power producers – the biggest consumers of natural gas in the state – they are paying 79 percent less for the natural gas they purchase in order to provide power to their customers. All of this translates to lower utility bills, both natural gas and electric, for local consumers.

Right now, as the coldest temperatures in years blanket the nation, natural gas savings are even more apparent when compared to costs for other sources of home heating. It has been reported that the colder weather could increase winter heating costs by 45 percent for some customers who rely on residential heating oil.

 Overall, according to the U.S. Energy Administration, energy costs across the country are projected to grow by 12 percent for natural gas, 17 percent for home heating oil, 18 percent for propane and 8 percent for electricity.

But while natural gas prices are projected to remain lower in Pennsylvania and other parts of what is known as the Appalachian Basin, prices are skyrocketing in places like New England, where natural gas is harder to come by due to a shortage of pipelines needed to transport the product to these critical markets. As reported in Boston this week: the cold snap has made New England the world’s most expensive gas market, as prices have more than tripled to their highest levels in over three years. In the meantime, due to their proximity to the Marcellus Shale, customers in western Pennsylvania, Ohio, and West Virginia are still seeing some of the lowest natural gas prices for home heating in the country.

Importantly, while individual local households are enjoying the benefits of lower utility bills due to Marcellus Shale produced natural gas, the U.S. economy is also being positively impacted. A new report released by the American Gas Association (AGA) finds that the abundant supply of natural gas in this country has saved American businesses approximately $79 billion since 2009. The report also finds that natural gas prices for commercial customers are the lowest they’ve been in more than 40 years.

The Appalachia region, and more specifically the Marcellus Shale, continues to drive growth in natural gas production across the country. Pennsylvania is critical to that growth, coming in as the second largest natural gas producing state, only behind Texas.

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