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Association for Energy Economics October 26, 2015

Explore the impact of the Marcellus Shale gas revolution in the U.S., with 16 bcf/day production and PA as the second largest gas producer.

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Association for Energy Economics October 26, 2015

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  1. Association for Energy EconomicsOctober 26, 2015 David Spigelmyer President Marcellus Shale Coalition

  2. Shale Gas Revolution • Marcellus – the largest unconventional shale gas play in U.S. • 489 tcf of technically recoverable gas (T. Engelder ‘09) • 16 bcf/day – 40% of all U.S. shale gas production • 7 x increase in production (2010-2014) • PA – 2nd largest natural gas producer in U.S.

  3. STATE OF THE INDUSTRY

  4. Drilling Activity in PA • 8858 unconventional wells • Drilled or in process of being completed • 6326 unconventional wells producing natural gas • 360 billion cubic feet/month • 4 trillion+ cubic feet/year • 20%+ of total U.S. production

  5. Drilling Activity in PA Source: PA Department of Environmental Protection

  6. Drilling Activity in PA Source: Baker Hughes

  7. Appalachian Price Collapse

  8. Governor Wolf - Latest Severance Tax Proposal • Voted Oct. 7th - included in amendment to HB 283 • Key components: • Maintain existing impact fee • 3.5% additional severance tax based on value • 4.7 cents/mcf volume tax • Equivalent to over 14% total severance tax • Generate $97 million in FY ‘15-’16 (not $1 billion) • Also increase Personal Income Tax from 3.07% to 3.57% • Defeated 73 - 127

  9. Benefiting Your Community • Overview of Impact Fee • Authorized by Act 13 of 2012 • Adopted by counties • Annual assessment per unconventional shale well (15+ years) • Collected & distributed by PA Public Utility Commission • Over $856 million collected since 2012 • Revenue allocated between host communities & statewide environmental priorities

  10. Benefiting PA Communities Impact Fee Revenues to Date

  11. Benefiting Pennsylvania Consumers • Electric prices down 40% since 2008 • Natural gas prices for end-use customers down 46% -64% since 2008 • Average annual savings > $1,200 per household

  12. Reduced Energy Costs Lower Purchased Gas Costs *1st Quarter 2008 & PUC-approved rate for 2012 *Residential heating customer using 15 mcf/month

  13. Market Opportunities Electricity generation, heating Combined heat and power applications Light and heavy duty transportation applications Feedstock for industries and other liquids use • Rebirth of manufacturing Exports

  14. The Ethane Factor

  15. Thank you! Marcelluscoalition.org

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