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Shale-Related Projects Set Record Investment Level in Southwest Pennsylvania Last Year

The Pittsburgh Regional Alliance (PRA) said this month that it tracked the largest-ever amount of capital investment in the 10-county region surrounding the city in southwestern Pennsylvania last year, attributing most of the $10.2 billion recorded to shale gas-related growth.

PRA, the economic development marketing affiliate of the Allegheny Conference on Community Development, tracks capital investment and economic development deals across the region in an annual scorecard that serves as an economic indicator and helps guide its own strategies. Projects announced by Royal Dutch Shell plc, Tenaska and Energy Transfer Partners LP (ETP) in 2016 helped the region to a "banner year" in which the investments recorded by PRA since 2007 hit their highest levels.

Shell's decision in June to move forward with a $6 billion investment to build a world-scale ethane cracker in Beaver County easily topped the list. ETP's announcement that it would spend $1.5 billion on a 110-mile natural gas gathering system that would originate in Butler County and a cryogenic processing facility in Washington County also pushed up economic commitments in the area. Tenaska also broke ground last year on a $785 million gas-fired power plant in Westmoreland County that will generate 925 MW of electricity when it enters service late next year.

"The table is set for the region's future by leveraging the combined impact of manufacturing and energy," said PRA President David Ruppersberger. "Without the natural resource of the shale gas -- for which this region once pioneered extraction -- an ethane cracker would not have been a consideration."

While investments in the region reached a high water mark last year, PRA noted that there was a drop in the area's energy sector deals during the same time. The organization recorded 16, which was down from 31 in 2015. Energy-related manufacturing deals also dropped by 50% year/year from eight to four. PRA said the commodities downturn slowed regional investments, along with the fact that upstream operations are already firmly rooted in the state.

Shale gas continued to play a key role in the regional economy. The 2016 scorecard tracked deals across five key sectors to record 245 of them, including attractions, retentions, expansions, and infrastructure and real estate development projects.

PRA said the total job impact anticipated from those deals is 11,344, or 5,761 new jobs and 5,583 retained jobs. The greatest total job impact, PRA found, is expected to be in manufacturing (3,667), healthcare (2,893) and energy (2,288).

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