NFIB Economic Briefing: Pennsylvania's Natural Gas Market Outlook

Date: January 31, 2017

Insight from the Chief Economist for the American Petroleum Institute

NFIB Pennsylvania recently hosted state lawmakers, businesses, and community banks for an economic briefing on Pennsylvania’s Energy Future. Our distinguished guest was the Chief Economist for the American Petroleum Institute, Erica Bowman, who discussed the low prices of natural gas in Pennsylvania and how, despite continued low prices, there have been recent economic stirrings in that energy market which bode well for our state.

Bowman says there is an abundance of natural gas so the state’s focus must be on creating markets.  Recently, some transport projects have come on line in Pennsylvania, in the form of pipelines or export terminals. She believes continued support of ways to get the gas to market are critical to Pennsylvania’s future economic success.  She also stressed that the state should not create policy barriers in the form of mandates, regulations and increased taxes, but should let that free energy market flourish.

Bowman says when natural gas wells are producing, broader business activity abounds and all Pennsylvanian’s benefit.  For example, the needed pipelines spur metal production, sand, and construction companies. Other services and suppliers benefit. Employees at every level improve the state’s budget by paying income tax.  Those families will spend their income on housing, food and goods and pay sales tax. 

On the question of whether the state should impose a severance tax on natural gas, Bowman said that will increase the cost to the producers who are currently competing in a bear market with very low gas prices. She believes it will be critical to the success of Pennsylvania’s natural gas market to be able to export its product overseas. Our state could be tapped to supply the eastern United States, but in some northeastern states there is significant opposition to new pipelines. 

NFIB Pennsylvania supports affordable energy costs for our member businesses. Bowman says even though prices for natural gas remain very low, there is improved activity in the marketplace lately. 

Here is the the full presentation by economist Erica Bowman: 

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