Pa. is an Energy Powerhouse in Region and Beyond

Pennsylvania is a powerhouse in U.S. energy production, ranking second in natural gas and total energy production, and third in coal production in the U.S. As a net exporter, the state produces significantly more energy than it consumes, ranking just 25th in total consumption per capita. This allows the state to send surplus energy and raw resources to other states, and even abroad, helping to significantly bolster the state’s economy.

The Marcellus Shale has helped the state become one of the largest energy producers in the country, particularly regarding natural gas. This abundant resource generates billions in revenue from energy sales, tax income, and royalties. The industry also supports thousands of jobs in extraction, refining, and power generation. The relatively strong energy sector helps keep local electricity prices relatively stable and helps ensure energy security for the region.

In recent years, Pennsylvania’s electric generation capacity from natural gas has grown significantly. In 2013, the state's natural gas capacity was just under 12 million kilowatts (kW), growing to almost 27 million kW in 2022, representing over a 127% increase. At the same time, coal capacity dropped more than 50%, representing a significant shift to cleaner energy sources, with a similar drop in coal-related CO2 emissions.

Additionally, Pennsylvania’s energy exports play a vital role in national energy independence by reducing reliance on foreign energy sources. The state’s natural gas exports, in particular, have helped lower energy costs in neighboring states while making the U.S. a major player in global energy markets.

While the Pennsylvania energy sector is quite stable, the sheer dependence on the sector introduces vulnerability due to potential market volatility. Energy resources, and by extension, energy itself, are vulnerable to natural market pressures, such as changes in supply and demand. Sudden drops in demand, like those caused by winter weather conditions or increased renewable energy adoption, can lead to job losses and economic slowdowns in the region.

For example, Pennsylvania’s small-scale solar generation capability in January 2018 was 22,000 megawatt-hours (MWhs), growing to over 57,000 MWhs in January 2023. However, this 57,000 MWh figure represents around a 50% decrease in the solar production capabilities compared to July of the previous year, due to decreased generation capability in winter months. This dramatic change illustrates just how volatile the PA energy industry can be.

Infrastructure is another major concern. Aging pipelines, transmission lines, and power plants require ongoing investment and maintenance. Any failure in the energy supply chain, whether due to extreme weather, cyberattacks, or ever-changing environmental regulations, could impact Pennsylvania’s ability to continue to export energy efficiently. Additionally, increased energy production comes with environmental risks, including concerns about water contamination, land use conflicts, and emissions from fossil fuel extraction.

The energy sector plays a central role in Pennsylvania’s overall economy. Natural gas and coal revenues contribute significantly to state and local tax bases, funding schools, infrastructure, and public services. However, the heavy reliance on energy exports makes the economy vulnerable to downturns in fossil fuel markets. As states and industries shift toward more renewable energy production, Pennsylvania faces the challenge of balancing its large, fossil fuel energy-based economy with a growing demand for cleaner alternatives.