First Do No Harm to Pa.’s Energy Sector

Pennsylvania’s energy industry is growing, but state government intervention through new taxes or special interest bailouts would threaten the positive trends of job growth and low energy prices.

Pennsylvania ranked fifth among states in oil and gas jobs last year, according to a report by the Texas Independent Producers and Royalty Owners Association.

The state’s 30,193 oil and gas jobs represented an increase of 7.6 percent from 2017, the second consecutive year of employment growth.

Ranked behind the states of Texas, California, Oklahoma and Louisiana, the Keystone State employed three percent of the country’s oil and gas workers.

These are good-paying jobs with an average wage of $99,140, which is 85 percent higher than private sector wages in Pennsylvania. Altogether, oil and gas workers collected $3 billion in payroll.

In terms of the number of oil and gas businesses, Pennsylvania ranked sixth with 1,375 companies that purchased $13 billion worth of U.S. goods and services — 43 percent of which were bought in the state.

Dipping to historic lows in 2016 were both the cost of natural gas sold to power producers and the price of wholesale electricity. While both have risen slightly since, the price of retail electricity over the past five years has remained steady, a stark contrast to the price fluctuations of previous decades. Prices favorable to consumers are driven in part by the growth of natural gas power plants. The Marcellus Shale Coalition reports that since 2016 16 natural gas power plants have come online or under construction across the commonwealth.

Policy makers should consider the recent rebound in oil and gas job growth and high wages before imposing additional burdensome taxes, new subsidies for nuclear energy and regulations that would dampen the investment of oil and gas producers in Pennsylvania.