Overview

Resources and Consumption

Pennsylvania is rich in fossil fuels. The Appalachian basin, which covers most of the State, holds substantial reserves of coal, as well as minor reserves of crude oil and natural gas. Renewable energy resources are also abundant. The Susquehanna River and several smaller river basins offer considerable hydropower resources, and the Appalachian and Allegheny mountain ranges are areas of high wind power potential, as are areas both onshore and offshore along Pennsylvania’s short Lake Erie shoreline. The industrial sector is Pennsylvania’s leading energy-consuming sector, due in part to energy-intensive industries including aluminum production, chemical manufacturing, glass making, petroleum refining, forest product manufacturing, and steel production.

Petroleum

Pennsylvania is the leading petroleum-refining State in the Northeast. Although Pennsylvania is credited with drilling the first commercial oil well in 1859, the State’s current production is minimal, with output derived primarily from stripper wells that produce less than 10 barrels per day. Pennsylvania’s large-scale petroleum refineries are located along the Delaware River near Philadelphia and process primarily foreign crude oil shipped from overseas. These refineries supply regional Northeast markets. In addition to local Pennsylvania and New Jersey refineries, Pennsylvania receives propane via the TEPPCO pipeline from the Gulf Coast and by rail from other States and Canada. To reduce emissions of smog-forming pollutants, motorists in the heavily populated areas of southeastern Pennsylvania, including Philadelphia, are required to use reformulated motor gasoline blended with ethanol. The Pittsburgh area requires 7.8 RVP gasoline, a fuel specially blended to reduce emissions that contribute to ozone formation.

Pennsylvania, along with much of the U.S. Northeast, is vulnerable to distillate fuel oil shortages and price spikes during winter months, due to high demand for home heating. More than one-fifth of Pennsylvania households rely on fuel oil as their primary energy source for home heating. In January and February 2000, distillate fuel oil prices rose sharply when extreme winter weather increased demand unexpectedly and hindered the arrival of new supply, as frozen rivers and high winds slowed the docking and unloading of barges and tankers. In July 2000, in order to reduce the risk of future shortages, the President directed the U.S. Department of Energy to establish the Northeast Heating Oil Reserve. The Reserve gives Northeast consumers adequate supplies for about 10 days, the time required for ships to carry heating oil from the Gulf of Mexico to New York Harbor. The Reserve's storage terminals are located in Perth Amboy, New Jersey, and Groton and New Haven, Connecticut.

Natural Gas

Although minor, Pennsylvania’s natural gas production has grown in recent years. Pennsylvania remains dependent on several major interstate pipelines, most of which originate in the Gulf Coast region, to meet the majority of State demand. Two proposed projects could increase natural gas supply to Pennsylvania: an eastern expansion of the Rockies Express Pipeline system, which is expected to be completed in 2009 and a liquefied natural gas (LNG) terminal in Logan Township, New Jersey, just across the Delaware River from Philadelphia, that has been approved by the Federal Energy Regulatory Commission (FERC) but for which construction has not begun. Pennsylvania delivers over three-fifths of its natural gas receipts to New Jersey.

Pennsylvania's natural gas storage capacity is among the highest in the Nation, which allows the State to store the fuel during the summer when national demand is typically low, and quickly ramp up delivery during the winter months when markets across the Nation require greater volumes of natural gas to meet their home heating needs. Natural gas is used in Pennsylvania primarily for residential and industrial use, although its use for electricity generation has grown rapidly in recent years.

Coal, Electricity, and Renewables

Pennsylvania is a major coal-producing State. Northeastern Pennsylvania’s coal region holds the Nation’s largest remaining reserves of anthracite coal, a type of coal that burns cleanly with little soot. It is used primarily as a domestic fuel in either hand-fired stoves or automatic stoker furnaces. Although Pennsylvania supplies virtually all of the Nation’s anthracite, most of the State’s coal production consists of bituminous coal mined in the western part of the State, where several of the Nation’s largest underground coal mines are located. Enlow Fork Mine is the largest underground coal mine in the United States.

Large volumes of coal are moved both into and out of Pennsylvania, mostly by railcar, river barge, and truck. Pennsylvania transports close to one-half of its coal production to other States throughout the East Coast and Midwest. Pennsylvania coal demand is high, and it is one of the top coal-consuming States in the Nation. Pennsylvania’s coal dominates the State’s power generation market, typically accounting for more than one-half of net electricity production.

Pennsylvania’s electricity markets also rely substantially on nuclear power, and the State ranks second in the Nation after Illinois in nuclear generating capacity. Pennsylvania’s five operating nuclear plants have supplied slightly more than one-third of State electricity generation in recent years. Nuclear power has been an important fuel for electricity generation in Pennsylvania since 1957, when the first commercial U.S. nuclear power plant came online in Shippingport. The Shippingport plant was shut down and decommissioned in 1982 after 25 years of service. Pennsylvania’s nuclear power industry has experienced problems in the past. In 1979, an accident led to a partial meltdown at the Three Mile Island nuclear plant and became the most serious accident in U.S. nuclear power plant operating history, changing the U.S. nuclear industry and leading to sweeping changes at the Nuclear Regulatory Commission.

Pennsylvania is one of the top electricity-producing States in the Nation and electricity production exceeds State demand. Pennsylvania is among the largest users of municipal solid waste and landfill gas for electricity generation and produces substantial hydroelectric power. The State also produces a small amount of energy from wind. In December 2004, Pennsylvania adopted an alternative energy portfolio standard that requires electric distribution companies and generators in the State to supply 18.5 percent of Pennsylvania’s electricity from alternative energy sources by 2020.