The Pennsylvania equation is simple: business-led initiative + state’s natural gas reserves = economic growth. And not just revenue growth, but also more jobs and more people in the state, which is located within the third-largest natural gas and natural gas liquids (NGLs) field on the planet.
Unlocking the economic potential of those natural gas reserves is the goal of the Forge the Future initiative — a project initiated by state businesses that is expected to have an astoundingly positive impact on the state overall.
“Job creators who are putting capital at risk are stepping up to say, here is what Pennsylvania needs to do if it wants to maximize this opportunity,” Kevin Sunday, director of government affairs for the Pennsylvania Chamber of Business and Energy, told Pennsylvania Business Report on Oct. 30.
“The potential gains are enormous – 100,000 jobs, a $60 billion boost to GDP, and a $2 billion increase in state tax revenues from increased business and hiring,” Sunday said.
Sunday answered questions for Pennsylvania Business Report related to the newly released Forge the Future: Ideas for Action, a report detailing initiatives that could be undertaken to hasten energy-enabled economic development in Pennsylvania. The new report focuses on Phase II of the Forge the Future project.
Phase I of the project was a statewide economic study paid for by Chevron and Peoples Gas toward establishing a strategic direction for economic opportunities resulting from the state’s natural gas reserves.
“What started as a project of Chevron and Peoples Gas, with a Steering Committee that included the Allegheny Conference of Greater Philadelphia, has now grown to include partnerships with the PA Chamber of Business and Industry, PA Manufacturers’ Association, and some 100 businesses, schools and organizations,” according to the new report.
Ideas for Action highlights specific actions the commonwealth should implement to capitalize on its world-class energy assets and grow its way to more revenue, population and job growth, said PA Chamber President and CEO Gene Barr last month.
“Among Pennsylvania’s greatest attributes are our vast energy resources, which includes some of the largest natural gas reserves in the world,” Barr said. “Unfortunately, the commonwealth’s uncompetitive tax structure and a lack of infrastructure that would get the gas to market are causing us to lose out on economic opportunities.”
In fact, according to Sunday, reforming the state’s tax code to make Pennsylvania more attractive to investment in an increasingly competitive global environment — and aligning workforce development efforts to make sure there are enough skilled workers to fill these jobs — is of the utmost importance.
“We also need leadership in Harrisburg that is willing to stand up and say, ‘We want these jobs, we want these industries here. We will work with you to get these projects through the labyrinth that is state government.’ The optics matter just as much as the policy,” he said.
Barr noted that Pennsylvanians deserve a better tax code; hence, the report suggests an active, strategic agenda toward making economic growth via energy a reality.
“It should serve as a catalyst for a much-needed statewide effort to help advance a stronger economy and ensure that Pennsylvania remains a world-class energy hub for generations to come,” Barr said about the Phase II report.
There are other reasons, too, said Sunday, who pointed out that Pennsylvania’s population growth is stagnating, with the only segment experiencing any growth being the 60+ demographic. At the same time, he said, human services and education costs across the state are rising.
“Therefore, our very ability to provide basic government services depends on us not only addressing cost drivers but championing economic growth,” Sunday told PBR. “The multiplier effects in making Pennsylvania a hub for advanced manufacturing, robotics, and distributed power are huge and will pay off for decades to come.”
The collaborative nature of the Forge the Future effort also will continue to include manufacturers, energy producers, power generators, consulting firms, organized labor, colleges and universities as the initiative moves forward, added Sunday.
“We have been engaged as a member of the steering committee, helping define the goals, strategy, and tactics of the effort, as well as communicating the importance of the project to both our members and key decision-makers in Harrisburg,” he said, referencing the PA Chamber’s involvement.
Additionally, “the goals envisioned in this report are key to the chamber’s ongoing advocacy efforts to improve Pennsylvania’s climate for job creators,” Sunday said.
The Ideas for Action report identified four primary areas for Pennsylvania initiatives, according to the PA Chamber. They are to:
- Create awareness and education through a communications and education effort that involves the energy industry, the state’s business community, and government leaders;
- Prioritize energy by instituting a cabinet-level energy official with a staff and/or team, as well as the necessary funding to lead a successful energy-enabled economic development strategy;
- Review and reform tax policy and incentives to better maximize downstream development of industries that will use the state’s natural gas and NGL resources; and
- Collaborate on state workforce development and identify opportunities for broad-based collaboration.
“Right now, only a fraction of Pennsylvania’s natural gas reserves have been captured,” said Rob Wonderling, president and CEO at the Chamber of Commerce for Greater Philadelphia. “The state is currently sitting on untapped opportunities that could propel its economy and turn the commonwealth into a leader in the 21st-century global economy.”
David Taylor, president and chief executive of the Pennsylvania Manufacturers’ Association, said it’s time for the state to “look ahead to a diversified economy.”
“Pennsylvania’s vast energy resources can help our state become an epicenter of next-generation advanced manufacturing and drive significant job growth across the commonwealth,” Taylor said. “But the window of opportunity for Pennsylvania to realize this vision is short. We must take action now.”
With the release of the Ideas for Action report, the PA Chamber said Phase III of the Forge the Future initiative will involve a concerted effort from businesses, academia, organizations, associations and government partners to implement the ideas highlighted in the report.
Read the Phase II report in its entirety here.