Atlantic Sunrise pipeline project to generate US$1.6 billion economic impact

Williams has announced that the design and construction of the Williams Atlantic Sunrise natural gas pipeline project will generate approximately US$1.6 billion in additional wages, revenues and investments to the regional and state economies of Pennsylvania and Virginia, according to a study authored by researchers at The Pennsylvania State University.

‘Economic Impacts of the Atlantic Sunrise Pipeline Project,’ lead author Seth Blumsack, Associate Professor of Energy Policy at Penn State, finds that the proposed project would have a major, positive economic impact on the Pennsylvania and Virginia economies where new pipeline facilities would be built and operated.According to the researchers, the design and construction of the Williams Atlantic Sunrise pipeline project could support approximately 8000 jobs and an associated US$870 million in economic value added during the construction period. Additionally, the ongoing operation of the pipeline would generate approximately US$1.9 million in annual economic impact, supporting 29 jobs.

The economic modelling exercise was funded by Williams and uses IMPLAN, a widely used commercial software designed to perform input-output economic analysis, to estimate impacts on workforce demands, economic output and value added to each of the counties where construction is expected to occur.

In a related report titled ‘Estimating the Impact of the Atlantic Sunrise Project on Natural Gas Consumers,’ lead author Andrew Kleit, Professor of Energy and Environmental Economics at Penn State, found that consumers served by the Transco pipeline in the southeast and Mid-Atlantic regions could have saved US$2.6 billion from 2012 - 2014 due to increased access to lower-priced Pennsylvania gas supply because of Atlantic Sunrise.

“Penn State’s report clearly shows how vital this project and others like it are for Pennsylvania’s economy,” said Pennsylvania Chamber of Business & Industry President Gene Barr. “We need to take advantage of all of our natural resources, and the best way to do that is through more gas infrastructure. The Atlantic Sunrise expansion to the Transco pipeline is projected to support thousands of jobs during construction and thousands more in the drilling and supply chain industries. All told, we are looking at the potential for more than a billion dollars of economic activity as a result of this project.”

Key findings

Key findings from the analysis include:

  • The design and construction of the project will require an investment of approximately US$3 billion by Williams and the co-owner of the greenfield portion of the project.
  • The majority of the direct expenditures will be in Pennsylvania, with some materials and labor sourced from other states.
  • The multi-year construction phase of the project is expected to result in overall economic impact of US$1.6 billion and could engage 8270 workers in Pennsylvania and Virginia; the 10 county Pennsylvania region of the project is expected to recognise the majority of this impact.
  • The ongoing operations of the project are predicted to generate an annual economic impact of US$1.96 million and support 29 direct and indirect jobs in two Pennsylvania counties (Columbia and Wyoming) where two new greenfield compressor facilities are proposed.
  • Significant federal, state and local taxes would also be generated during the approximate one-year construction phase, including an estimated US$31 million in federal taxes and US$18 million in state taxes across all county locations hosting construction activity for the project.
  • “Construction and ongoing operations of the project look to be economically beneficial to the counties the pipeline would cross, as well as to Pennsylvania and the region,” said Associate Professor Seth Blumsack, John and Willie Leone Family Department of Energy and Mineral Engineering, Pennsylvania State University.

The Atlantic Sunrise project

The Atlantic Sunrise project is a proposed expansion of the existing Transco natural gas pipeline, which currently transports about 10% of the nation’s natural gas. The Atlantic Sunrise project would add about 200 miles of new pipe to expand and extend the reach of the existing Transco pipeline to northeastern Pennsylvania, transporting about 1.7 billion ft3/d of clean, natural gas– enough to serve approximately 7 million homes.

“Anyone who has experienced a spike in their heating bills understands the importance of this project. There is a critical need for additional pipeline capacity in the region so that northeastern consumers can realise the full benefit of lower-cost energy,” said Transco General Manager Frank Ferazzi.

Adapted from press release by Hannah Priestley-Eaton

Published on 16/03/2015

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