Last Updated: December 21, 2023

Overview

Pennsylvania, with its abundant fossil energy resources, is a leading East Coast supplier of natural gas, coal, refined petroleum products, and electricity to the nation.¹ The Appalachian Mountains run diagonally southwest to northeast through Pennsylvania, dividing the Ohio River valley in the west from the Susquehanna and Delaware River valleys in the east.² These mountains and valleys hold rich coal reserves.^3,4 The Marcellus Shale, the largest U.S. natural gas field, follows the arc of the mountains and underlies about 60% of Pennsylvania, all but the southeastern part of the state.⁵ The state's temperate climate varies from the southeast, where it is influenced by the Atlantic Ocean, to cooler areas near the Great Lakes in the northwest, where weather fronts with frigid temperatures that trigger heavy Lake effect snowfalls often come from Canada.⁶

Pennsylvania ranks fifth in the nation in population, but three-fourths of the state's land is classified as rural.^7,8,9 About one-fourth of the state's residents live in rural areas and the state's population is concentrated around Philadelphia in the southeast corner of the state and Pittsburgh in the southwest near the border with Ohio.¹⁰

Although the state is among the top 10 consumers of natural gas, coal, petroleum products, and electricity, Pennsylvania is the second-largest net supplier, after Texas, of energy to other states.^11,12 Pennsylvania's gross domestic product (GDP) ranked sixth among the states in 2022.¹³ The largest contributors to the state's economy are the finance, insurance, real estate, rental, and leasing sectors, which make up about one-fifth of the state's GDP.¹⁴ Pennsylvania's total energy consumption per capita is below the U.S. average, but near the midpoint of the states.¹⁵ The industrial sector leads energy consumption in Pennsylvania, accounting for nearly two-fifths of the state's total energy use. The residential and transportation sectors each account for about one-fourth of state energy consumption, and the commercial sector uses the rest.¹⁶ Major energy-consuming industries that are large contributors to the state's GDP include chemical products manufacturing, natural gas and oil extraction; mining; food and beverage processing; and metals and machinery manufacturing.¹⁷

Natural gas

Pennsylvania is second only to Texas in estimated total proved natural gas reserves. The state's proved reserves more than quadrupled from 2011 to 2021 because of increased natural gas development in the Marcellus Shale.^18,19 The Marcellus formation extends under three-fifths of Pennsylvania as well as parts of West Virginia, New York, Ohio, and Maryland.²⁰ The Marcellus Shale has the largest estimated proved reserves of any U.S. natural gas field.²¹ In 2021, Pennsylvania saw an 8.9 trillion cubic feet increase in proved shale natural gas reserves, the second-largest increase after Texas.²²

In 2022, Pennsylvania's annual marketed natural gas production accounted for about one-fifth of total U.S. gas production, making it the second-largest natural gas producer in the nation, after Texas.^23,24 Pennsylvania's marketed natural gas production fell slightly to 7.5 trillion cubic feet in 2022 due to productivity declines and a plateauing of natural gas takeaway capacity. Still, the state's natural gas production was more than triple the output from a decade earlier.^25,26

Pennsylvania uses only about one-fourth of the natural gas it produces.^27,28 Several pipeline projects in recent years have enabled Marcellus natural gas producers to reach additional markets, and more pipeline projects are under construction or planned.^29,30 Most of the natural gas shipped by pipeline from Pennsylvania goes to New Jersey, Ohio, Maryland, New York, and West Virginia. The state also receives natural gas via pipeline from West Virginia and New York.³¹ Pennsylvania has 49 underground natural gas storage facilities, the most of any state, which help meet regional heating demand in the winter.³² The state's total natural gas storage capacity is the fourth-largest in the nation at about 763 billion cubic feet.³³

Pennsylvania is also experiencing growth in the production of natural gas plant liquids (NGPLs), including ethane and propane.^34,35,36 The state's natural gas processing plants produced more than 8 times as much natural gas in 2022 as in 2012.³⁷ Natural gas producers are building natural gas processing plants and pipelines to extract and transport higher-priced NGPLs to domestic and Canadian markets and to ports on the East Coast and the Gulf Coast for export.^{38,39,40,41,42} Pennsylvania's first ethane cracker, located near Pittsburgh, completed construction in August 2022 and produces feedstocks for plastics manufacturing.^43,44

In 2022, the electric power sector consumed almost three-fifths of the natural gas delivered to consumers in the state. The industrial and residential sectors each accounted for about one-sixth of the state's total natural gas use and the commercial sector consumed about one-tenth.⁴⁵ About half of Pennsylvania households use natural gas as their primary heating fuel.⁴⁶

Coal

Pennsylvania is the third-largest coal-producing state in the nation, after Wyoming and West Virginia, and coal has been mined in the state for more than 200 years. The state has substantial reserves of bituminous coal, which is used to generate electricity and to produce coke for steelmaking.^47,48 The Bailey Mine, located in southwestern Pennsylvania near the West Virginia border, is the 10th largest U.S. coal mine.⁴⁹ Northeastern Pennsylvania has all the nation's anthracite coal production, but anthracite accounts for only about 6% of the state's total coal production.^50,51 Anthracite, which has a higher heat content than other types of coal and burns with little soot, is primarily used by the metals industry.⁵² The number of coal mines and amount of coal production in Pennsylvania has declined as less electricity has been generated from coal in the state and nationwide, while renewable and natural gas-fired generation increased.^53,54,55

Pennsylvania is a major coal consumer, ranking 10th among the states in total coal use.⁵⁶ About three-fourths of the coal consumed in the state is burned for electricity generation, and the rest is used for steelmaking and other industrial applications.⁵⁷ Large volumes of coal are moved by rail, barge, and truck into and out of Pennsylvania and around the state. In 2022, about 80% of Pennsylvania-mined coal that was used domestically was burned for electricity generation. About three-tenths of that coal was used at Pennsylvania power plants and the rest was transported to generating facilities in 14 other states.⁵⁸ Pennsylvania was the second-largest coal-exporting state in 2022, after West Virginia, with nearly two-fifths of the state's coal exported to other nations.⁵⁹

Petroleum

Pennsylvania, site of the first U.S. commercial oil well in 1859, has few economically recoverable crude oil reserves today but continues to produce modest amounts of crude oil—mainly paraffin-rich crude oil used for making lubricants.^60,61,62,63 Pennsylvania was once home to nearly half the East Coast's refining capacity, with four petroleum refineries that could jointly process about 600,000 barrels of crude oil per calendar day.⁶⁴ However, an explosion and fire in June 2019 at one of the refineries—the largest refinery on the East Coast—located on the Delaware River in south Philadelphia disrupted 335,000 barrels per calendar day of refining capacity. As a result, the owner of the refinery decided to shut down the facility permanently.^65,66 One large refinery in the Philadelphia area continues to process about 190,000 barrels of crude oil per day into jet fuel, motor gasoline, diesel fuel, and heating oil.^67,68 Two other small refineries are located in northwestern Pennsylvania. One processes crude oil into motor gasoline, diesel fuel, heating oil, and several grades of asphalt, while the other refinery processes crude oil from Pennsylvania and neighboring states into motor gasoline, distillate fuel oil, waxes, and specialty products like resin blends and camping fuel.^69,70 These three petroleum refineries have the capacity to process 266,000 barrels of crude oil per calendar day, equivalent to about one-third of the East Coast's refining capacity.⁷¹ In addition to petroleum products from local refineries, Pennsylvania receives gasoline, diesel, and jet fuel via the 5,500-mile Colonial Pipeline that moves refined petroleum products from the Texas Gulf Coast to 11 southern and Mid-Atlantic states.⁷²

The transportation sector is the largest petroleum consumer in Pennsylvania, accounting for 73% of the state total, and slightly more than half of that petroleum is motor gasoline.^73,74 To reduce emissions of smog-forming pollutants, the state requires motorists to use reformulated motor gasoline blended with ethanol in the heavily populated areas of southeastern Pennsylvania, including Philadelphia. Gasoline to reduce grown-level ozone is required in the Pittsburgh metropolitan area in the southwestern corner of the state.^75,76 Pennsylvania's one ethanol production plant is the largest on the East Coast and has a capacity of about 128 million gallons per year, and additional supplies come from the Midwest.⁷⁷ The state ranks eighth in annual fuel ethanol consumption of about 459 million gallons.⁷⁸ Pennsylvania also has two biodiesel manufacturing plants that combined can produce 68 million gallons annually.⁷⁹ The state is the tenth-largest biodiesel-consuming state at nearly 49 million gallons.⁸⁰

The residential sector accounts for 9% of Pennsylvania's petroleum consumption.⁸¹ About one in five state households rely on petroleum products, mostly heating oil or propane, for home heating.⁸² The state, like much of the U.S. Northeast, is vulnerable to heating oil shortages and price spikes. In 2000, the federal government created the 1-million-barrel Northeast Home Heating Oil Reserve to offset heating fuel supply disruptions in Pennsylvania and other Northeast states.⁸³

Electricity

Pennsylvania is the third-largest producer of electricity in the nation. Only Texas and Florida generate more.⁸⁴ Electricity generation regularly exceeds Pennsylvania's power consumption, and the state sends more electricity outside its borders over the regional electric grid than any other state.⁸⁵ Pennsylvania is part of the PJM (Pennsylvania-New Jersey-Maryland) Interconnection regional transmission organization, which manages the electric grid in all or parts of 13 states and Washington, DC.^86,87 The residential sector is the largest consumer of electricity in Pennsylvania, accounting for about two-fifths of the state total. About one in four Pennsylvania households use electricity as their primary heating source.^88,89 The industrial sector is the second largest, accounting for more than one-third, followed by the commercial sector at one-fourth.⁹⁰

With a 54% share in 2022, natural gas-fired power plants were the largest provider of Pennsylvania's in-state electricity generation for the fourth consecutive year and continued to widen the gap over nuclear power.⁹¹ Pennsylvania ranks second in the nation, after Illinois, in nuclear energy generation. The state's four nuclear power plants provided 32% of the state's electricity net generation in 2022.^92,93 Shippingport, Pennsylvania was the site of the first commercial U.S. nuclear power plant, which came online in 1957, and operated for nearly 30 years.⁹⁴ Some of the state's nuclear power plants face economic challenges. The Unit 1 reactor at the Three Mile Island plant was shut down permanently in September 2019 because it was unprofitable.^95,96 The state also had the nation's most serious nuclear power accident, a partial core meltdown at the Three Mile Island Unit 2 reactor in 1979. That accident led to sweeping changes in U.S. nuclear regulation and operating standards.⁹⁷

Coal-fired power plants were the third-largest providers of in-state electricity in 2022. Many of Pennsylvania's coal-fired power plants have retired with the increased availability of competitively priced natural gas. In 2012, coal provided 39% of the state's electricity net generation and natural gas accounted for 24%. By 2022, coal declined to 10% of the state's net generation and natural gas more than doubled to 54%.^98,99 Nearly 4,700 megawatts of the state's coal-fired summer generating capacity retired between 2015 and 2022. During the same period, about 10,500 megawatts of natural gas-fired capacity came online.¹⁰⁰ Pennsylvania's largest coal-fired power plant, the 1,888-megawatt Homer City Generating Station, closed in the summer of 2023 after operating for 54 years.¹⁰¹ Renewables—mainly wind energy, hydropower, biomass, and solar energy—provide most of state's remaining net generation.¹⁰²

Renewable energy

In 2022, renewable energy sources generated nearly 4% of Pennsylvania's in-state electricity. Wind energy was the state's largest renewable source for electricity generation for the third year in a row and provided two-fifths of the state's renewable electricity in 2022.¹⁰³ The greatest wind resources for commercial power generation are found on the state's Appalachian Mountain crests—mainly in Pennsylvania's southwest but also in the northeast—and along the state's Lake Erie shoreline.¹⁰⁴ As of late 2023, the state had 27 operating wind farms with almost 1,550 megawatts of generating capacity. The state's sixth-largest wind farm, the Sandy Ridge Wind 2 project with a generating capacity of 88 megawatts, came online in September 2023.¹⁰⁵

Hydropower accounted for three-tenths of Pennsylvania's renewable generation in 2022.¹⁰⁶ The state's conventional hydroelectric facilities are, on average, about 60 years old, but some of them have been updated and expanded.¹⁰⁷ With over 83,000 miles of rivers and streams and numerous nonpowered dams, Pennsylvania has the potential to add more than 600 megawatts of hydropower generation capacity. At the end of 2022, Pennsylvania had almost 2,500 megawatts of hydroelectric generating capacity.^{108,109,110,111} About 84 megawatts of new hydropower generating capacity is expected to come online by the end of 2028.¹¹² Pennsylvania has two pumped storage hydropower plants, one with 444 megawatts of generating capacity and another with 1,072 megawatts of capacity.¹¹³ During periods of low power demand, which are usually at night, less costly electricity is used to pump water from a lower reservoir to an upper reservoir. Then, during periods when power demand and electricity prices are higher, the water is released from the upper reservoir and flows down through generating turbines on its way back to the lower reservoir, producing electricity. Although the pumped storage plant uses more power than it generates, it supplies power in periods of peak demand when electricity prices are higher.¹¹⁴

Pennsylvania ranks among the top dozen states in the amount of electricity generated from biomass resources, and biomass-fueled facilities accounted for almost one-fifth of the state's renewable generation in 2022.^115,116 Municipal solid waste and landfill gas fuel most of the state's biomass facilities.¹¹⁷ Pennsylvania's biomass resources from wood and forest byproducts also provide feedstock for the state's eight wood pellet manufacturing plants, which have a combined production capacity of about 326,000 tons per year.¹¹⁸ Wood pellets are used for generating electricity and for heating.¹¹⁹

Solar energy, including both utility-scale and small-scale solar photovoltaic (PV) installations, produced 12% of the state's total renewable electricity in 2022. Two counties, Franklin and Lancaster, account for about one-fourth of installed solar capacity in Pennsylvania.^120,121 In 2022, about three-fourths of the state's solar generation came from small-scale generating systems, such as rooftop solar panels, with generating capacities of 1 megawatt or less, and the rest was from solar generating facilities larger than 1 megawatt.¹²² The state's largest solar farm, with 100 megawatts of generating capacity, is located about 70 miles west of Pittsburgh and is scheduled to come online in late 2023. Another 600 megawatts of solar power generating capacity is scheduled to be operational in 2024 and 2025.¹²³

In 2004, Pennsylvania established an alternative energy portfolio standard (AEPS), which required alternative energy resources to generate at least 18% of the state's electricity retail sales by 2021 and every year after that, with at least 0.5% coming from solar power.¹²⁴ As of mid-2022, slightly more than 18% of the electricity sold to customers in the state was generated by alternative energy resources. Electricity suppliers met this goal by both generating renewable electricity and purchasing alternative energy credits. These goals were met in 2021, when the 15-year phased-in schedule ended. The requirement will be maintained in perpetuity or until the AEPS Act is amended.¹²⁵ Among the alternative energy sources Pennsylvania recognizes as meeting part of its AEPS requirements are byproducts of pulping and wood manufacturing, landfill methane gas, geothermal energy, low-impact hydropower, and fuel cells.¹²⁶ Pennsylvania also requires investor-owned utilities doing business in the state to undertake energy efficiency measures to reduce peak power demand and electricity consumption. These energy efficiency measures include helping customers install solar and geothermal technologies, insulate buildings, and upgrade appliances that use less energy.^127,128

Endnotes

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¹¹⁶ U.S. EIA, Electricity Data Browser, Pennsylvania, Net generation for all sectors, annual, 2001-22.
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¹¹⁸ U.S. EIA, Monthly Densified Biomass Fuel Report (September 21, 2022), Table 1, Densified biomass fuel manufacturing facilities in the United States by state, region, and capacity, August 2023.
¹¹⁹ U.S. EIA, "New EIA survey collects data on production and sales of wood pellets," Today in Energy (December 14, 2016).
¹²⁰ U.S. EIA, Electricity Data Browser, Pennsylvania, Net generation for all sectors, annual, 2001-22.
¹²¹ Pennsylvania Public Utility Commission, Alternative Energy Portfolio Standards Act of 2004: Compliance for Reporting Year 2021-22, Solar, p. 25-29.
¹²² U.S. EIA, Electricity Data Browser, Pennsylvania, Net generation for all sectors, annual, 2001-22.
¹²³ U.S. EIA, Electricity, Preliminary Monthly Electric Generator Inventory (based on Form EIA-860M as a supplement to Form EIA-860), Inventory of Planned Generators as of October 2023, Pennsylvania, Technology: Solar Photovoltaic.
¹²⁴ NC Clean Energy Technology Center, DSIRE, Alternative Energy Portfolio Standard, Pennsylvania, updated November 8, 2023.
¹²⁵ Pennsylvania Public Utility Commission, Alternative Energy Portfolio Standards Act of 2004: Compliance for Reporting Year 2022, p. 4-12.
¹²⁶ Pennsylvania Public Utility Commission, Alternative Energy Portfolio Standards Act of 2004: Compliance for Reporting Year 2022, p. 51-55.
¹²⁷ NC Clean Energy Technology Center, DSIRE, Energy Efficiency and Conservation Requirements for Utilities, Pennsylvania, updated June 12, 2015.
¹²⁸ Keystone Energy Efficiency Alliance, Act 129, Issue Context, Background, & Resources, accessed November 27, 2023.