The first oil boom in the U.S. wasn’t in Texas or Oklahoma. It was in Pennsylvania. That’s where Samuel Kier, drilling into the ground for salt in the 1840s, kept discovering oil instead. Kier found that the black liquid ruined his salt and sometimes caught fire.
Experimenting with the liquid, Kier produced a kerosene that replaced whale oil as a fuel for lamps. By 1853, Kier became the world’s first oil baron, making $40,000 a year from his new refinery, a fortune at that time. Oil boomed in the Keystone State. Pennsylvania’s oil industry collapsed, however, when the electric light bulb replaced kerosene lamps. With the rise of the automobile, oil production had shifted to Texas and other Southern states.
Today, aided in part by modern horizontal drilling and hydraulic fracking, the state has reemerged as an energy-production heavyweight. Oil, however, has taken a backseat to natural gas.
Although Pennsylvania ranks 17th in the U.S. for crude-oil production, it ranks No. 2 for natural-gas production and No. 3 for coal production, according to the U.S. Energy Information Administration. Pennsylvania also ranks second for total energy production and fourth for electricity production. From 2016 to 2018, 16 new gas plants valued at nearly $14 billion were built in Pennsylvania and 8,700 jobs were created during construction.
Although resource extraction has a long history in the Keystone State, it also has a heavy price. One town, Centralia, which is mostly abandoned after an underground coal mine caught fire more than 50 years ago, continues to burn today and is expected to remain on fire for centuries. With the recent rise of natural-gas extraction, some in the state worry about the environmental costs of fracking —the use of pressurized water to extract oil and gas.
Pennsylvania is one of four states that are considered commonwealths. The two largest cities in the state, Philadelphia and Pittsburgh, are home to several major hospitals, colleges, financial institutions and Fortune 500 corporations.
The Keystone State has 2,300 food-processing plants producing everything from canned fruit and vegetables to potato chips. The state produces $5 billion worth of snack foods alone, including Hershey’s chocolate bars. Chester County in Pennsylvania accounts for nearly half of all the mushrooms produced in the U.S.
The Keystone State — so nicknamed because Pennsylvania was in the middle of the original 13 colonies and the keystone is the middle stone in an arch — ranks 15th in the U.S. with a per-capita personal income of $55,349. That’s 103% of the national average of $53,712. Pennsylvania also ranks fifth in the nation with a population of 12.8 million. About 12.5% of the population lives in poverty, slightly higher than the nation as a whole, according to the U.S. Census Bureau. n
Home sales and prices
Pennsylvania’s home prices have been on an upward trend over the past seven years, but median prices for the commonwealth still lag behind the nation as a whole. Last year, the median home price was $161,500, according to Zillow. That’s up from $140,100 in 2012, or an increase of 15%. The U.S. median home value as of this past June was $227,700, Zillow reported.
The number of home sales have been climbing for the past seven years, too. Last year, 192,926 homes were sold. That’s up 61% from 2012 when 119,506 homes were sold in the state. A survey last year of Pennsylvania real estate agents found that 57% were optimistic about the housing industry. Their top concern was a lack of inventory, followed by worries about recruiting and competition from online companies.
Pennsylvania’s unemployment rate reached 3.8% this past April, a record low for the state dating back to 1976, according to its department of labor and industry. The unemployment rate remained at 3.8% this past May, according to the U.S. Bureau of Labor Statistics. That was slightly higher than the national rate of 3.6% for May.
A report this past June from the United Way of Pennsylvania found that 1.8 million households in the commonwealth — or 37% of the households in the state — lack the income to cover basic necessities such as housing, food, transportation and child care. A push by Democratic Gov. Tom Wolf to raise the state’s minimum wage to $12 per hour, significantly higher than the federal minimum wage of $7.25 per hour, hasn’t gained any traction.
Delinquencies and foreclosures
Pennsylvania saw its number of foreclosure filings — as measured by defaults, auctions and real estate-owned properties — drop by nearly 20,000 from 2016 to 2018, according to Attom Data Solutions. The state had 54,023 of these filings in 2016 as the state dealt with a backlog of cases from the recession. That number fell to 34,260 last year, the real estate data company reported.
As of this past April, Pennsylvania shared the 10th-highest rate in the nation for mortgages that were at least 30 days past due, with a rate of 4.6%, according to CoreLogic. That’s a percentage point higher than the national rate of 3.6%. The foreclosure rate for the Keystone State was 0.6% this past April, while the national rate was 0.4%, CoreLogic reported.
What the locals say
“With median sales prices (in the Philadelphia market) going up 14% — from $214,900 up to $245,000 this year — you can see there’s a decent increase. Inventory is still a problem not just in Philadelphia, but across the whole region. You’re down about 9% from a year ago with active inventory. [The number of] days on the market has gone up, though, which kind of shows you that you’re getting a little bit of a buyer’s market here. … Within the last two years, a house would go up and two days later it’s gone. It’s a bidding war and people are paying over market [price]. This year, it seems to have gotten a little bit better.”
Senior vice president of capital markets, Firstrust Bank
3 Cities to Watch
This city in northeastern Pennsylvania was originally named Unionville, then in turn, Slocum Hollow, Harrison and Scrantonia before finally taking its current name in 1851. The city was heavily invested in the iron industry and later the coal industry, attracting wave after wave of immigrants. By the 1950s, the coal industry fell apart and the city developed the “Scranton Plan” for industrial expansion. Today, Scranton, with a population of 77,000, features a mix of manufacturers that produce electronic equipment and metal products.
The Steel City grew from a small village surrounding Fort Pitt, a French and Indian War-era stronghold at the confluence of the Allegheny and Monongahela rivers. Pittsburgh earned its nickname from the hundreds of steel plants that once called the area home. Although manufacturing remains important in Pittsburgh — the steel industry still employs thousands in the area — its major employers are a mix of hospitals, banks and colleges, as well as food manufacturer Kraft Heinz Co. and aluminum producer Alcoa, which is headquartered in the city. Today, Pittsburgh is the largest city in western Pennsylvania with a metropolitan-area population of 2.3 million.Philadelphia
Few cities in the U.S. can boast the history of the City of Brotherly Love. It is home to the Liberty Bell and Independence Hall, and the steps at the Philadelphia Museum of Art were made famous in the movie “Rocky.” Philadelphia has an abundance of iconic American imagery, and the metro area in eastern Pennsylvania has a population of just more than 6 million, making it the seventh-largest metro area in the U.S. The area also is one of the economic engines for the commonwealth as 12 Fortune 500 companies are located there, including pharmaceutical company AmerisourceBergen, cable giant Comcast and food-services company Aramark.
Sources: Attom Data Solutions, Britannica, Chicago Tribune, CoreLogic, Energy In Depth, Environmental Health News, Forbes, Fort Pitt Block House, HuffPost, KDKA-TV, Medill News Service, Modern Farmer, National Park Service, PennLive.com, Pennsylvania Association of Realtors, Philadelphia magazine, State Symbols USA, The New York Times, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, U.S. Census Bureau, Visit Pittsburgh, World Population Review, WTAE-TV, Zillow