Natural Gas Drives Economic Gains in Pennsylvania While New York Sits on the Sideline
(PRWEB) July 26, 2013 -- Whether a state has a pro-growth policy environment can have a major impact on the scale and pace of oil and gas development within its borders. As we've seen, the contrast between outcomes in different states can be very stark.
In a recent post, this blog examined the energy outlook for Texas and California, two states that both have substantial reserves but are on very different paths as a result of their respective legal and regulatory situations.
The Lone Star State has led the other 49 in job creation since the end of the recession and increased its energy production substantially. Meanwhile, the Sunshine State's production has declined and its unemployment rate has remained stubbornly high.
A widening gulf between development and stagnation can also be seen on the border between Pennsylvania and New York. Both states have access to parts of the gas-rich Marcellus shale formation. But while Pennsylvanians have been able to capitalize on the economic boom driven by development of this vast energy resource, New Yorkers have largely been barred from participating in the bonanza as a result of a moratorium on hydraulic fracturing put in place by the state government.
Advantages for local communities can be substantial
Previously, we looked at a report from NPR that examined the increase in consumer spending—measured by sales tax revenues—in a number of Texas counties where drilling operations had expanded as result of development in the Eagle Ford region.
Pennsylvania State University recently conducted a comparable study focused on five counties involved in gas production from the Marcellus. The report looked at Bradford, Sullivan, Susquehanna, Tioga and Wyoming counties.
The Penn State researchers wrote that much of the economic boost provided to a community by an increase in drilling activity can be seen in the form of increased spending on goods and services provided by "secondary businesses such as local construction, trucking, hotels, food service and other non-specialized services not unique to the industry."
While residents of these Pennsylvania counties have seen a shot of life injected into their economies by the influx of salaries and capital spending, New Yorkers have been forced to grind on without receiving any tangible benefit from the gas reserves trapped under their feet.
In a 2011 report, analysts at the Manhattan Institute suggested that New York would experience a surge of economic growth if the moratorium on fracking was lifted. Total gains could include tens of thousands of jobs, billions in economic output and a substantial increase in tax revenues at the municipal and state levels.
Research underscores opportunity for safe, clean development
Earlier this year, the New York Times published an overview of a report that was prepared—but never released—by the state Department of Health. According to the Times, the eight-page analysis discusses previous research on the subject and "concludes that fracking can be done safely."
The administration of Democratic Governor Mario Cuomo essentially declined to take ownership of the study's findings, with a spokesperson telling the Times that it was an outdated summary of the state's research and had been superseded by newer assessments.
Karen Moreau, executive director of the New York State Petroleum Council, told reporters that the Health Department's research confirms "what has been clear for some time now: Sensible regulations can ensure safe natural gas development will protect land, water and public health while providing tens of thousands of good jobs throughout the Marcellus Shale."
Innovators like Chem Rock Technologies are working to turn the promise of safe natural gas development into a reality by developing new, environmentally friendly fracturing chemicals. These modern solutions help ensure the safety of local communities and wildlife while enabling well operators to improve production performance by reducing friction downhole and resolving issues related to adverse geological conditions.
Ben Davis, EnerSciences, http://www.enersciences.com, 512-505-4101, [email protected]
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