Economic Impacts in Pennsylvania

The economic effects of fracking within Pennsylvania have been overwhelmingly positive. A recent working paper authored by Tim Considine, a professor of Economics at the University of Wyoming, highlights the economic growth fracking has created in Pennsylvania. According to Dr. Considine’s econometric analysis, “$1 million…in shale industry spending generates 16 jobs, $1.75 million value added and $3 million in personal income after 18 months.”12 Much of this economic growth primarily benefits landowners in rural areas. Employment opportunities in those areas are often more limited than in urban areas, and fracking has provided a welcome opportunity for individuals in those areas. The Marcellus Shale Coalition published a report stating that Pennsylvania landowners received more than $1.6 billion in lease and bonus payments from drilling companies in 2010, around the peak of the boom.13

Pennsylvania’s natural gas production totals have skyrocketed, growing from almost 200 billion cubic feet (Bcf) in 2008 to 5,313 Bcf in 2016.14 This growth in production has helped fuel Pennsylvania’s own natural gas economy. Pennsylvania was the 5th largest consumer of natural gas in 2016.15 The state’s increasing production of natural gas has also created a significant opportunity for natural gas exports, including exporting to neighboring New York. The growth has also spurred investments like a $6 billion ethane

cracker plant which Shell Chemical recently began construction on in Potter Township, Pennsylvania.16 There will also be an expected $20 billion investment in new gas plants in coming years.17

This growth in natural gas production has not only benefited residents of Pennsylvania, but has helped to make the United States the leading producer of natural gas in the world.18 It has boosted economies in rural areas of Pennsylvania, decreased unemployment, and spurred investment across the state. Through the use of impact fees, policymakers have mitigated the negative effects of the fracking boom while still allowing individuals, communities, and cities to grow and benefit from the economic stimulus.

Fracking in New York

Despite its proximity to Pennsylvania and its location atop the Marcellus shale plays, New York legislators have chosen to take an entirely different approach to regulating fracking within the state. Landowners in New York, like their neighbors in Pennsylvania, were caught up in the initial fracking rush in the area. Initial lease payments to New York landowners by gas companies totaled $110 million in 2008.19 The promise of economic prosperity convinced many to allow drilling on their lands.

Then, midway through 2008, legislators issued a fracking moratorium, essentially halting the practice until a thorough environmental impact assessment could be conducted.20 It took New York’s Department of Environmental Conservation (DEC) 7 years to conduct the assessment. In 2015, the DEC released the 1,448 page report, condemning the practice of hydraulic fracturing.21 This led to an eventual outright ban on hydraulic fracturing in New York that same year.22The ban is not permanent, and could be repealed at some point, but as for now fracking has been outlawed in the state of New York.