New Penn State Study Says Hydraulic Fracturing Economic Boom for Pennsylvania
Calls Proposed Federal Anti-Frac Legislation an “Ominous Proposal”
July 29, 2009
Posted by: David Lungren David_Lungren@epw.senate.gov
In the same week that Senator Inhofe went to the Senate floor to discuss the important role hydraulic fracturing plays in lessening dependence on foreign oil, a new study was released by Penn State University, highlighting employment gains in the Marcellus Shale region of Pennsylvania. The study examines the safe and steady deployment of hydraulic fracturing technology, the technology’s contribution to an economic boom, and describes efforts in Congress to impose new federal regulations as an “ominous proposal.” The Marcellus Shale area is expected to employ 100,000 more people at salaries $20,000 above the average annual salary in Pennsylvania.
The study notes:
“The Marcellus gas industry in Pennsylvania generated $2.3 billion in total value added, more than 29,000 jobs, and $240 million in state and local taxes during 2008. With a substantially higher pace of development during 2009, economic output will top $3.8 billion, state and local tax revenues will be more than $400 million, and total job creation will exceed 48,000.” (Pg 3)
The study also takes aim at anti-fracturing legislation in Congress:
“There is little question that this type of legislation would accomplish little in terms of protecting potable freshwater but would be disastrous in terms of the domestic oil and gas industry, raise prices for gasoline and natural gas, and ultimately derail any efforts to address the need to reduce carbon emissions.” (Pg 38)
Current efforts in Congress to target hydraulic fracturing come from legislation introduced by Rep. Diana DeGette, D-Colo., and Rep. Maurice Hinchey, D-N.Y., and in the Senate, by Sen. Bob Casey, D-Pa., and Sen. Charles Schumer, D-N.Y. Yet, as we mentioned in a blog post yesterday, a number of Republicans and Democrats from across the country have noted their support for hydraulic fracturing.
Further Highlights from the study:
-“Natural gas production from shale deposits began during the 1980s with the development of the Barnett Shale play in the Fort Worth, Texas region. During 2008 this field alone produced 3.8 BCF per day. Just five years prior in 2003, it produced 0.8 BCF per day. This success sparked the development of several other shale plays, including Antrim in Michigan, Fayetteville in Arkansas, Haynesville in Louisiana, New Albany in Indiana, and the Woodford in Oklahoma among others. There are also significant shale deposits in British Columbia. The Marcellus in the Appalachian region, however, is by far and away the largest and potentially the biggest prize. Even though the shale deposit in the Marcellus formation is about half as thick as the Barnett, the areal extent of the Marcellus is significantly larger (see Figure 1). The isobars in the following diagram indicate the thickest gas bearing layers within the shale.” (Pg. 10)
-“While many citizens may view natural gas as yet another extractive industry that employs only roughnecks and drillers, the construction of supporting infrastructure is a very significant undertaking that requires thousands of suppliers of steel, machines, and equipment. These suppliers would have to ramp-up to meet this new demand by hiring thousands of workers, often in relatively high paying manufacturing and construction jobs. Pennsylvania experienced such an industrial boom during the last half of the 19th century, leaving behind vast wealth that underpins great institutions, such as Carnegie Mellon University, which generate benefits for citizens today. Having a sizeable, home grown natural gas industry will once again allow Pennsylvania to revive its economy, create new jobs, and generate income and wealth for future generations. The Marcellus Shale also has significant strategic implications as the U.S. economy seeks domestic energy resources and attempts to reduce greenhouse gas emissions in the future.” (Pg 11)
- "This level of future drilling and development activity will significantly stimulate the Pennsylvania economy. Estimates of these future economic impacts are summarized in Table 7. During 2009, the ramp-up in industry activity will generate more than 48 thousand jobs and more than $395 million in state and local taxes. In 2010 the total number of jobs created by the Marcellus industry could exceed 100,000. Valued added would exceed $8 billion in 2010. In 2015, gross output generated from the Marcellus industry could exceed $12 billion with employment of over 160,000 and over $1.3 billion in additional state and local taxes. In 2020, state and local taxes could exceed $1.4 billion and employment could exceed 174,000. In summary, if regulatory and tax policies remain supportive, the Marcellus gas industry could become a major employer and significant generator of tax revenue for the Commonwealth of Pennsylvania.” (Pg 30)
-“An even more ominous proposal to the development of the Marcellus Shale and for that matter the domestic oil and gas industry is the proposal that hydraulic fracturing be regulated under the federal Safe Drinking Water Act. A study by HIS Global Insight, found that this policy would reduce gas production by 4.4 TCF, or 22 percent, and reduce oil production by 400,000-b/d, or 8 percent, by 2014. There is little question that this type of legislation would accomplish little in terms of protecting potable freshwater but would be disastrous in terms of the domestic oil and gas industry, raise prices for gasoline and natural gas, and ultimately derail any efforts to address the need to reduce carbon emissions.” (Pg 33)
Related Links:Oklahoman Editorial: Power play: Fracturing Plan Wrong, Indefensible