Natural Gas Insulated PA from Recession

Natural gas drilling has helped insulate Northeastern Pennsylvania from a nationwide recession that started in 2008, though the effects have been much more pronounced in counties experiencing active gas production, according to an updated study released last week by a local economic think tank.

The study by the Institute for Public Policy and Economic Development updates a 2008 report that examined the economic impact of the Marcellus Shale in Northeastern Pennsylvania, specifically the 10th Congressional District, and other shale plays in Texas and Arkansas.

It measures that impact through changes in population, income, housing prices and unemployment.

“Data presented for the 10th Congressional District showed how a region suffering from population loss and job loss began to display economic growth and strength at (a) time when other parts of the country were in a severe recession,” the study concludes. “However, more detailed analysis of employment show an area divided by core drilling counties and non-drilling counties, which further magnifies drilling impacts.”

The institute’s director, Teri Ooms, said that “when you pick the numbers apart, it’s obvious that the counties that have the wells are the ones that are seeing the direct impact.”

In 2011, the unemployment rate was 5.9 percent in Bradford County and 7.6 percent in Susquehanna County, while in Lackawanna County and Luzerne County, which lack significant drilling, unemployment remained above 9 percent.

But Ooms said unemployment was high in those counties long before the drilling boom, and the study does not “point the finger” at the gas industry for contributing to unemployment.

Rather, areas on the border of natural gas drilling should consider strategies to capitalize on the industry’s presence.

“We need to have people think a little more strategically; a little more regionally during economic development planning,” Ooms said. “It’s not getting money from the state through the impact fee, but focusing on job generation, not just through a vendor network through the gas drilling industry but actually looking at the maximum amount of gas that could be used in other businesses that will want to relocate here because the cheap gas is here.”

Ooms said the institute is seeking funding to develop such an economic development strategy.

“We would research the types of industry that use natural gas in their processes or are heavy natural gas users in general,” Ooms said. “Target them for relocation.”

Pro-gas industry group Energy In Depth touted the report as evidence of the Marcellus Shale’s positive impact in the region.

“No one can read this report and not come away with the conclusion Marcellus Shale development is good for Northeastern Pennsylvania — all of it,” said John Krohn, spokesman for Energy In Depth. “We might also add there are other studies, of the Eagleford Share region, for example, that show how to implement the policies suggested by the Institute, which would allow places such as Scranton and Wilkes-Barre to further enhance their economies with shale.”