Drilling for Jobs
What the Marcellus Shale could mean or New York July - 2011
here are very few opportunities availableto New York State with the same job-creating potential as exploring and developing theMarcellus Shale formation. The safe and sustainabledevelopment of the Marcellus can help to transformthe economy in New York’s Southern Tier. Theeffects of the recent global recession are stillresonating in much of the state, and it would beunreasonable to disregard the substantial economic
benets that would come with utilizing this valuable
natural resource. We need only to look south intoPennsylvania, where 48,000 private sector jobsin Marcellus Shale-related sectors were created in2010, to see how development of this resource has
positively affected their citizens and businesses.
If New York fails to allow the development of thisresource, the state stands to lose over $11 billionin economic output and thousands of private sector jobs between 2011 and 2020.
By conservativeestimates the development of the Marcellus hasthe potential to create 37,572 new jobs each yearin New York,
jobs that may pay over $79,184annually — over double the average private sectorwage upstate.The Public Policy Institute (PPI) report builds off
the ndings of earlier studies and examines the
economic impact and potential private sector jobcreation that developing the Marcellus Shale wouldhave in New York State. It compares recent jobgrowth in Pennsylvania to counties in New York(outside of the New York City watershed) whereMarcellus Shale development is expected.This report compares how individual counties inboth states have been affected by Marcellus Shaledevelopment. It examines employment statisticsin Tioga County, New York and Bradford County,Pennsylvania — which had the most wells drilledin 2010 and also the second lowest unemploymentrate in Pennsylvania in March 2010.The availability of abundant natural gas andelectricity could spur new industrial developmentand lead to gains in employment, economic outputand tax revenues.Once Marcellus Shale development begins, thefollowing economic achievements are projected:
• In a ve-county area outside of the New York
City watershed, with 500 wells drilled per year,Marcellus Shale development could result in atotal of more than 15,500 direct jobs and anadditional 47,120 jobs by applying the 3.04RIMS II multiplier, for a total of 62,620 jobs.
Even with a moratorium in place, New Yorklandowners are seeing income from leasing thedrilling rights to their land. Once developmentbegins, many will see royalties from producingwells. In Pennsylvania some landowners haveseen signing bonuses as high as $2,000 peracre and a royalty rate of 12.5 percent.
Local, state and federal tax revenues couldincrease by more than $214 million (in 2010dollars) in 2015.
Anti-drilling apprehension has delayed shalegas exploration in New York State, despiterecent advances in wastewater technology
andsupport from diverse sources, including the U.S.Environmental Protection Agency.
AlthoughPPI’s report focuses solely on non-environmentalmatters, it’s important to note that natural gas isa clean burning fossil fuel which emits 60 percentless carbon than coal.
Additionally, New York hassome of the most strict environmental standardsin the nation — typically exceeding other states’ and federal standards — and the implementationof a new regulatory regime governing high-volumehydraulic fracturing will continue this trend.
After analyzing the economic impact and
private sector job creation associated with thedevelopment of the Marcellus Shale, PPI concludesthat New York must move swiftly to take advantageof the transformative opportunity that has beendocumented below the state line in Pennsylvania.New York has a great opportunity to continue itslong history of exploration and development of natural gas resources and pursue an extraordinaryeconomic opportunity for upstate regions.