WSJ Article Compares PA and NY Approaches to Marcellus Drilling

The Wall Street Journal ran an excellent article in yesterday’s edition comparing Pennsylvania’s approach to drilling in the Marcellus Shale with New York’s approach. It’s a tale of two states: One state embraces economic opportunity, and the other let’s environmental politics strangle development.

The article says this about Pennsylvania:

More than 2,000 wells have been drilled in the Keystone State since 2008, and gas production surged to 81 billion cubic feet in 2009 from five billion in 2007. A new Manhattan Institute report by University of Wyoming professor Timothy Considine estimates that a typical Marcellus well generates some $2.8 million in direct economic benefits from natural gas company purchases; $1.2 million in indirect benefits from companies engaged along the supply chain; another $1.5 million from workers spending their wages, or landowners spending their royalty payments; plus $2 million in federal, state and local taxes. Oh, and 62 jobs.*

And then there’s New York:

The state holds as much as 20% of the estimated Marcellus shale reserves, but green activists have raised fears about the drilling technique known as hydraulic fracturing and convinced politicians to enact what is effectively a moratorium.

The Manhattan Institute study shows that a quick end to the moratorium would generate more than $11.4 billion in economic output from 2011 to 2020, 15,000 to 18,000 new jobs, and $1.4 billion in new state and local tax revenue. These are conservative estimates based on a limited area of drilling. If drilling were allowed in the New York City watershed—which Governor Andrew Cuomo is so far rejecting—as well as in the state’s Utica shale formation, the economic gains would be five times larger.*

The sobering conclusion:

Governor Cuomo has said he wants to lift New York’s moratorium, and the state’s recently released draft rules are a step forward. But they must still undergo legal review and a public comment period that could bar New York drilling for the rest of this year, if not longer. New York will also still ban drilling in about 15% of the state’s portion of the Marcellus and impose more onerous rules than other states on private property drilling. Such bows toward the obsessions of rich, big-city greens explain why parts of upstate New York are the new Appalachia.

As they look across their northern border, Pennsylvanians can be forgiven for thinking of New Yorkers the way Abba Eban once described the Palestinians: They never miss an opportunity to miss an opportunity.*

Read the entire article!

*Wall Street Journal (Jul 26, 2011) – A Tale of Two Shale States

  • Julieann Wozniak

    Economic opportunity? Where? For whom? Certainly not in Greene County, still the third-world dumping ground of Pennsylvania. Go to any drill site and all the license plates are from out of states. We get nothing!

  • Anonymous

    Ms. Wozniak — your views are so consistently bitter, sometimes I think you’re just putting us on. I know New Yorkers who have worked in your PA county — as refugees from the shale gas moratorium up here. I say let ’em work!

  • Sam Burke

    How is NY “missing this opportunity”? Is the gas going anywhere? I’m all for responsible drilling, but why is taking the time to assess what “responsible” is, a bad thing?

  • Jim Willis

    Good question. Here’s the answer: Every day drilling doesn’t happen due to delays that are unreasonable (which they are at this point), means that wells keep getting drilled somewhere else. Which means regional offices get set up there, never to come to NY (lost jobs). And it means infrastructure like pipelines is available there and not here, meaning it’s more attractive to keep drilling there than here because here you’ll have to wait years for pipelines to be installed to get the gas to market. Etc. Frankly, NY has already missed the boat imho. We’ve lost hundreds of millions, perhaps billions, that will never flow to our economy because of these extended delays. This does not need to be studied any more. It’s been studied to death. The time to drill is now.

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