Penn State Report Shows PA Counties with Drilling Prosper

Penn State ReportAn economic report released on March 30 by Penn State researchers (copy embedded below) shows that Pennsylvania counties where there is Marcellus Shale drilling do better economically—far better—than other counties.

Marcellus counties bring in more sales tax revenue, a sign that businesses and business owners and the people who have jobs at those businesses are prospering. The more drilling there is in a county, the better the county does economically. And that’s even before Act 13 Marcellus drilling impact fees are collected and distributed.

One of the report’s authors, professor Timothy Kelsey, says the long-term economic effects of Marcellus drilling are still not known. But short term? The evidence is irrefutable:

"Because it’s still early in the development of Marcellus Shale, there’s a lot we can’t know yet about its long-term economic impact," said Timothy Kelsey, professor of agricultural economics. "However, state tax collection information gathered by the Pennsylvania Department of Revenue can provide insight into the short-run economic and tax implications of gas development."

The report — which updates a similar analysis done last year using 2010 data — looks at county-level state tax collections from 2007 to 2011 and analyzes that information in the context of local natural-gas activity. "The data continue to show distinct differences between counties with Marcellus Shale gas drilling and those without," Kelsey said.

"For example, sales tax collections in counties with 150 or more Marcellus wells drilled between 2007 and 2011 rose an average of nearly 24 percent during those years, compared to an average decrease of about 5 percent in counties with no Marcellus activity," Kelsey said. "Sales tax collections dropped in only three of the 23 counties with more than 10 Marcellus wells, compared to decreases in 22 of the 32 counties with no Marcellus Shale drilling."

The increases were particularly dramatic in Bradford County (50.8 percent), Greene County (31.4 percent) and Susquehanna County (27.4 percent), three of the top six counties in the number of Marcellus gas wells. "The data support anecdotes we hear about Marcellus development increasing local retail activity," he said.*

*Penn State Live (May 8, 2012) – Local collection of state taxes rises in Marcellus Shale counties