Fitch Ratings Says PA Court Decision Translates to Less Production

Elections–and court cases–have consequences. You tax something more, you get less of it. You regulate something more, you get less of it. When there’s less of something, prices for it go up. Fitch Ratings–one of the largest and most prestigious rating agencies in the world–has just weighed in on the ruling by the PA Supreme Court that throws out portions of the Act 13 drilling law (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). According to Fitch, more local regulation of PA’s oil and gas drilling will result in less production. You don’t normally think of Fitch as being in the oil and gas production prediction game–that’s more the purview of the Energy Information Administration (EIA). However, Fitch says the recent PA ruling will almost certainly mean less production coming out of PA–a sobering observation.

Fitch’s opinion counts because investors make decisions based on it. Less gas, higher prices. It also means less tax money will flow to municipalities. Pretty simple economics and Fitch is just stating the obvious. Here’s what Fitch said earlier this week about the PA court decision…

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