Investor’s Business Daily editorial: Grow Our Way Out

Energy Policy: A new study documents a mini-boom caused by the development of the Marcellus Shale formations in Pennsylvania, creating jobs and revenue. Maybe the second rule of holes is that when you’re in one, start drilling.

While Washington unravels over hitting the debt ceiling, fretting over a stagnant economy, a shortage of revenues and an abundance of spending, a quiet economic boom is occurring in Pennsylvania that shows much of our economic wounds are self-inflicted.

That developing domestic energy could go a long way toward generating the revenues, jobs and energy we desperately need is shown by the third and final study by researchers at Penn State on the development of the Marcellus Shale and its economic impact on Pennsylvania and the U.S.

“Large-scale development of the Marcellus is reshaping the economic landscape of Pennsylvania,” concluded authors Timothy J. Considine, Robert Watson and Seth Blumsack. They note that in 2010 alone, the Marcellus Shale natural gas industry triggered $11.2 billion in economic activity, generated $1.1 billion in state and local taxes, and supported nearly 140,000 jobs.

Don’t expect the Obama administration to tout the Marcellus experience as an example of American ingenuity and innovation. If it had its way, the Marcellus would be paved over with solar panels and the hillsides dotted with wind turbines, hoping for the sun to shine and the wind to blow.

President Obama once said that energy prices would “necessarily skyrocket” as we were weaned off fossil fuels and forced to use so-called green energy. According to the Penn State study, development of the Marcellus has lowered residential natural gas and electricity bills in the Commonwealth by $245.1 million. Thanks to the 12.6% reduction in natural gas prices due to rising Marcellus output, total energy costs for all Pennsylvania consumers declined by $633 billion in 2010.

The study projects that by 2020, Marcellus development could support 245,000 jobs and generate $20 billion in added value to the Pennsylvania economy.

The success of Marcellus is staggering but not unique. Drilling in the Bakken formation along the North Dakota-Montana border helps explain North Dakota’s unemployment rate of 3.2%, the nation’s lowest.

In one of the few areas where we’re allowed to develop domestic energy, Pennsylvania contains a major portion of the Marcellus Shale Formation that covers 34 million acres in New York, Pennsylvania, Maryland, West Virginia and Kentucky. SUNY-Fredonia geologist Gary Lash and colleague Terry Engelder of Penn State estimate that Marcellus holds 1,300 trillion cubic feet of natural gas.

Extrapolate this success nationwide and what it would mean to the economy if restrictions imposed by the Obama administration on drilling offshore and in Alaska were lifted and if a truce was called in the EPA’s war on fossil fuels and CO2.

A recent study done by SAC Corp. at the request of the National Association of Regulatory Utility Commissioners, the Gas Technology Institute and others shows that the U.S. economy will suffer $2.3 trillion in lost opportunity costs over the next two decades, monies that would go a long way toward reining in runaway deficits and creating economic growth.

Out west we may have what could be called a “Persia on the Plains.” A Rand Corp. study says the Green River Formation, which covers parts of Colorado, Utah and Wyoming, has the largest known oil shale deposits in the world, holding from 1.5 trillion to 1.8 trillion barrels of crude. But most of it is locked up by federal edict.

Earth to Washington: While you’re figuring ways to stem the tide of red ink you might consider tapping into the black gold and other riches right under your feet.

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