Safe Shale Development Generating Billions in Royalties for Farmers

Pittsburgh, Pa. – As more abundant supplies of clean-burning natural gas continue to be safely produced from the Marcellus Shale, American consumers – who rank energy costs as their top concern economic concern, according to a national Gallup poll released last week – are realizing enormous savings. And as Bloomberg News has reported, “U.S. households might see total savings from lower [natural] gas prices of as much as $113 billion a year through 2015, including tack-on effects such as lower product prices and higher wages generated by cheaper fuel, according to energy industry consultants IHS Inc.”

At the same time, as the Associated Press reports over the weekend under the headline “Billions in gas drilling royalties transform lives,” the safe, tightly-regulated development of American natural gas is providing a major economic boost for landowners and family farmers across the region.

These savings and royalties are having an important, and positive, impact on family budgets, especially in regions where natural gas production takes place, particularly in Pennsylvania. It’s also equally clear that shale gas-producing regions overwhelmingly support this responsible, job-creating development. A recent Huntington Bank survey determines that “In Western Pennsylvania, 79 percent of respondents said the new [natural gas] industry would bring opportunity to the area.” Steve Steinour, chairman, president and CEO of Huntington Bank, said this of the region’s growing shale gas industry: “We prefer to call this swath of the country the Recovery Belt.”

We absolutely agree. And here’s what they’re saying.

  • Welcome to Pennsylvania, “The Saudi Arabia of Natural Gas”: Perhaps the nation’s best example fast fracking expansion comes from Pennsylvania. In 2011 alone, natural gas production more than doubled in the Keystone State to make up more than 1 trillion cubic feet due to production from the fracking of Marcellus shale…according to EIA. Pennsylvania…has recently been dubbed the Saudi Arabia of natural gas. … Pennsylvania’s Act 13 of 2012 mandates tougher environmental standards, establishes no-drill zones, and enhances protection of water supplies according to the Pennsylvania DEP. (Michigan Chronicle, 1/21/13)
  • Shale Gas: “An Economic Godsend” for Customers: [Natural gas-powered electricity] savings on a regional level are enormous. The six New England states paid a total of $5.2 billion for electricity last year, down from $6.7 billion in 2011 and $12.1 billion in 2008, according to power grid operator ISO New England. The downturn in wholesale prices is also translating into lower electricity bills for residential and business customers across the region. In Boston, the power-supply portion of a typical NStar residential customer’s bill is now $33.50, the lowest it’s been since 2004. … The typical customer’s bill was $79.91 last May, down 2.8 percent from 2010 and 13 percent since 2007. (Commonwealth Magazine, 1/24/13)
  • West Virginians Optimistic About Safe Marcellus Shale: West Virginians are optimistic about the potential impact the natural gas-rich Marcellus and Utica shales will have on their economy, according to a poll conducted for Huntington Banks. Seventy five percent of West Virginia respondents believe that development of shale gas will provide economic opportunity to their area, according to the survey. … Overall in the shale exploration areas from West Virginia through Michigan that Huntington Banks serves, almost 60 percent of respondents believe the shale gas industry will provide economic opportunity in their areas. (Charleston Daily Mail, 1/24/13)
  • Natural Gas Positively Impacts “All Industries And Manufacturers”: Over the last five years, northern Pennsylvanians have enjoyed a robust economic recovery, complete with high-paying jobs in manufacturing, and the support of businesses such as mom and pop restaurants and shops throughout the area. The International Energy Agency has called the United States “the Saudi Arabia of natural gas,” meaning that our nation has an unmatched amount of clean natural gas reserves. These reserves are helping our country become more energy independent, reinventing American manufacturing and creating jobs through exploration, discovery and development. … Natural gas production does not simply affect natural gas companies, but all industries and manufacturers. For example, global steel output has grown by 14 percent since 2008, thanks in large part to the natural gas industry. Meanwhile, American carbon dioxide emissions have decreased by 20 percent thanks to…natural gas. (Washington Times op-ed, 1/23/13)
  • Natural Gas Development Credited for Industrial Expansions: The Chamber credits the expansion of the oil and gas industry for more companies seeking information and then following up on their inquiries before potentially moving to the Youngstown area. … “There’s a variety of manufacturing. We’ve had inquiries with clothing manufacturing in addition to automotive, some plastics or parts manufacturing. Forty five percent of that list is estimated as oil and gas,” said Sarah Boyarko, Vice President of Economic Development, Business Retention and Expansion with the Youngstown-Warren Regional Chamber. In 2011, the Chamber says [the oil and natural gas industries] helped bring businesses to the region and assisted with retaining businesses, which in turn, created more than 1,300 jobs. (WFMJ-TV, 1/22/13)
  • ACC Chief Economist: “Shale Gas Offers a New Era of U.S. Competitiveness”: After decades of high and volatile natural gas prices that “destroyed industrial demand,” shale gas offers a new era of U.S. competitiveness that will lead to greater investment and employment, says the American Chemistry Council. Dr. Thomas Kevin Swift, chief economist and managing director of the ACC, says the council’s members are working on more than 60 projects with a value of US$43-billion in capital investment. “It is a game changer,” he said. (Financial Post, 01/25/13)
  • Top U.S. State Dept. Official: American “Energy Revolution” Key to Economic Recovery: Growth in the U.S. economy will be aided by the domestic “energy revolution,” Under Secretary of State Robert Hormats told CNBC. In an interview from the World Economic Forum in Davos, Switzerland, Hormats said … that growth is beginning to accelerate in the U.S. economy. “The energy revolution in the U.S. will be helpful and corporate balance sheets are in good shape.” (CNBC, 1/23/13)
  • New IHS Report: American Manufacturing Buoyed by Shale Gas: The unconventional oil and gas revolution has dramatically changed the global energy landscape, and in its wake is altering the world’s competitive manufacturing and industrial panorama, according to a new report from IHS, a leading source of global information and analytics. … A new study by IHS estimated that in the United States alone, the surge in unconventional oil and gas extraction has led to the creation of 1.7 million jobs and added $62 billion to federal and state coffers in 2012. The big drop in energy prices has also led to a surge in investment in the United States, posing a risk for Europe and Asia which face migration of manufacturing to North America and the loss of competitiveness, says Behravesh. … “The North American unconventional oil and gas revolution is having profound effects on the global chemistry industry,” with petrochemical investment in North American “being reignited,” writes IHS Chemical Chief Advisor Gary Adams in the report. (Release, 1/21/13)
  • Pennsylvania American Water Converts Fleet to Compressed Natural Gas: Pennsylvania American Water has became the latest company to give compressed-natural-gas vehicles a whirl. The water company on Friday unveiled four Ford F-250 bi-fuel trucks that can run on CNG or gasoline and will operate out of the company’s Coatesville and Punxsutawney depots. The vehicles will be fueled at existing commercial CNG stations. The utility, which is applying for state grants promoting vehicles that use cleaner-burning natural gas, plans to build its own fueling facility in Scranton in 2014 that would support up to 36 vehicles. (Philadelphia Inquirer, 1/25/13)
  • Marcellus-Related Consumer Savings Broadly Realized: More than 18,000 customers have switched to natural gas in the last two years, as consumers scramble to take advantage of historically low prices. Sen. Gene Yaw, chairman of the Senate Energy Committee, said he expects to unveil legislation that will encourage gas utilities to expand service so more Pennsylvanians can switch to natural gas as a fuel source. The expansion of drilling in the Marcellus Shale region has driven down the price of natural gas…“In the past five years, the price of natural gas has dropped 67 percent,” … Yaw and Senate Majority Leader Dominic Pileggi said their Natural Gas Expansion and Development Initiative would include encouraging governments to switch to natural gas to heat municipal buildings; offer incentives to school districts, colleges and hospitals to switch to natural gas and create funding alternatives to help extend natural gas into underserved areas. In 2011, UGI had a record year when 7,300 customers converted to gas from other fuels. … Last year, the record was shattered as 11,000 customers converted to gas. (Sharon Herald, 1/25/13)

# # #