Shale: Unifying the Commonwealth and America

This week, the Marcellus Shale Coalition (MSC) released a new year-in-review video – titled Shale: Unifying America – highlighting the “game-changing benefits tied to safe, job-creating shale development for our communities, the entire Commonwealth and our nation.”

These clear benefits were echoed by MSC president Dave Spigelmyer during an appearance on PCN’s On the Issues segment this week, as well as in a new American Action Forum study that found major energy producing states – including Pennsylvania – have “fared better” during America’s economic recovery from the Great Recession.

Here’s what they’re saying:

GOOD-PAYING, LOCAL JOBS

  • Shale Bringing About “a Renaissance of Manufacturing: Today, three of the five companies in Alta Vista work in the industry.  “We’re trying to keep it a mixed-use business park, but we have to recognize the oil and gas industry is the biggest game in town right now,” said Pawlick, executive director of the Middle Monongahela Industrial Development Association. “They are the ones driving demand.” Ten years ago, Fort Worth-based Range Resources Corp. drilled the first Marcellus shale well in Washington County. Now the county — which dubs itself “Energy Capital of the East” — is home to about 1,000 wells, the most in Pennsylvania. In that time, county property tax revenue increased more than 50 percent, to about $40 million annually. In the past three years, about 220 development projects added nearly $1.7 billion in capital investment for an energy-fueled economy that once relied on farming, coal and steel. … Such projects are more evident in the northern part of the county, near Pittsburgh, where there is rampant development of neighborhoods, shopping centers and office spaces in places such as Peters, Cecil and Canonsburg. … Since enacting a shale impact fee three years ago, Pennsylvania has collected about $630 million. Of that, $15.2 million went to Washington County — more than any other Western Pennsylvania county. Another $1.9 million went directly to 15 communities in Washington County’s part of the Mon Valley, which spans four counties from outside Pittsburgh south to the West Virginia border. … “There is opportunity,” [president of the Mon Valley Regional Chamber of Commerce] said. “Whoever wants to work can work in this valley, in this region. I maybe couldn’t have said that 10 years ago.” (Tribune-Review, 10/19/14)
  • Natural Gas “Has Been a Godsend” for Local Unions: Prior to the Marcellus shale boom and federal cuts in transportation spending, International Union of Operating Engineers Local 66 had a roughly 10 percent unemployment rate among its 7,000-person membership, said Jim Kunz, the union’s business manager. … Now, since 2011, the Pittsburgh local has been at or near full employment. “It has been a godsend,” Kunz said. A recent study from the University of Illinois on construction employment in the Marcellus shale-related oil and gas industry from 2008 to 2014 shows Kunz’s statement to indeed be the case. … From 2008 to the first half of 2014, more than 72 million hours of direct and indirect construction labor has been worked on natural gas and oil projects related to the Marcellus shale, said the study’s author, Robert Bruno, a professor at the University of Illinois at Urbana-Champaign School of Labor and Employment Relations. “These hours translate to 36,321 actual construction workers … “Since 2012, employment on Marcellus shale natural gas projects represents the majority of oil- and gas-related construction work being done in the area,” the study said. … Kurt Rankin, an economist at PNC Financial Services Group, said the Marcellus shale boom can rival the local steel industry in its heyday. …  “There is a significant impact and there are still plenty of jobs to be created,” Rankin said. (Beaver County Times, 10/20/14)
  • Shale a “Strong Job Growth Engine” For Region’s Unions: Construction employment has been buoyed by projects related to Marcellus Shale development, according to a researcher at the University of Illinois at Urbana-Champaign. In studying 2008-to-2014 employment data for parts of Ohio, Pennsylvania and West Virginia, labor and employment relations professor Robert Bruno found that the shale fields are a strong job growth engine, having provided work for between 36,320 to 45,400 workers during that time. “An examination of national and relevant state unemployment data for the construction industry indicates that but for natural gas projects the region would have experienced substantially higher incidences of construction industry job displacement,” he wrote. (Pittsburgh Business Times, 10/20/14)

CONSUMER SAVINGS, MANUFACTURING BENEFITS

  • N.J. Consumers Realize More Savings “Thanks to Shale”:  Public Service Electric and Gas Co. is giving its residential gas customers a big bill credit for the next three months, worth about $118 a household, thanks to opportune purchases of shale gas. New Jersey’s largest utility announced Thursday it will credit residential customers 28 cents per unit for usage in November, December and January. The reduction will cut the average bill for the typical residential gas heating customer by about 31 percent. The bill credits are in addition to a nine-cent per unit reduction the utility already put into effect on October 1, which reduced its gas supply rate to its lowest level in 14 years. “We’re able to provide additional savings this winter given the continued availability of low-cost gas from the nearby Marcellus Shale Formation in Pennsylvania,” said Jorge Cardenas, PSE&G vice president of asset management and centralized services. (Philadelphia Inquirer, 10/23/14)
  • Shale a “true bright spot in America’s economy”: The largest sector of the Michigan economy, manufacturing directly employs more than 565,000 people. Manufacturing has been driving the Michigan recovery and leading the nation in manufacturing job growth, creating 110,000 new manufacturing jobs since 2009. For us, energy is a competitive issue, rooted in price and reliability. … The true bright spot in America’s energy future is the production of shale gas. Shale gas now makes up 50 percent of total U.S. natural gas production, compared to just 1 percent in 2000. So now, America produces 97 percent of the natural gas we use in America. That amount of production is truly fortuitous, as the federal government shuts off our primary power source of electricity generation in the Midwest. … The greatest risk to the economic benefits created by shale gas is over-regulation. While Michigan is not a major producer of shale gas nationally, about 12,000 shale gas wells have been built since the 1950s, without any incidents of water contamination. … Our goal to remain a strong manufacturing state that supports strong job growth for its citizens, however, is very simple. (Detroit News op-ed, 10/23/14)
  • Philadelphia should “seize this historic opportunity” tied to shale: The revolution in natural-gas production has the potential to provide immense benefits to the U.S. economy. … The Philadelphia region should be at the forefront of the natural-gas revolution. … Philadelphia has an excellent harbor, with the potential to serve as a hub for liquefied natural gas-fueled shipping and possibly LNG exports. … compared with several other cities around the country, progress on capturing the next wave of natural-gas-driven investment, job creation, and tax revenue is quite modest in the region. …  Local municipalities and UPS are ordering hundreds of natural-gas-fueled vehicles. Local shipbuilder Tote and maritime fleet operators like Crowley are building LNG-powered ships and planning to export LNG to the Caribbean. Together, these projects represent several hundred million dollars in direct investment …. What explains the difference between these two regions’ ability to seize the economic and environmental opportunities presented by natural gas? … The Jacksonville authorities have been supportive but not heavy-handed in leading this wave of development. … Southeastern Pennsylvania should seize this historic opportunity to capitalize on its unique geographic, logistical, human, and manufacturing endowments, and use public private partnerships to take full advantage of the natural-gas revolution in its backyard. (Philadelphia Inquirer op-ed, 10/24/14 
  • Shale Boosting Regional Manufacturing Jobs: Flanagan, executive vice president of corporate relations for the Allegheny County Conference on Community Development, spoke about “Pittsburgh’s Ongoing Transformation” during a breakfast business meeting Tuesday in Charleroi. … Employment in that region dipped to its lowest point in 1983, when the Metro Pittsburgh area’s unemployment rate hit 18 percent. In Beaver County alone, the rate was 29 percent. … The Pittsburgh region is “well positioned for success,” Flanagan said. … Manufacturing jobs are on the rise because of energy. … “Marcellus shale is the reason we’re seeing so much business development here,” Flanagan said. … By 2020, an additional 130,000 jobs will be available, many generated by the growth of the energy sector in the region. For a region with 1.3 million workers, that’s a 10-percent increase in job growth. (Tribune-Review, 10/22/14)

NEW ENERGY TAXES THREATEN JOBS

  • New energy taxes would be a “big hit” to local families: I am opposed to the natural gas extraction tax: 1) It’s less ethical than the impact fee; 2) it’s regressive, hitting the poor harder than the rich; and 3) it transfers wealth from our producing counties to voter-rich non-producer counties in the southeast. The impact fee says to drillers, “You mess it up, you pay for it.” That’s fair. The extraction tax says, “You’ve got something we want; gimme!”. … If heating costs average $800 per year, a 5 percent tax adds $40 — chump change for the well-to-do but a big hit for a poor family. The impact fee must return 60 percent of its collections to impacted counties. But the extraction tax won’t be so designated and will flow into the commonwealth’s General Fund instead. With 20 percent of the state’s population, we might expect to get back 20 percent of the take. … Why would we want to do this? (Post-Gazette letter, 10/20/14)
  • “Working families are counting on these gas jobs“: I work here in Lycoming County in the gas industry even though I live in Union County. Everyone at work talks about how the Democrats are driving job creators out of Pennsylvania. Rick Mirabito is a liberal who is driving away the gas industry with higher taxes. … Working families are counting on these gas jobs. Voting for Mirabito could take the food off of family tables. (Williamsport Sun Gazette letter, 10/22/14)
  • Job-Crushing Energy Taxes Will Hurt Pa. Families: Help me to understand as to who will ultimately pay the 5-percent natural gas extraction tax that Tom Wolf would impose once elected. If his cabinet company had to pay a 5-percent assembly tax, would this not be an expense, a cost, to his business, and would he not pass it on to consumers? Would he pay this out of his own pocket? Doubt it. So, as I see it, once the extraction tax is placed on the drillers, “we” will pay this additional cost. (Tribune-Review letter, 10/21/14)

AMERICAN ENERGY SECURITY

  • American Shale “Has OPEC Scrambling”: Our imports of foreign fuel have fallen to a 25-year low. These benefits aside, the economic stimulus provided by the industry in energy producing-states has been huge. … North Dakota, home to the vast Bakken shale, is an economic miracle. The state’s unemployment rate is the lowest in the country. Texas, thought to have seen its heyday of energy production long ago, is now producing more oil per day than Iran. It’s no surprise that U.S. Bureau of Labor Statistics shows that Texas is leading the nation in job growth. Ohio, one of the states hit hardest by the Great Recession, is emerging as another significant contributor to the shale revolution. The economic boost of energy development is bringing the southeast corner of the state back to life. Some $22.3 billion in shale-related investment has poured into the Buckeye state since 2013. … No longer a promise of what’s to come, the shale boom has arrived on main street America. … We have the entrepreneurial and innovative spirit, along with the resources to drive economic growth and leave the era of American energy insecurity in the dust.  Now all we need is for the federal government to assist with such energy and economic growth, not fight it. (The Hill op-ed, 10/24/14)
  • U.S Shale “Breaking the Back of OPEC”: America has become in the last several years an energy-producing powerhouse. … Over the last five years the United States has increased our domestic supply by a gigantic 50 percent. This is a result of the astounding shale oil and gas revolution made possible by made-in-America technologies like hydraulic fracturing and horizontal drilling. Already thanks to these inventions, the United States has become the No. 1 producer of natural gas. … Without this energy blitz, the U.S. economy would barely have recovered from the recession of 2008-09. … Here’s another reason to love the oil and gas bonanza in America. It’s breaking the back of OPEC. … The Arabs understand — as too few in Washington do — that the shale energy boom is no short-term fad. It could make energy cheaper for decades to come. … America, in sum, has been richly endowed with a nearly invincible 21st century economic and national security weapon to keep us safe and prosperous. The fall in gas prices is just one visible sign of this supply explosion. Think of how much bigger this revolution could be if we started building pipelines, repealed the ban on oil exports, drilled on public lands, and stopped trying to tax and regulate the oil and gas industry out of existence. (Washington Times op-ed, 10/18/14)

GENERATIONAL OPPORTUNITY

  • Chevron Working to Train Our Local Workforce: Chevron Corporation announced the launch of the Appalachia Partnership Initiative, a $20 million effort, designed to address education and workforce development in 27 counties across southwest Pennsylvania, northern West Virginia and eastern Ohio. … the initiative marks the beginning of a long-term regional commitment to improve Science, Technology, Engineering and Math (STEM) education and further develop a highly-skilled workforce for area energy and manufacturing industries. “Chevron is committed to building lasting relationships and creating prosperity in the Tri-State area and in every region where we operate,” said Rhonda Zygocki, executive vice president of Policy and Planning for Chevron Corporation. “Our success is deeply linked to the region’s progress, and we are proud to launch this long-term initiative to address critical STEM education and workforce development needs in the Tri-State area.” … Chevron, as part of a broader $130 million education pledge since 2011, is also announcing new local commitments to education and workforce development that include expanding partnerships with and investments. (Release, 10/21/14)
  • “Chevron puts $20M into educating, training Appalachian workers”: Chevron Corp. is putting $20 million into an education initiative aimed at training a new generation of energy sector workers in 27 counties above the Marcellus and Utica shale plays in which it’s an active gas producer. … The Chevron initiative will fund scholarships for ShaleNET and pay for energy labs in the Elizabeth Forward and Bethlehem Center school districts that will be staffed by Carnegie Mellon University graduate students. Part of the money will go to Project Lead the Way — a national nonprofit that develops STEM curriculum and trains teachers — to expand from 10 schools in the region to 20.… Hearne and others said the $20 million investment shows Chevron’s commitment to the region and to training local students from an early age so that drillers and others don’t need to import workers. … The new effort seeks to cultivate workers for the whole energy industry but targets the region that hosts the fastest-growing and most productive shale gas plays in the country. (Tribune-Review, 10/21/14)

SHALE IMPACT FEE TAXES BOOST COMMUNITIES

  • Shale Impact Fee Taxes Fund New Kutztown Recreational Facility: The Commonwealth Financing Authority (CFA) has awarded the park a $150,000 grant to replace its playground equipment. “Kutztown Park is the place children go when they want to be outside, but the equipment has become old and dangerous,” said Pa. Sen. Sen. Schwank, a Berks County Democrat. “The new investment will transform the playground into a place that kids truly love and parents will feel better about because they will know their children are safe.” … “I’m pleased to see this grant will not only fund repairs but make the play area more accessible to children with special needs.” The project will also include new walkways and natural elements, including stepping stones, logs and native plants. The CFA has also awarded $150,000 to a French Creek State Park project that will help the National Land Trust expand the park by buying an adjacent 54-acre tract of land. …  Money for the grants comes from impact fees collected from drilling in the Marcellus Shale, officials said. (WFMZ, 10/21/14)
  • Local Projects Receive Shale Impact Fee Tax Funding: A long-time levee project in Coudersport is taking another step toward completion, thanks to a recently announced $376,000 state grant. State Rep. Martin Causer, R-Turtlepoint, announced on Tuesday a flood mitigation grant from the Commonwealth Financing Authority that he said in the long run would help provide public safety, protect against property loss and damage and lower flood insurance rates for property owners. … The money would be used to raise the Mill Creek and Allegheny River levees, impacting more than 150 home and business owners in the region. “This is an important and worthwhile investment that will help ensure public safety and protect against property loss and damage,” Causer said. … And once the project is completed, it would bring a big savings to area residents, Morris said. “It’ll help with our property owners’ flood insurance rates,” she said. The funding comes through the Flood Mitigation Program, part of the Marcellus Legacy Fund established under Act 13 of 2012. (Bradford Era, 10/22/14)
  • Coal Twp. to Build New Rec Center With Marcellus Tax Funds: Children in one part of Northumberland County will soon have a new place to play, according to Coal Township commissioners. Coal Township is building a new recreation center and revamping a playground. … Earlier this week, Coal Township commissioners found out they will get close to $200,000, mostly from gas drilling fees to revamp the Arch Street Playground near Shamokin. “That’s really going to help us make this project move forward,” Gene Welsh said. … People who live near the Arch Street Playground say they are excited about the changes. … “There’s just nothing around this area for any kids or anything,” Dan Derk said. (WNEP, 10/23/14)

Are you a shale advocate? Visit UnitedShaleAdvocates.com to learn more about supporting safe, job-creating shale development.