Webinar to address economic impact of shale gas drilling on March 18

March 12, 2010

Sometimes research can provide clarity to a question, and sometimes it can cloud the waters even further. That may be the case with some economic-impact studies of shale-gas drilling in Pennsylvania.

"We're trying to clear away the murk a little bit," said Tim Kelsey, professor of agricultural economics in Penn State's College of Agricultural Sciences, who cautioned that he doesn't think any of the studies were definitive yet.

"To simply put it in black and white means there's an answer, and that there is a dollar value, and then we may lose the ability to have informed discussions about the dollar values and tradeoffs, whether that's the viewshed, people's quality of life, standard of living or recreation."

Kelsey will be the featured speaker during a free Web-based seminar titled, "The Impact of Marcellus Shale: What Do the Economic Impact Studies Imply?" which will air at 1p.m. on Thursday, March 18. Sponsored by Penn State Cooperative Extension, the "webinar" will provide an overview of some of the research used by decision-makers to assess factors for economic development in their communities. Information about how to register for the webinar is available at http://naturalgas.extension.psu.edu/Events.htm online. Participants will have the opportunity to ask the speaker questions during the session.

"We'll look at the range of different studies: highpoints, consistencies and inconsistencies across them -- what they tell us, what do they not tell us and how do people interpret them -- what makes make sense and what does not makes sense," he said.

Kelsey said most economic studies to date have focused on employment and income impacts, and not implications for local service, community or environmental impacts.

"We do know that Marcellus (shale development) brings opportunities for strong employment gain, increases in the community for landowners and local businesses," Kelsey said. "We're already seeing dollars flowing in and economic opportunities for many Pennsylvania communities."

Kelsey said in general, the benefits are going across the economy, though some sectors might have some challenges. He said it is sometimes difficult to tell how the dollars fall within the community because of the way some sectors are measured. For example, gas-drilling workers use lodging and restaurants, so the tourism economy -- as it is traditionally measured -- is doing very well, Kelsey said.

However, other parts of the tourism economy may be struggling a bit, such as souvenir shops, tourism recreation businesses like whitewater rafting or bicycle rentals, and destination locales. Kelsey said other measures might be difficult to separate. For example, if Marcellus workers are occupying many of the hotel rooms, hunters may face difficulty finding lodging. On the other hand, gas exploration has created many access roads into the backwoods, so that major portions of the forest land may now be available to hunters where they couldn't hunt before.

Kelsey said some of the impacts on local government stem from population changes, which are only just starting to occur in some parts of Pennsylvania.

"A lot of the activity has resulted in existing people in the community getting jobs, or itinerant workers staying in hotels, but no big transplant activity yet," he said. "For the best local economic impact, we'd want workers to live in the community where they work, to buy groceries, to volunteer and to pay taxes."

He added that this type of growth poses tradeoffs to the community, since strong economic impacts also increase the cost of services.

"If you have workers, and families, then you have more people, so there are more kids, and more drain on public services," he said.

Kelsey said he believes economic impact is one piece of the broader puzzle that needs to be put in context of other considerations, such as environmental issues, cultural issues, quality of life and historical elements. He warned that whatever economic studies the decision-makers see, they should consider them with other aspects that are important to the community.

"It is possible for a community to decide against a particular land use even if the economic impact is strong. Another community may face a land-use question which has a negative economic impact, but the community may approve it anyway, if that seems to be the right thing to do," he said.

The positive economic benefits from Marcellus also can create some economic challenges.

"What we're seeing in other states is that the gas industry can pay higher wages than other sectors, which creates wonderful opportunities for workers with the skills needed, but the flipside is that existing businesses in the community may have trouble finding and retaining employees who have those skills," Kelsey said.

Kelsey said the studies reflect what is known to date.

"We hope after the webinar, people will be able to ask more informed questions, see what the studies show and what the trends are so they can better understand some of the issues and trade-offs."

"Impact of Marcellus Shale: What Do the Economic Impact Studies Imply?" is part of an ongoing series of webinars addressing issues related to the state's Marcellus shale gas boom. For a list of upcoming webinars, visit the Web address listed above.

Previous webinars -- which have covered topics such as water use and quality, legal questions, gas-leasing considerations for landowners and implications for local communities -- can be viewed at http://naturalgas.extension.psu.edu/webinars.htm.

For more information, contact Joann Kowalski, extension educator in Susquehanna County, at 570-278-1158 or jmk20@psu.edu.

Last Updated January 10, 2015