Burgh Energy Report: More Policy Geography

Reads as if Marcellus Shale drilling interests in Pennsylvania are getting nervous. Part of the public pressure stems from the the lack of natural gas exploration going on in neighboring New York State. Throwing another variable into an already thoroughly confusing situation:

Natural gas drilling activity in North America likely will decline in 2011, helping lift prices, as a wave of land leases expire and other incentives fade that have kept oil and gas companies charging ahead despite poor economics for the commodity, Devon Energy CEO John Richels said today in Houston.

The possibility (if not probability) exists that the shale gas rush will pass by New York. Given the growing backlash against energy companies (who have fumbled public relations thus far) in Pennsylvania and the suggested shifts in the market, what you see now may define gas extraction in the Northeast for quite some time. The drilling boom looks to end sooner rather than later.

Surely this will have a significant impact on the workforce development picture in Southwestern PA. More importantly, the Southern Tier of New York will be left out in the cold. Perhaps that is just as well, taking the environmentalist perspective. In terms of regional economics, I think it bodes well for Pittsburgh. Pennsylvania will learn, perhaps the hard way, how to coexist with the energy companies. I'm skeptical that the lessons learned will do New York State any good.