Sunday, November 06, 2011

Searching For Marcellus Shale Dividend

To be sure, shale gas has been a boon to the Pennsylvania economy. The debate is about how much of a boon. As one would expect, industry is prone to gross exaggeration. The numbers simply are not as impressive as the pro-fracking camp would like them to be. Along those lines, two posts from the blog Carpe Diem help me explain.

The latest numbers from Job Service North Dakota’s Labor Market Information Center report that Williams County has the lowest unemployment rate in the state, and perhaps the lowest in the entire United States September numbers, which are the most recent available, put Williams County at a staggeringly-low 0.9 percent.

Is there county anywhere in Pennsylvania that can boast similarly good news? Energy boosters are cherry picking the data. One county does not a national job recovery make.

"Resource-rich Alaska took in nearly $1.9 billion more than expected last fiscal year thanks largely to high oil prices and ended the fiscal year with an estimated $260 million surplus, an amount equal to nearly 4 percent of its general fund.

A handful of states — led by those that enjoy bountiful energy reserves such as West Virginia, Wyoming and North Dakota — have found themselves in similarly enviable positions, oases of optimism in an otherwise barren landscape of budget cuts and government layoffs. A few other states, including Massachusetts, South Carolina and Virginia, have combined slight increases in tax revenue with tight spending controls to produce modest surpluses.

In West Virginia, the surplus is going toward reserves, pension programs and debt. Wyoming put much of the extra money into savings after years of investing heavily in roads and schools.

Pennsylvania enjoys "bountiful energy reserves" such as shale gas. The state is noticeably absent from the story about the revenue boom. So much for the nonsense about public coffers overflowing from existing taxes on Marcellus Shale associated business.

A severance tax on drilling isn't even on the table for discussion in Pennsylvania. It should be. The jobs cup isn't overflowing. The state and its municipalities are still struggling with crushing public debt. The various proposed impact fees are a joke, an insult to PA residents. Industry is having a field day.

The debate is mostly about whether or not to frack shale. How much regulation will there be? How much financial remuneration for the drilling damage? Should local government make drilling regulation? I'm sure industry is happy the current lines in the sand. How can I be sure? Billions of dollars in investment keep streaming into the state.

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