Shale gas calling: Could New York follow Pennsylvania’s lead?

If New York emulated Pennsylvania by using hydraulic fracturing to gain access to vast sources of natural gas from shale, it would galvanize economic growth in the Empire State and add $8 billion in income for upstate New Yorkers, according to a new study by the Empire Center for New York State Policy, a project of the Manhattan Institute for Policy Research.

To put it another way, residential income in the 28 New York counties above the natural gas-rich Marcellus Shale could jump 15 percent, the study’s authors said. Here’s why:

New natural gas production spurred by hydraulic fracturing would constitute an in-state energy supply, attracting more manufacturing back to the state.

The Manhattan Institute study justifies its heady projections for New York by analyzing the economic benefits that a boost in natural gas supplies from shale provided to Pennsylvania.

In the Keystone State, where nearly 5,000 wells have been drilled in the last decade, economic growth correlates positively with the number of wells in that area.

  • Pennsylvania counties with shale gas wells had more economic growth than counties without wells.
  • Counties with more than 200 wells also added jobs at a 7 percent annual rate during these four years, whereas areas with no drilling or just a few wells faced a 3 percent decrease in jobs.
  • Between 2007 and 2011, per-capita income rose by 19 percent in Pennsylvania counties with more than 200 wells, by 14 percent in counties with 20 to 200 wells, and by 12 percent in counties with fewer than 20 wells.
  • In counties that did not produce natural gas from shale, income rose only 8 percent. Counties with the lowest per capita incomes experienced the most rapid growth.

Like Pennsylvania, New York would enjoy greater growth even with minimal development of natural gas, Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute, explained in a recent commentary:

A New York county that permitted the drilling of a mere 20 wells could, in a four-year period, see per capita income rise 3 percent more than it would have if no wells had been drilled. New York’s towns can see immediate and concrete benefits in hydrofracturing wells: more money in resident’s pockets, more tax revenue for the state.

The benefits of abundant and affordable supplies of natural gas will be just one of a number of topics at an energy event on May 21 in Albany sponsored by ACC, the New York State Chemical Alliance and the Business Council of New York State Inc.

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