Pres. Obama visits Pa. and N.Y.; highlights a ‘Tale of Two States’ on shale gas

President Obama’s trip to western Pennsylvania and New York has triggered a renewed debate about the economic benefits of abundant, affordable natural gas in two states with dramatically different policies on shale production and manufacturing growth.

“Pennsylvania and New York State may border each other but they are a thousand miles apart in terms of their philosophies about hydraulic fracturing,” energy reporter Ken Silverstein wrote last week.

Such differences are surprising given the states’ shared economic history. Both persevered through the Great Recession. From 2000 to 2010, nearly 40 percent of New York’s manufacturing jobs vanished. Pennsylvania lost almost 35 percent of its manufacturing jobs.

That was then, this is now. During the last five years, the Keystone State has seen a reversal of its economic fortunes, in part by embracing natural gas to resuscitate its manufacturing economy, drive investment and create jobs. “And it’s helped create wealth in the poorest areas of Pennsylvania,” the state’s former Democratic Gov. Ed Rendell said recently.

Nationally, the story is the same. The American Chemistry Council has released a report showing that the competitive advantages provided by natural gas have encouraged chemical manufacturers to plan dozens of projects in the United States worth billions of dollars.

Meanwhile, New York has so far opted out of natural gas production. Many economic experts say Pennsylvania made the smarter choice. Forbes recently offered a decidedly pro-Pennsylvania take on the issue:

The economic benefits from the increased supply of shale gas in the Northeast are tangible and growing. But while Pennsylvania has embraced its reserves, adding an estimated 250,000 shale related jobs in recent years, New York is entering its sixth year of a fracking moratorium.

Brad Gill, executive director of New York’s Independent Oil and Gas Association, used Obama’s visit to highlight the differences between New York and Pennsylvania, as well as the president and his governor. He has urged Governor Cuomo to “get on board with the president and America’s energy revolution.” According to Gill:

The president’s visit to New York’s Southern Tier and Pennsylvania’s Northern Tier will punctuate the economic disparity between the two regions – one of which is thriving with natural gas development under a sensible regulatory structure – and the other, in New York, whose economy is withering under political uncertainty.

A Manhattan Institute report has found that per capita income soared in Pennsylvania counties with shale gas wells. Using the Pennsylvania data to project the benefits of natural gas from shale on New York counties, the study said that the income of residents in the 28 New York counties above the Marcellus Shale has the potential to expand by 15 percent or more over the next four years – if the state’s moratorium is lifted.

Nobody knows what Gov. Cuomo will decide on fracking. Cuomo is listening to the economic arguments. “Every area that has participated in fracking will tell you that it’s increased commercial activity and it has an economic benefit,” Cuomo said recently. “The president’s point that fracking has economic benefits, energy benefits for this country — that’s inarguable.”

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