Proceed with Caution: Report on Pa.'s Energy Future Makes Unreliable Economic Claims

HARRISBURG, PA (December 21, 2012) - Sharon Ward, Director of the Pennsylvania Budget and Policy Center, responded to the recent U.S. Chamber of Commerce/IHS report, America's New Energy Future: The Unconventional Oil and Gas Revolution and the U.S. Economy[1]:

"The U.S. Chamber of Commerce/IHS report on Pennsylvania's energy future must be viewed with caution. It makes the same inflated claims about gas drilling's impact on job growth and tax revenue as previous industry studies that have been widely discredited[2]. At the same time, the report completely ignores the costs that drilling imposes on citizens, the environment, states and local communities. 

"Despite all the hype, unconventional gas development provides a tiny share of employment and tax revenue.

"The industry provides one-half of 1 percent of all jobs in Pennsylvania. If the rosy job projections in the IHS report are correct, the industry will total 5% of state employment in 20 years.

"Today, employment in the Marcellus core industries represents 1 out of every 200 jobs in the commonwealth. By comparison private-sector jobs in manufacturing, education and health care in Pennsylvania account for roughly 1 out of every 3 jobs in Pennsylvania, a ratio that is essentially unchanged since before the expansion of Marcellus drilling in Pennsylvania.

"The report attributes $900 million in state and local corporate taxes paid in 2012 to shale development, fully one-third of all corporate taxes collected by the state. The Pennsylvania Department of Revenue's own estimates for corporate taxes paid by drillers, pipelines, and their related companies total less than 10 percent of this amount in 2012.

"The IHS report acknowledges that low-market natural gas prices have caused the number of core jobs in Pennsylvania to plateau and the number of active drilling rigs to decline by more than a third in 2012. Pipeline projects have been put on indefinite hold as developers move to other opportunities.

"Many Pennsylvanians are deeply concerned that shale gas development is already occurring at a frenetic pace, without the regulatory and fiscal structures necessary to ensure it is done safely and without cost to taxpayers. What is needed moving forward is more caution, rather than more hype.

"The game has started. It's time to take the cheerleaders off the field and turn the game over to the coaches."

Endnotes

[1] http://www.energyxxi.org/americas-energy-future

[2] http://www.northcentralpa.com/article/penn-state-admits-gas-study-flaws; http://blog.timesunion.com/green/university-at-buffalo-pulls-plug-on-natural-gas-hydrofracking-institute/4306/; http://dotearth.blogs.nytimes.com/2012/12/06/damning-review-of-gas-study-prompts-a-shakeup-at-the-university-of-texas/