Real Natural Gas Impacts in Pennsylvania
The dialogue about a potential impact fee on natural gas extraction from the Marcellus and other shale formation must be based on facts, and acknowledge that the industry is bringing new jobs and economic growth across the Commonwealth, as well as clean, domestic energy for the benefit of our entire country.
The Pennsylvania Independent Oil & Gas Association supports this type of rational and balanced dialogue and looks forward to providing the facts that ensure the contributions now being made by the natural gas industry are recognized by Pennsylvania’s legislative and executive branches of government.
Every human activity has some type of “impact” – on people and their surroundings. The extraction of oil and natural gas from shale formations also has some impacts on local communities, and most of those impacts are being addressed and compensated by an industry making an investment in the Commonwealth over the past half-decade that is unprecedented…and still in its earliest phase of development.
There are also very important and valuable positive impacts being made across the Commonwealth, as summarized below:
Positive Job Impacts:
The growth of the natural gas industry in Pennsylvania has been the subject of a number of recent studies and analyses, all of them pointing to future job growth across a broad spectrum of industries and professions. This growth has clearly emerged – following brief period of workplace training and gaining an understanding of the nature of the natural gas industry, and interrupted by a global recession – and is shown in the jobs being created in counties where drilling activity is taking place.
The best source for objective and updated information about the industry’s positive impact on employment in the Commonwealth can be found in the link below: The Pennsylvania Department of Labor and Industry’s “Marcellus Shale Fast Facts,” statistics that are compiled monthly about the industry’s performance as an economic engine and job creator. The September 2011 edition can be found at the link below:
http://www.paworkstats.state.pa.us/gsipub/index.asp?docid=775
Positive Revenue Impacts:
The contributions from the industry is also shown in increased payments of broad-based taxes to the Commonwealth over the past five years. These numbers refute the preposterous claim that the industry is “not taxed” and provide a clear indicator that this growth can continue into the future with policies that encourage, rather than discourage, the development of this important source of clean energy.
Direct tax payments from natural gas producers and ancillary support companies to the Commonwealth have been calculated by the Pennsylvania Department of Revenue to be nearly $1.2 billion since 2006, including $292 million in revenue paid during the first six months of 2011 alone. The document below summarizes these payments to the Commonwealth.
http://www.pioga.org/publication_files/direct-tax-payments.pdf
Personal Income Tax payments to the Commonwealth from employees and royalty owners in the oil and gas industry show similar huge increases in the past several years, a trend that will continue as late tax returns for 2010 are filed during the fall of this year. The document below highlights those increases.
http://www.pioga.org/publication_files/personal-income-tax-payments.pdf
A third key piece of compiled tax statistics is summarized in the February 2011 report below from Penn State’s Cooperative Extension Service that includes sales tax payments from counties around the Commonwealth in the three-year period between July 2007-June 2010. Sales tax payments in counties with more than 150 wells drilled during those three years increased 11 percent, while those from counties with no drilling activity decreased 6 percent. A 17 percent disparity in this measure of general business activity, especially during a period that included a significant global economic crisis, is a major positive indicator of growth that cannot be dismissed.
http://pubs.cas.psu.edu/FreePubs/pdfs/ua468.pdf
Positive Impacts in the News
The news media in Pennsylvania is slowly realizing and reporting on this important aspect of the industry. Large and small businesses are hiring, expanding and opening new offices to serve natural gas developers. Here are a few examples of those stories:
The Tribune-Review tells the real story about taxes being realized by the Commonwealth from royalty owners.
The Citizens-Voice covers five years of continued growth at Cleveland Brothers, a heavy equipment and construction sales company with 27 offices in Pennsylvania and West Virginia.
National Public Radio details the doubling of Honesdale-based Linde Corporation’s business through the company’s pipeline work in the natural gas industry.
MarketWatch focuses on growth and competition for workers in the energy sector, including an estimated 200,000 total new jobs in the industry in 2011.
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