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PA – NY Marcellus Shale Activity Diverges

by Kenneth E. DuBose on August 1, 2011

Pennsylvania and New York have taken two very different paths in terms of Marcellus Shale drilling. Pennsylvania has largely embraced the industry, while New York has all but shut out the oil & gas industry. The ramifications of the two decisions are beginning to show. Marcellus Shale drilling in Pennsylvania is taking off and the state has increased gas production to 15 times more than it was in 2007. That’s in stark contrast to New York state where almost no jobs have been created production has not felt the impact of the Marcellus. For mineral owners, that means properties that are separated by a state border can have wide ranging valuations or the property in New York might not have a value.

If Marcellus Shale drilling isn’t allowed on a wide scale, you can almost bet that those minerals might not ever be worth what they are in Pennsylvania. Royalty dollars contribute millions to state economies every year. We hope that drilling goes forward in New York and the state begins to reap the benefits Pennsylvania is reaping today.

“More than 2,000 wells have been drilled in the Keystone State since 2008, and gas production surged to 81 billion cubic feet in 2009 from five billion in 2007. A new Manhattan Institute report by University of Wyoming professor Timothy Considine estimates that a typical Marcellus well generates some $2.8 million in direct economic benefits from natural gas company purchases; $1.2 million in indirect benefits from companies engaged along the supply chain; another $1.5 million from workers spending their wages, or landowners spending their royalty payments; plus $2 million in federal, state and local taxes. Oh, and 62 jobs.”"The state Department of Labor and Industry reports that Marcellus drilling has created 72,000 jobs between the fourth quarter of 2009 and the first quarter of 2011. The average wage for jobs in core Marcellus shale industries is about $73,000, or some $27,000 more than the average for all industries.”

Read the full news release at WSJ.com

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