Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on August 4, 2013
How natural gas is sparking Pennsylvania’s economy
There is one thing about our economy that everyone seems to agree about–things are looking up, but don’t be too optimistic.
View full sizeSome natural gas pipeline companies are applying for eminent domain status in Pennsylvania.President Barack Obama is calling it “stability, not security” in his current rounds of economic talks. A recent Wall Street Journal headline echoes this “glass half full, glass half empty” assessment, noting that while housing is rebounding, first-time home owners are not.
In other areas, The Journal notes that “forecasts trimmed as spending slows.”
Earlier this month, the McKinsey Global Institute came out with a study identifying five “catalysts” to shift the economy into a higher gear, increase annual GDP, and create new jobs. In Pennsylvania, we have seen the beginning effects of these catalysts, in particular energy and trade.
The big winner for the Commonwealth is energy, specifically shale gas and oil. The report shows just how much this industry can help our economy – or could dampen any improvement if we make the wrong economic policy decisions.
Nationally, shale gas and oil has the potential to boost our nation’s gross domestic product by between $380 billion and $690 billion. Those are huge numbers and represent almost four percent of our estimated GDP in 2020.
The second catalyst, according to McKinsey, is trade growth, and that is another place where energy can make a substantial contribution. Right now, there are 19 applicants waiting on federal government agencies to provide licenses necessary for liquefied natural gas (LNG) export terminals.
Due to discoveries such as the Marcellus Shale under much of Pennsylvania, and breakthroughs in technology to extract natural gas and oil, we have a special opportunity to export natural gas.
This could actually turn the economic tables, making the United States a net energy exporter for the first time in decades. Already the Marcellus Shale and related industries are responsible for 239,474 jobs in Pennsylvania, according to our state Department of Labor and Industry.
This is the upside. Unfortunately, the wrong economic decisions could endanger these opportunities. For example, the current Administration has only approved one LNG export terminal application.
Without the capability of exporting LNG through multiple terminals, we cannot expect to reap the new jobs and economic advantages of expanding our trade. We need to be nimble and move much more quickly to approve applications that have been waiting for months, if not years.
Further, continually raising taxes on energy companies will hamper economic and job growth. Oil and gas companies already pay some of the highest tax rates in this country. Yet the Administration is calling for new ways to raise taxes on energy companies.
For example, it wants to take away the ability for energy companies to claim tax credits (available to all other industries) for creating new manufacturing jobs, and it wants to double tax these companies on their foreign earnings.
Not every industry has the capability to make such a substantial impact on our economy. When an industry, such as energy, does have the potential, we need to encourage it.
The McKinsey report makes very clear the upside, game-changing opportunities of shale gas and oil production. We would do well to encourage such a stimulus.
Charles E. Greenawalt II is the senior fellow of The Susquehanna Valley Center for Public Policy, a non-profit, non-partisan think tank based in Hershey. Clifford Frick is the Administrative Director of The Susquehanna Valley Center.
10 Comments on "How natural gas is sparking Pennsylvania’s economy"
BillT on Sun, 4th Aug 2013 3:33 pm
This organization is funded by the Petroleum industry BTW. And a number of other ‘non-interested’ parties like banks, communications, etc. This area of PA is my home turf.
Plantagenet on Sun, 4th Aug 2013 4:13 pm
Doesn’t sound like Fracking has injured you yet, and its doing good things for the economy as a whole.
FRACK BABY FRACK!
Bob Owens on Sun, 4th Aug 2013 6:04 pm
Everything will be fine if only we do everything the oil/gas industries want us to do! This article is a hoot! Got a good laugh out of it. They forgot to mention that the same amount of money and resources put into renewable energy would give us even more jobs and 100% energy security as a bonus!
BillT on Mon, 5th Aug 2013 12:59 am
Planet, fraking started AFTER I moved out of the state. You really need to put your brain cells into gear before you type. May you suffer greatly from your greed.
GregT on Mon, 5th Aug 2013 5:01 am
Any jobs created, will be temporary. After the resources are gone, and they will be, reality will set in. It would make much more sense to use the resources to build out alternate energy infrastructure. Doing so won’t save us all from what is coming, but maybe some will survive.
The oil and gas industry does not care about the future, they only care about profits today. We desperately need to change this flawed way of thinking, or we all will be screwed.
Luke on Mon, 5th Aug 2013 6:57 am
We got rid of the slavery in the 1800’s. When do we shake off the slavery of Big Oil? Yes we can!
Arthur on Mon, 5th Aug 2013 7:17 am
“We got rid of the slavery in the 1800′s. When do we shake off the slavery of Big Oil? Yes we can!”
Umm, the abolishment of slavery and the rise of big oil were strongly connected. The reason why the North abolished slavery was not for morals but because of the application of fossil fuel, which resulted in so many virtual energy slaves that industrialists could not be bothered by keeping human slaves.
So before you start the shaking, make sure you have a successor for big oil, assuming you do not intend to use the services of Uncle Tom again.
Arthur on Mon, 5th Aug 2013 7:27 am
“The oil and gas industry does not care about the future, they only care about profits today. We desperately need to change this flawed way of thinking, or we all will be screwed.”
Yes, but if one makes proposals for alternatives, one gets easily denounced here as a ‘techie’. The impression arrises that quite a few have enough of industrialism altogether and are yearning for the American variety of European romanticism. Dances with wolves. That kind of stuff.
Arthur on Mon, 5th Aug 2013 7:30 am
“Doesn’t sound like Fracking has injured you yet, and its doing good things for the economy as a whole. FRACK BABY FRACK”
Plant, you sound like a caricature from a comic book?
Can you state the problems that come with fracking, without looking it up?
GregT on Mon, 5th Aug 2013 4:41 pm
Alternatives are not going to replace oil, not even close. The population will be adjusted accordingly.
It would still make more sense to use some of the remaining resources to build infrastructure for a post-oil world, than to continue raping the planet leading to a dead end for our species.
Unfortuntely, it certainly appears that we are choosing the latter.