New York Times on Marcellus Shale: With Growth Comes Problems

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In a recent article examining the impact of Marcellus Shale drilling in Pennsylvania, The New York Times asked me to put the state's tax policy on gas drilling in perspective. I explained that drilling isn't producing the tax revenue needed to address the significant impacts of drilling or to support shared state priorities. Check out the article.

Gas Boom Aids Pennsylvania, but Some Worry Over the Risk

By KATHARINE Q. SEELYE
Published: October 14, 2011

MONTROSE, Pa. — In the economic downturn three years ago, Adam Diaz idled the trucks at his bluestone quarry and silenced the saws at his lumber mill.

Fortunately for him, the gas companies arrived at about the same time, and Mr. Diaz saw an opportunity.

He started hauling their waste. He parlayed 1 truck into 8 and now has a fleet of 53. Then he revived a weedy rail spur and now leases 210 rail cars to haul more waste containers. His work force grew to 180 from 30 as he created a business that now has revenues of $45 million a year.

Other residents also began taking advantage of the “gas rush.” Some supplied the companies with machine parts; others laid pipe. One entrepreneurial couple opened a food wagon where they also sell alpaca socks to drillers from Louisiana and Texas who were unprepared for the cold.

The gas boom is transforming small towns like this one (population 4,400 and growing) and revitalizing the economy of this once-forgotten stretch of rural northeastern Pennsylvania. The few hotels here have expanded, restaurants are packed and housing rentals have more than doubled.

“There’s been a snowball effect due to the gas companies coming in,” Mr. Diaz, 33, said recently at his bustling empire near here.

But the boom — brought on by an advanced drilling technique called hydraulic fracturing, known as fracking — has brought problems too. While the gas companies have created numerous high-paying drilling jobs, many residents lack the skills for them. Some people’s drinking water has been contaminated. Narrow country roads are crumbling under the weight of heavy trucks. With housing scarce and expensive, more residents are becoming homeless. Local services and infrastructure are strained.

“Very little tax revenue goes to local governments to help them share in the benefits of the economic development,” said Sharon Ward, executive director of the Pennsylvania Budget and Policy Center, an independent policy research organization.

And some are asking whether short-term gains have obscured the long-term view of an industry marked by boom-bust cycles.

Read the Full New York Times story

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