Louisiana Adds 33,000 Natural Gas Jobs

Through increasingly stringent environmental regulations and the desire for a new severance tax, Governor Rendell has undermined Pennsylvania’s budding natural gas industry. Drilling companies are beginning to leave Pennsylvania due to higher than expected costs.

Contrast that with Louisiana, where drilling in Louisiana’s Haynesville Shale did not begin until 2008, long after many companies began investing in Pennsylvania’s Marcellus Shale. The Louisiana Natural Resources Department estimates that the increased investment from natural gas production has created $3.9 billion in household earnings, $3.2 billion in lease and royalty payments to landowners, 32,742 jobs, and increased state and local tax revenue by greater than $153 million – all in one year, largely insulating Louisiana from the economic recession.

The difference: in Louisiana, a drilling company can submit a one-page application and begin drilling the next day. Industry experts find Pennsylvania’s drilling requirements “confusing and inconsistent” with a slow approval process.

While some groups claim that a severance tax and heavy environmental regulations will “protect Pennsylvania taxpayers,” Governor Rendell will not receive the expected tax collections to fund next year’s budget as his policies are sending the thousands of jobs and billions of dollars in investments to states with more favorabe business climates.

Click here for my recent commentary on taxing Pennsylvania’s natural gas industry to death.