Environmental Protection Need Not Cause Economic Stagnation

As more natural gas wells are drilled, environmental groups, and now lawmakers, are decrying the technology as unsafe or responsible for contamination.

Even the EPA announced it is conducting a new study of hydraulic fracturing process used in the Marcellus Shale.

But just as prominent are the the positive economic impacts. Unlike the alleged cases of water contamination, there is no denying an economic resurgence is in the making for rural Pennsylvanians.

• Consol Energy Inc. recently purchased Dominion Resources Inc.’s Appalachian Basin natural gas exploration-production business for $3.5 billion.
• With the Marcellus Shale PA could become self-sufficient in terms of energy: powering the state for 180 years.
• Exxon Mobil Corp.’s $41 billion deal in December to buy Houston-based XTO Energy Inc.
• Cheap power that could make the region attractive for relocation.
• $350 million investment in June by private equity firm Kohlberg Kravis Roberts & Co. in Warrendale-based East Resources Inc.
• Oklahoma City based Chesapeake Energy Corp’s $3.4 billion sale of 580,000 Marcellus acres to Norway’s Statoil in 2008.
• This year Talisman Energy Inc. will spend $1 billion developing its Marcellus Shale reserves in the state. The company will relocate its U.S. headquarters to Cranberry, PA with 125 employees occupying 50,000 square feet of new office space.
• And a Penn State University study last year projected that Marcellus-related activity by 2020 could translate into $13.5 billion of economic impact and nearly 175,000 related jobs.

Economic investment is pouring into the state, but this doesn’t have to result in a environmentalists versus evil gas drillers show down. A natural gas tax and additional oversight will do little to increase the already stringent environmental regulations in Pennsylvania, but they will drive away economic investment – it’s a lose-lose.