The People of America's Oil and Natural Gas Indusry

New Study: Marcellus Shale = 280K New Jobs, $6 Billion Revenue

Jane Van Ryan

Jane Van Ryan
Posted July 21, 2010

Natural gas production in the Marcellus Shale could generate nearly $6 billion in government revenue, 280,000 new jobs and more than 18 billion cubic feet of clean-burning natural gas per day, according to a new study.

The study--"The Economic Impacts of the Marcellus Shale: Implications for New York, Pennsylvania, and West Virginia"--is authored by Timothy J. Considine, Ph.D. of Natural Resource Economics, Inc., and expands on a recent Penn State analysis, which found similar economic benefits from developing the shale play.

Also among Considine's findings:

  • Marcellus shale production grew considerably in 2009, adding 57,000 new jobs mostly in Pennsylvania and West Virginia.
  • Development of the Marcellus formation could mean $24 billion in total economic value to the region, which would positively impact all sectors of the economy including the service industry, construction, manufacturing, health care, and education.

The study also points out a number of policy proposals that could impede natural gas development in the region and inhibit the benefits of production, including:

  • The current de facto moratorium on horizontal drilling in New York, leading to an estimated $11 billion dollar loss in economic output; and
  • A challenging tax and regulatory climate in West Virginia.

Considine writes:

"Policymakers need to keep in mind the unique features of unconventional gas production. Simply put, maintaining production growth is like running on a treadmill, slowdown drilling and production quickly slips back. Societal welfare is improved with policies that encourage the growth of the industry, the economy, and ultimately the tax base."

The Marcellus Shale would be the second largest natural gas field in the world, if fully developed.


Update on July 21, 2010: Watch a video below featuring Tim Considine, Ph.D., discussing economic benefits of Marcellus Shale development.