Abstract
This study examines the economic potential of unconventional shale gas drilling and production activities in Washington County, Pennsylvania. It fills the research gap of county level economic analysis for Marcellus Shale development in southwestern Pennsylvania, one of the most active areas of shale gas development in America. This study uses the input–output model to analyze drilling and production activities based on public information in order to estimate total economic potential. In addition, the study discusses changes in taxable income from rents, royalties, patents, and copyrights; other taxable income; local housing and rental prices; county real estate tax revenue; sales tax revenue; hotel occupancy; and royalty payments on county-owned lands.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsNotes
- 1.
Local purchase percentage is defined as the amount of value that is considered to be having an impact on the local economy, according to IMPLAN. http://implan.com/V4/Index.php
- 2.
Pennsylvania Department of Environmental Protection (2013) Oil and gas well drilling and production in Pennsylvania. http://www.elibrary.dep.state.us/dsweb/Get/Document-94407/8000-FS-DEP2018.pdf. Retrieved 14 July 2014.
- 3.
Pennsylvania Department of Environmental Protection. Oil and gas reports. http://www.depreportingservices.state.pa.us/ReportServer/aspx?/Oil_Gas/Wells_Drilled_By_County. Retrieved 13 July 2014.
- 4.
Washington County, http://www.co.washington.pa.us/index.aspx?nid = 233. Retrieved 13 July 2014.
- 5.
Pennsylvania Department of Environmental Protection (2013) Oil and gas well drilling and production in Pennsylvania. http://www.elibrary.dep.state.us/dsweb/Get/Document-94407/8000-FS-DEP2018.pdf. Retrieved 13 July 2014; Pennsylvania Independent Oil and Gas Association “Traditional Oil and Gas Industry” http://www.pioga.org/publication_file/pioga-traditional-industry-fact-sheet.pdf. Retrieved 14 July 2014.
- 6.
US Energy Information Administration (April 20, 2012) “What are natural gas liquids and how are they used?” http://eia.gov/todayinenergy/detail.cfm?id = 5930. Retrieved 6 July 2014.
- 7.
US Energy Information Administration (8 May 2014) “High value of liquids drives U.S. producers to target wet natural gas resources”. http://www.eia.gov/todayinenergy/detail.cfm?id = 16191. Retrieved 6 July 2014.
- 8.
The Map of Wet-Dry Gas, Marcellus Center for Outreach & Research, Penn State University. http://www.marcellus.psu.edu/resources/maps.php. Retrieved on 3 Jan 2014.
- 9.
Determined by reference to a 2011 map of Southpointe, and the review of the business activities of its residents.
- 10.
Pennsylvania Oil and Gas Lease Act, the Act of July 9, 2013, amending the Pennsylvania Guaranteed Minimum Royalty Act of 1979, 58 P.S. Sections 1–5
- 11.
Pennsylvania Department of Environmental Protection (2012) Landowners and oil and gas leases in Pennsylvania. http://www.elibrary.dep.state.pa.us/dsweb/Get/Document-91369/8000-FS-DEP2834.pdf. Retrieved 14 July 2014.
- 12.
Washington County Finance Department.
- 13.
Pennsylvania Act 13, the Act of February 14, 2012, P.L. 87, No. 13, 58 P.S. Section 2301 et seq.
- 14.
Chapter 23 of Act 13, 58 P.S. Sections 2301–2316.
- 15.
Pennsylvania Public Utility Commission http://www.puc.state.pa.us/filing_resources/issues_laws_regulations/act_13_impact_fee_.aspx. Retrieved 16 Jan 2014.
- 16.
Ibid.
- 17.
In this study, “drilling” refers to the entire process of drilling unconventional wells including site preparation, drilling vertical and horizontal wells, hydraulic fracturing, well completion, and production to gathering. “Production” refers to the process of extracting natural gas and related products from unconventional gas wells and well maintenance. The value is calculated based on wellhead prices minus the cost of depreciation, fee of gathering pipelines, and other amortization charges incurred in previous years.
- 18.
This study revised the standard induced amount of spending in IMPLAN under different royalty payment rates.
- 19.
IMPLAN. http://implan.com/V4/Index.php
- 20.
The cost of production to gathering in the context of this study includes the payment of right-of-way easements, material cost and installation, and cost of short-distance pipelines before a processing plant or main transmission grid.
- 21.
Refer to Kilmer v. Elexco Land Services, Inc., 990 A. 2d 1147 (PA 2010).
- 22.
Numerical findings presented in this section are based on the 2011 price.
References
Brundage TL, Jacquet J, Kelsey TW, Ladlee JR, Lobdell J, Lorson JF, Michael LL, Murphy T (2011) Pennsylvania statewide Marcellus Shale workforce needs assessment. Marcellus Shale Education and Training Center, Penn State University
Gamrat F (2013) Marcellus royalty payments rising rapidly. Allegheny Institute for Public Policy, Policy Brief 13(27). http://www.alleghenyinstitute.org/wp-content/uploads/components/com_policy/uploads/Vol13No27.pdf
Gopalakrishnan S, Klaiber HA (2012) Is the Shale boom a bust for nearby residents? Evidence from housing values in Pennsylvania. Am J Agric Econ 96(1):43–66
Governor’s Marcellus Shale Advisory Commission (2011) “7/22/2011 Report” Office of the Lieutenant Governor, Commonwealth of Pennsylvania. http://files.dep.state.pa.us/PublicParticipation/MarcellusShaleAdvisoryCommission/MarcellusShaleAdvisoryPortalFiles/MSAC_Final_Report.pdf
Halaby D, Oyakawa J, Shayne C, Keairns C, Dutton A (2011) Economic impact of the eagle ford Shale. Institute for Economic Development, Center for Community and Business Research, University of Texas at San Antonio
Hefley WE, Seydor SM, Bencho MK, Chappel I, Dizard M, Hallman J, Herkt J, Jiang P, Kerec M, Lampe F, Lehner CL, Wei T, Birsic B, Coulter E, Hatter EM, Jacko D, Mignogna S, Park N, Riley K, Tawoda T, Clements E, Harlovic R (2011) The economic impact of the value chain of a Marcellus Shale Well. Joseph M Katz Graduate School of Business, University of Pittsburgh, Working paper
Higginbotham A, Pellillo A, Gurley-Calvez T, Witt TS (2010) The economic impact of the natural gas industry and the Marcellus Shale Development in West Virginia in 2009. Bureau of Business and Economic Research, College of Business and Economics, West Virginia University
Kelsey TW, Shields M, Ladlee JR, Ward M (2012) Economic impacts of Marcellus Shale in Bradford County: employment and income in 2010. Marcellus Center for Outreach & Research, Penn State University
Lazarus WF, Platas DE, Morse GW, Guess-Murphy S (2002) Evaluating the economic impacts of an evolving Swine Industry: the importance of regional size and structure. Rev Agric Econ 24(2):458–473
Lipscomb CA, Kilpatrick SJ, Wang Y (2012) Unconventional Shale gas development and real estate valuation. Rev Reg Stud 42(2):161–175
Muehlenbachs L, Spiller E, Timmins C (2012) Shale gas development and property values: differences across drinking water sources. NBER Working paper
U.S. Census Bureau (2010) Census of population. U.S. Department of Commerce, Washington, DC
U.S. Census Bureau (2011) 2007–2011 American Community Survey 5-Year Estimates. U.S. Department of Commerce, Washington, DC
U.S. Department of Energy (2009) Modern Shale Gas in the United States: a primer. http://www.netl.doe.gov/technologies/oil-gas/publications/EPReports/Shale_Gas_Primer_2009.pdf
U.S. Energy Information Administration (2011) Review of emerging resources: U.S. Shale Gas and Shale Oil Plays. http://eia.gov/analysis/studies/usshalegas/pdf/usshaleplays.pdf
Washington County Planning Commission (2005) Washington County Comprehensive Plan, Adopted November 23, 2005. http://www.co.washington.pa.us/downloads/Washington_County_Comprehensive_Plan.pdf
Weinstein AL, Partridge MD (2011) The economic value of Shale natural gas in Ohio. Ohio State University, Working paper
Acknowledgments
This study was supported by Center for Energy Policy and Management at Washington and Jefferson College, Washington County Energy Partners, and MSC Foundation.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2015 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Wang, Y., Stares, D. (2015). Analysis of the Shale Gas Economy in Washington County, Pennsylvania. In: Hefley, W., Wang, Y. (eds) Economics of Unconventional Shale Gas Development. Natural Resource Management and Policy, vol 45. Springer, Cham. https://doi.org/10.1007/978-3-319-11499-6_3
Download citation
DOI: https://doi.org/10.1007/978-3-319-11499-6_3
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-11498-9
Online ISBN: 978-3-319-11499-6
eBook Packages: Business and EconomicsEconomics and Finance (R0)