Marcellus gas not hurting or helping municipal finances

August 16, 2011

While being credited by many as a major new economic engine for Pennsylvania, Marcellus shale gas-development so far may not be having much of an effect on the finances of local municipalities, according to a study by two researchers in Penn State's College of Agricultural Sciences.

Michael Jacobson, associate professor of , and Tim Kelsey, professor of , examined how and production activities are affecting municipal government and services in two rural counties where they are occurring.

They examined a decade of revenue and expenditure data from more than three dozen townships in Washington and Susquehanna counties, all of which are experiencing significant activity.

"Surprisingly, we found no significant differences in spending or revenue collection before and after Marcellus activity in those townships," said Jacobson, who specializes in forest economics, finance and policy. "The statistical analysis of the audit information showed no clear relationships between Marcellus Shale activity and municipal finances."

The researchers cautioned, however, that as the scale of Marcellus development increases, municipalities may need to provide new services they do not currently support. Municipalities also may discover they need to expand existing services such as planning and management.

"We had only two solid years of fiscal data as gas development is relatively new," Jacobson said. "I think as the gas play expands, our conclusions will change -- a lot will depend on the rate of scaling up development and accompanying fiscal impacts."

The researchers noted that in the townships studied, gas companies were mostly proactive in repairing and upgrading roads damaged by gas-related traffic, and that helped municipal budgets as road maintenance and repair account for a large share of municipal spending.

But some municipalities reported having to hire new staff to deal with Marcellus issues -- an unanticipated cost -- or having to shift responsibilities of existing staff.

"Municipalities identified a range of impacts their local governments were experiencing as a result of Marcellus Shale development, but they stated that so far, most have been either nonmonetary or they have internally shifted resources to cover them, so the impacts do not appear in the municipal budget," Jacobson said.

"Even with significant gas development, some officials said they have not 'spent a nickel' on gas-related issues."

In addition to examining local government audit data for each year from 2001 to 2009, the researchers conducted focus group interviews with municipal officials in both counties.

"There may be unforeseen costs that crop up -- environmental and infrastructure-related come to mind," Jacobson said. "On the positive side, the play already has brought new jobs, industry and development that will provide added revenues to help offset the cost of these services."

A Marcellus Education Fact Sheet detailing the findings of the research is available at online.

Explore further: Hundreds attend EPA hearing on Pa. gas drilling

Related Stories

Hundreds attend EPA hearing on Pa. gas drilling

July 22, 2010

(AP) -- Hundreds of people are attending a U.S. Environmental Protection Agency hearing in southwestern Pennsylvania on a controversial natural gas drilling technique called hydraulic fracturing, or "fracking."

Marcellus shale needs scientific study to set guidelines

October 12, 2010

The Academy of Natural Sciences is calling for a comprehensive research plan that would result in guidelines and an assessment tool for regulators and managers in order to minimize the environmental impact of Marcellus Shale ...

'Hydraulic fracturing' mobilizes uranium in marcellus shale

October 25, 2010

Scientific and political disputes over drilling Marcellus shale for natural gas have focused primarily on the environmental effects of pumping millions of gallons of water and chemicals deep underground to blast through rocks ...

Recommended for you

48-million-year-old horse-like fetus discovered in Germany

October 7, 2015

A 48 million year-old horse-like equoid fetus has been discovered at the Messel pit near Frankfurt, Germany according to a study published October 7, 2015 in the open-access journal PLOS ONE by Jens Lorenz Franzen from Senckenberg ...

Chimpanzees shed light on origins of human walking

October 6, 2015

A research team led by Stony Brook University investigating human and chimpanzee locomotion have uncovered unexpected similarities in the way the two species use their upper body during two-legged walking. The results, reported ...

How much for that Nobel prize in the window?

October 3, 2015

No need to make peace in the Middle East, resolve one of science's great mysteries or pen a masterpiece: the easiest way to get yourself a Nobel prize may be to buy one.

The dark side of Nobel prizewinning research

October 4, 2015

Think of the Nobel prizes and you think of groundbreaking research bettering mankind, but the awards have also honoured some quite unhumanitarian inventions such as chemical weapons, DDT and lobotomies.

Who you gonna trust? How power affects our faith in others

October 6, 2015

One of the ongoing themes of the current presidential campaign is that Americans are becoming increasingly distrustful of those who walk the corridors of power – Exhibit A being the Republican presidential primary, in which ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.