Planning is the key to long-term Marcellus benefit

Having gas is great, but it’s what you do with it that counts.

That was the message Timothy Kelsey came to the Wayne County Oil and Gas Taskforce to spread Wednesday evening.

A professor of agricultural economics at Penn State University, Kelsey says in recent years he has been increasingly occupied with economic development and planning initiatives  surrounding Marcellus Shale extraction in the state.

“I’m neither pro or con,” He began, “But I think it’s important to understand both sides and study all of the environmental, economic and community impacts of gas extraction.”

With the help of a PowerPoint presentation, Kelsey spent a little over an hour laying out data he and his colleagues have collected from areas where gas extraction is already underway in an effort to help the 32 members of the task force get a better handle on what to expect once drilling gets underway in this corner of the state.

“I am an economist,” He went on, “And I’ve spent the last 20 years studying local planning and land use issues from that standpoint. But while it’s true that the Marcellus gas play in Pennsylvania stands to have a big impact on our economy, I think economic considerations must be understood within the context of other things.”

Kelsey began his presentation by outlining the demographic and geographic layout of the Marcellus Shale play in Pennsylvania. With maps and charts to illustrate, he pointed out that the Marcellus mainly runs under the most rural, economically deprived areas of the state — areas that have mostly been losing population in recent years as young people leave in pursuit of greater economic opportunity.

Estimated to be the second largest gas field in the world, Marcellus extraction is likely to change that as it develops throughout the Commonwealth.

Development brings with it approximately $2 million per well for landowners, but the real money comes from  gas development companies bringing in their workers, who need places to eat, sleep and play when they’re not working, as well as all the various goods and services companies need to do the work.

“It’s big money, and it’s big money relatively quickly, but there are arguments about how long it will last. At some point, the gas will go away. The question is, what are we doing now to prepare for after the play?”

Maximizing the amount of money that remains in the community is important, Kelsey says, but maximizing the effect those dollars have on the community is absolutely critical to what happens when the gas dries up.

“It’s very difficult to get good, reliable  statistics about what the effects gas extraction has on a community,” Kelsey said, “There is a huge amount of uncertainty about it. Often what you have is anecdotes fighting anecdotes. Its hard to get a good picture of what’s going on because each community responds to different things in different ways and the industry is just so new that there really isn’t a lot of good data yet.”

This is changing as production wells increase throughout the state, Kelsey said, and a lot can be learned from the communities already exploiting their gas reserves. However, since gas extraction is so new to the region, for long-term data one has to look at places that have already been through the boom-town phenomenon.

Looking into the experiences of places such as Bradford County — which has more wells in production than any other county in the state — reveals no clear answers to questions about the impacts of the gas business.

For sure, there are positive financial impacts, but they are only as positive as the community makes them; and there are also a lot of negatives, such as a ten-fold increase in heavy truck traffic, dramatically higher rents and lack of housing availability, more demand on social services and greater social conflict.

A lot of information exists about the long-term effects of emergent — and temporary — industries on the communities that hosted them, Kelsey says, but again there are no clear answers.

“Many communities are no better off after the boom,” Kelsey said, “Some are worse, and some are better. It depends on the community. If there is strong local leadership, effective communication and a proactive effort to maximize the potential benefits and minimize the potential costs for the long run, especially after production has finished, the rewards can be great. Not doing those things now — during the drilling phase — can have disastrous effects down the road.”