Blog Post

Exploring Shale's Financial Impact in Northeast Pennsylvania

Oct 4, 2013 | Daniel Raimi

Fall is a beautiful time of year in northern Pennsylvania — my second of 12 planned trips to key shale regions — as trees turn to deep oranges, reds and purples before shedding their leaves. Throughout the rural communities of Bradford, Lycoming, Tioga and Susquehanna counties, evidence of the natural gas industry comes in the form of equipment rental and oilfield service companies lining the two-lane highways, a steady flow of 16-wheel trucks hauling water and construction materials, and heavy-duty pickup trucks moving workers to and from well pads. Occasionally a water impoundment, drilling rig, or compressor station appears on the horizon, presenting an even more direct sign of drilling activity.

A sign outside a small church along Route 6 in Sylvania, Pa.

Northeastern Pennsylvania has seen more natural gas development than any other part of the Marcellus shale formation. Starting in the late 2000s, natural gas developers have made these four counties some of the most heavily explored regions on the East Coast. Although new development slowed in the past two years as natural gas prices declined, production continues to increase as a smaller number of new wells are drilled and previously drilled wells are connected to pipelines.

Natural gas production in four counties.

In most counties and townships where I interviewed local officials, views of the local government impacts of Marcellus development were positive. Counties and townships have seen significant new revenues from a variety of sources, including Pennsylvania’s “Impact Fee,” revenue from leased public lands, and — to a lesser extent — increased revenues from taxes and fees. They have also seen some increases in costs from required road maintenance and increased demand for other services, though these new costs have tended to be less than the new revenues associated with natural gas development. Additionally, gas and pipeline companies operating in the area have typically taken up the task of repairing and often upgrading the local roads they use. It will be interesting to see whether future trips reinforce these impressions, reveal different dimensions or contrast.

The autumn view from a rural road in Tioga County, Pa.

Although some reporting on natural gas activity in this region focuses on concerns of industrializing a rural landscape, my week of travels in northeastern Pennsylvania provided a less dramatic impression of the footprint of the natural gas industry. While signs of the industry are unmistakable — the trucks, service companies, and drilling rigs — the region as a whole continues to be beautiful, especially on a clear fall day.

This research was carried out at the Duke University Energy Initiative with support from the Alfred P. Sloan Foundation.