Fracking Our Way to Higher Incomes

A new report shows counties that embrace fracking see more money.

FILE - In this June 25, 2012 file photo, a crew works on a gas drilling rig at a well site for shale based natural gas in Zelienople, Pa. As the oil and gas drilling method known as hydraulic fracturing, or "fracking," mobilizes thousands around the country both for and against the process, industry and some environmental groups in Illinois have come together to draft regulations both sides could live with. Some hope that cooperative approach could be a model for other states.

If you're intrigued by the extraordinary success that states like North Dakota, Texas and Oklahoma are enjoying from the energy boom, then some summer reading might be in order. I have to warn you though; it's not light and breezy. Download a copy of "The Economic Effects of Hydrofracturing on Local Economies:  A Comparison of New York & Pennsylvania," written by Diana Furchtgott-Roth, a senior fellow with the Manhattan Institute for Policy Research, and Andrew Gray.  

It shows how smart choices can bring great financial benefit to rural communities. And it's timely too, because later this week President Obama is heading to western New York and Pennsylvania where he is scheduling a "bus tour" through those states to discuss the economy. It should be a nice chance to meet New Yorkers from that part of the state (a rarity, no doubt) and when he hears what they have to say wouldn't that be a win-win for everyone?

[See a collection of political cartoons on energy policy.]

If one of his staffers wants to give the president a snapshot of what's happening in the region, he or she will probably be grateful for the chance to share the following:

Using the Pennsylvania data to project hydrofracking's effect on New York counties, the Manhattan Institute study says that the income of residents in the 28 New York counties above the Marcellus Shale has the potential to expand by 15 percent or more over the next four years – if the state's moratorium is lifted.

There's a lot of reasons, apparently, why New York should perhaps follow Pennsylvania's lead and lift its self-imposed moratorium. Here are some of them: 

  • Pennsylvania counties with hydrofractured gas wells have performed better across economic indicators than those that have no wells.
    • The more wells a county contains, the better it performed.
      • Between 2007 and 2011, per-capita income rose by 19 percent in Pennsylvania counties with more than 200 wells, by 14 percent in counties with between 20 and 200 wells, and by 12 percent in counties with fewer than 20 wells.
        • In counties without any hydrofractured wells, income went up by only 8 percent.
          • Counties with the lowest per-capita incomes experienced the most rapid growth.
            • Counties with more than 200 wells added jobs at a 7 percent annual rate over the same time period.
              • Where there was no drilling, or only a few wells, the number of county jobs shrank by 3 percent.
              • [Read the U.S. News Debate: Is Fracking a Good Idea?]

                In western New York, residents wait and watch. They hope that Pennsylvanians near the border will spread the wealth. Perhaps President Obama can convince Gov. Andrew Cuomo, D-N.Y., that New Yorkers from places like Allegany, Cattaraugus, Chautaugua, Erie and Niagara Counties deserve their fair share too.

                Gregg Laskoski is a senior petroleum analyst for

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