Don’t overthink the slump in 2013 of gas industry

The Multi-State Shale Research Collaborative studying the impact of Marcellus shale drilling over a five-state area that includes our region did not exactly give the industry rave reviews for 2013 in recently discussed findings. The collaborative of nonpartisan research organizations in New York, Pennsylvania, Ohio, Virginia and West Virginia confirmed what many had suspected 2013 was not a good year for the gas drilling industry.

According to a recent conference call discussion, activity was more bust than boom in 2013, though there were elements of success, with employment in Tioga County growing by 4.7 percent.

The collaborative found some negatives with the gas drilling presence, including housing shortages, some income limits, more children in foster care and a decline in the number of core students in the education system.

The foes of the gas industry will no doubt be heartened by this news. But we would ask objective people to think back a decade to where Pennsylvania was economically before the coming of the gas industry. We don’t think anyone should wish for a return to those days.

Industries related to energy tend to go through cycles and all indications are that the gas drilling industry is going to be here for generations. We suspect the industry is not going to leave behind million of dollars in capital expenditures that went into drilling of wells in our region. The collaborative did laud the use of impact fees in Pennsylvania as a means of taxing gas industry activity.

For those who want to tack on a severance tax, we would suggest now is probably not the best time to double-tax the industry. Contrary to what many of our state’s policymakers seem to believe, there is no shame in having a favorable tax climate for industry.