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In a recent story titled, "Marcellus Shale Coalition President Assesses State of Gas Industry", The Sun-Gazette reported that, "While the MSC is based in Pittsburgh its ties and economic benefits for the county and its operators are unquestionable."
Actually, the economic benefits Lycoming County derives from the shale gas industry aren't just questionable, they are at best meager and may not even offset the damage the industry does done to quality of life in the county.
The only measure by which Lycoming County is prospering since the start of the shale gas boom is that its gross domestic product has grown almost 24% faster than state GDP. The problem is that no one gets paid in "GDP" and almost all of the income from the GDP growth gas has generated has landed in places other than Lycoming County. This is made clear by a welter of statistics.
Since the beginning of the shale gas boom, jobs in Pennsylvania have increased by 7%, but in Lycoming County, they have fallen by 4.7%. Incomes in PA have grown by 77% but only by 69% in Lycoming County. And, while Pennsylvania's population has grown by 3.7%, Lycoming's population has declined by 2.5%.
Far from countering these trends, the shale gas industry is contributing to them. In 2019, the gas industry employed over 30,000 people in Pennsylvania. By last year, that figure had fallen by almost half to just over 16,000. Industry wages similarly plunged. But in no respect are claims that the shale gas industry is of great benefit to Pennsylvania more exaggerated than when it comes to the subject of taxes.
In Pennsylvania, unlike for other businesses and unlike in other states, the gas industry is exempt from property taxes, which means other taxpayers must make up the industry's share. And the taxes the industry does pay under Pennsylvania's Act 13 Impact Fee are scandalously low.
In a misguided effort to encourage gas production, Pennsylvania chose not to enact a severance tax as nearly all other major gas-producing states have done and, instead, imposed an impact fee whose effective rate is only half that of neighboring West Virginia's severance tax and less that one-fifth that of Texas'.
The terrible irony is that, despite exempting gas from property taxes and imposing a paltry impact fee, production in Pennsylvania has risen only slightly in the last five years, while in more heavily taxed West Virginia it has been growing rapidly.
Finally, it should be noted that the gas industry's failures to contribute to prosperity aren't confined to Lycoming County. Recent Ohio River Valley Institute studies have found that, since the start of the region's natural gas boom, collectively, the 30 counties in Ohio, Pennsylvania, and West Virginia that produce 95% of all northeast natural gas have, like Lycoming County, experienced net losses of jobs and population and anemic income growth.
In summary, Pennsylvania derives shockingly little value from its shale gas industry and sees few benefits in the forms of jobs, income, and wages. That's why it is bewildering that industry spokespersons, such as the president of the Marcellus Shale Coalition, are able to have absurd claims, such as that the industry "supports" 120,000 jobs in Pennsylvania, uncritically reported.
Claimed economic benefits of the shale gas industry for Lycoming County and Pennsylvania aren't "unquestionable" as the Sun-Gazette story claimed. They're just unquestioned.
For a complete analysis of the economic impacts of the shale gas industry in Pennsylvania, see "Shale Gas in Pennsylvania: 2026. The Illusion of Shale Gas as An Engine of Economic Prosperity" at the Ohio River Valley Institute.
Sean O'Leary is a senior researcher at The Ohio River Valley Institute.