Review of The Institute for Public Policy and Economic Development’s “A Review of Changes in Selected Economic & Demographic Indicators in Particular Counties in the Barnett, Fayetteville, and Marcellus Shale Play,” by Kyle DeShong and Melissa Hughes.
This study is not a traditional economic impact study. A traditional study would attempt to determine the economic impact of a certain entity on the local area by determining what activity was directly attributable to the entity. Then, it would apply a multiplier to quantify the indirect and induced effects of that money as it circulates through the economy. However, this study states that, “This report uses secondary data from federal, private, state, and non-profit sources. The report is limited to an explanation of the data and trends… no claim is made that natural gas drilling is the complete and sole reason for economic growth in any region.” This study essentially finds three regions that were affected by shale production and presents data and figures pertaining to those areas’ population, average household income, median income, and unemployment from 1990 to 2010. Based on what happened in those areas, the study attempts to analyze the potential for economic growth in Pennsylvania’s 10th Congressional District as a result of Marcellus Shale development.
All things considered, this means that the real issue in this study is whether or not the example regions are realistic comparisons to Pennsylvania’s 10th Congressional District. The three regions that this study examined were Denton County, Texas; Faulkner County, Arkansas; and White County, Arkansas. All three counties carry certain similarities to PA’s 10th Congressional District, but also have some important differences of note.
Denton County, Texas is extremely similar in size to the district that this study is examining. Both areas are populated by about 600,000 people. However, Denton County is a county in the Dallas/Fort Worth Metropolitan area. So, the county would likely be much more susceptible to factors outside of shale drilling. Both Dallas and Fort Worth are major cities that bring in a variety of other economic factors. They note that all three counties have weathered the economic crisis with lower unemployment rates than national average.
The conclusion is that there are “considerable possibilities for growth within Pennsylvania’s 10th Congressional District, and some counties have already begun to see some of the effects of the Marcellus Shale drilling.” This seems to be a reasonable conclusion. While there are slight differences between the counties observed in the study and 10th Congressional District, one of the counties comprises a similar population and the other two are in similarly rural areas. So, if growth occurred in these areas, it seems reasonable to conclude that the same will likely occur in PA’s 10th Congressional District and that the economic growth that has already occurred can be attributed, at least in part, to the development of the Marcellus Shale.