Reaching an agreement on a comprehensive Marcellus Shale oversight bill is essential to foster the industry’s growth, lower energy costs, provide environmental protections, generate revenue to address local impacts, and sustain and build on the economic opportunities — direct and indirect — that natural gas drilling is providing to Pennsylvanians.
Key to the success of such oversight is the adoption of uniform regulatory standards at the state level, which would provide drillers with a clear picture of the operating environment for this highly sophisticated industry.
This clarity is lacking. More than 115 municipalities have adopted more than 145 ordinances, including land-use limitations, road use restrictions, noise limits and well-setback requirements. Many are designed to ban drilling activity.
Local ordinance activity is increasing. Since Oct. 1, 27 municipalities in 11 counties have considered or adopted oil and gas industry regulations. Having been a government official in southeastern Pennsylvania for 10 years, I recognize the value of our local government system, which provides important services to communities and citizens.
But in my role at the Pennsylvania Chamber of Business and Industry, I have seen the adverse impact that multi-municipal jurisdictions can have, as well as the impact of inconsistent, arbitrary regulations. Job creators need a predictable operating climate. They want to know the rules and the potential costs.
It was this very uncertainty about proposed policies and regulations emanating from Washington, D.C., that led many employers to hold back on investing in their operations and workforce as the nation struggled to emerge from one of the worst recessions in recent memory.
Similarly, the confusion resulting from a hodgepodge of existing and emerging local ordinances, even if well intended, makes it difficult for drillers operating in multiple jurisdictions to be in compliance and to operate effectively and efficiently. And without uniform operating rules, competing states are marketing their more-competitive and predictable shale-producing climates to attract capital and jobs.
The Marcellus Shale industry is generating measurable economic benefits for areas of the state in which drilling is occurring. From March 2010 to March 2011, Washington County — home to the first Marcellus well — had the third-highest percent increase in employment in the nation, according to the U.S. Labor Department’s Bureau of Labor Statistics. Williamsport, according to the U.S. Commerce Department, was the seventh-fastest growing metropolitan area in the country in 2010.
In other areas of the commonwealth, economies are benefiting through ancillary business opportunities. In a recent series of Marcellus Shale forums hosted by the PA Chamber Education Foundation and chambers of commerce, attendees heard from companies, many that do not have their primary location in drilling regions, that are expanding their operations and hiring because of their support work for the industry.
Increased natural gas production is helping consumers by delivering cheaper natural gas, such as the recent rate cut of more than 13 percent announced in the area by UGI. But the longer the oversight debate drags on and the longer drillers face rules that differ from municipality to municipality, the less investment, energy savings, jobs and revenue will be realized in the commonwealth.
It is essential that industry oversight be done right and be done quickly. Companies involved in Marcellus Shale drilling here strive to make sure they are in compliance with laws and regulations; and citizens want assurances that companies are following the rules.
The best way to ensure both and enable the state to reap the greatest economic benefits from the industry is to adopt rules that are consistent throughout the commonwealth.
Gene Barr is president and CEO of the Pennsylvania Chamber of Business and Industry.