Economic impact mostly focuses on job growth in the affected areas. The highest estimates of job growth in Pennsylvania are 44,098 direct, indirect, and induced jobs related to the fracking industry were created in 2009, and 139,889 in 2010. However, others estimate numbers that are much lower; citing only 23,884 jobs created in 2009. Although jobs are created, evidence shows that most of the well site jobs are sourced to nonresidents. Some jobs in support of drilling activity, such as in lodging, food, entertainment, or retail, go to local residents. However, most high-paying jobs are given to workers from contract companies. Displacement of jobs also may spread to neighboring states, as is the case with Pennsylvania drilling. Even though drilling is confined to northern Pennsylvania counties, many of the economic benefits extend to the Southern Tier New York counties which have commercial facilities already in place.

Jobs are not the only indicator of economic changes, though. Some studies found that counties with high levels of Marcellus Shale activity experience increased wages and income, substantially increased non-wage income, such as with leasing and royalties, and greater levels of business activity. However, concerns have been raised about money not being distributed to the local economy. Instead, studies show that a large proportion of increased wages actually go to non-local workers, and that a significant portion of gas rights are owned by nonresidents.

As with any new technological developments, there exists a boom-bust cycle. During the period in which drill sites are being set up and drilling takes place, the area is considered to be in the “boom” stage. Landowners receive royalty payments, tax bases may expand, and more money is being put into the local economy. However, after some time, drill sites may begin to produce less than projected, and drilling efforts begin to decrease. At times, drilling starts up only to be shut down again. This is exactly what has been affecting Pennsylvania since 2012. Natural gas rigs in Pennsylvania were recorded at a high point in 2011 with 112 wells operating, but dropped to 51 active wells in 2013. After several years in the “boom” stage, wells and jobs begin to disappear, leaving areas with uncompleted or abandoned wells. After the “bust” stages start, it is not uncommon for populations of towns to drop, as well as experience a poorer economy as compared to before the extraction companies moved into the area. This is due, in part, to the number of people leaving the area once the fracking projects are finished. Therefore, there are less people spending money in the town than before.

Literature Cited

Finkel M. (2015). The Human and Environmental Impact of Fracking: How fracturing shale for gas affects us and our world. Praeger.