Full Title: Misplaced Faith: How Policymakers’ Belief in Natural Gas is Driving Rural Pennsylvania Into an Economic Dead End
Author(s): Sean O’Leary
Publisher(s): Ohio River Valley Institute
Publication Date: August 8, 2022
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Description (excerpt):
It is nearly an article of faith in Pennsylvania politics that the Appalachian natural gas boom has been at best an economic miracle and at worst a fortuitous backstop that stemmed the losses of jobs and population that have plagued the region over the past two decades. This belief has led local and state policymakers to confer on the natural gas industry and related industries a remarkable array of subsidies and forms of regulatory relief designed to encourage greater development, more production, and, the sponsors hope, growth in employment and income.
A corollary to this almost unanimous belief in the economic urgency of natural gas development is an avoidance or outright denial of federal government economic data that run counter to the belief. In February 2021, the Ohio River Valley Institute released a report documenting the natural gas industry’s meager effects on job, income, and population growth in the twenty-two Ohio, Pennsylvania, and West Virginia counties that produce over 90% of the region’s output. Reaction to the report was immediate and intense.
But would employment and population performance have been worse had it not been for the natural gas boom? As it happens, Pennsylvania offers a unique set of circumstances that make it possible to test the proposition. This report compares the economic evolution of two sets of counties in Pennsylvania whose economic trajectories prior to the natural gas boom were almost indistinguishable. In one of the county groupings, the natural gas industry grew from having a negligible presence prior to the boom to become the leading source of economic output (GDP). While, in the other set of counties, the industry’s presence remained negligible. That these counties happen to be rural is also significant in that nationally rural areas of the country have struggled economically and suffered from population loss.