May 14, 2014 By Susy Kelly, For The Greene County Messenger 6 min read

A recently released study by a non-partisan research organization explores the impact Marcellus Shale activity has had in Greene County, calling the cumulative effect of the boom experienced in the last decade “overwhelming.”

The study, conducted by the Multi-State Shale Research Collaborative, looked at other areas affected by the gas industry, including Tioga County in northeast Pennsylvania and counties in Ohio and West Virginia, by way of interviewing local leaders and elected officials. A set of conclusions and recommendations was provided for each county based on the research.

“Greene County’s experience with unconventional gas drilling has much in common with other high development communities but is also somewhat unique,” the study states. “The county has long been a poster child for the ‘resource curse,’ highly dependent on coal and gas extraction with higher poverty and lower income than the state as a whole.”

Still, the researchers reached some positive conclusions regarding Greene County. For example, as a result of one-time signing bonuses and ongoing royalty payments, income rose. They also found that there was a 40 percent growth in private-sector employment between 2005 and 2012, the highest growth by far in the region.

However, they found that drilling activity is “particularly hard on the poor” who already struggle to pay for housing and have not benefited from employment or royalty income.

“Drilling activity has brought with it increased demand for a range of social services, for the poor and for drilling families, yet human service funding has not been identified as a high priority use for impact fee dollars,” the researchers determined.

The study found that an influx of out-of-state oil and gas workers drove up rents and further exacerbated an already existing housing shortage in the county. Also, the shortage of affordable housing led to children being split from parents and higher demand for foster care services, the research indicated.

Greene County’s high school drop out rate rose above the statewide average during the height of the gas boom, which the researchers estimated to be from 2009 to 2012. Crime increased in conjunction with drilling, and emergency room visits to the county’s only hospital increased by more than 50 percent from the first part of the 2000s to 2010-12, the study noted.

An increase in heavy truck traffic associated with the oil and gas boom deteriorated roads, increased noise, safety concerns and repair costs, the research determined.

“Costs are high for repair, enforcement and traffic safety, and should be borne by industry rather than local or state taxpayers,” according to the study.

According to interviews they conducted with the Harry Enstrom Chapter of the Izaak Walton League, which is a conservation group that supports the economic development of drilling but seeks to protect the environment, there were reported health concerns due to water contamination.

“Some members said their well water was once clean but is now undrinkable due to contamination or cracked well casings,” the study noted.

The study also discovered that Greene County landowners found that the money they expected to earn on the wells they leased didn’t match what they actually received.

“Recent reports indicate that some oil and gas companies are deducting transportation and processing costs from royalty payments, and using complicated formulas and accounting to avoid paying the full royalties they owe,” the research revealed. Furthermore, prices per acre varied from one contract to the next, causing divisiveness among landowners.

The study suggests that the way to maintain control over change is to stay ahead of it rather than reacting to it as it happens.

“For areas yet to experience a shale extraction boom, a clear lesson from Greene County is that more must be done by states and localities to prepare and respond better – to anticipate impacts, to have tools in place to avoid or mitigate impacts, to receive advanced and regular information from drillers on their plans, and to access resources to address infrastructure and human service needs in a predictable and timely way,” the researchers found.

“Both county and municipal governments lacked tools necessary to get a handle on, much less get out in front of, drilling-related impacts,” the study stated.

Act 13 set up an impact fee system, unlike the extraction or severance tax imposed on gas companies in other states, to mitigate the costs borne by counties and municipalities as drilling activity increased.

The study found that 55 percent of Greene County’s impact fee money was spent on roads, bridges, and public infrastructure, 22 percent was spent on emergency services, 19 percent was spent on social services, and 3 percent was spent on records management.

“Pennsylvania is the only mineral-rich state that does not have a severance tax and is losing out on needed revenue,” the research stated. “By 2019-20, a 4 percent natural gas severance tax could generate nearly three times as much money as the current impact fee.”

Funding could support better enforcement of environmental regulations and economic development, and provide additional funds to local governments coping with drilling-related impacts, the researchers suggested.

The study found that nearly 40 percent of Greene County’s municipalities lacked zoning ordinances specific to drilling, and the researchers concluded that there’s room for improvement.

“The Pennsylvania Supreme Court decision invalidating Act 13’s prohibition against local zoning controls offers an important opportunity for local governments to regain some control – by adopting, for example, local zoning ordinances making drilling a conditional rather than permitted use in residentially zoned areas,” they suggested. In addition to addressing well-siting and drilling issues, the study indicated municipal and county zoning entities should look at the permitting of the RV camps that tend to accompany increased Marcellus development activity.

The study concluded that the gas industry, like the coal industry before it, promises an economic boon, but the benefits can’t be realized over a longer term unless proper planning takes place to ensure that the boom isn’t followed inevitably by a bust.

“The county’s history of extraction has left behind a legacy of environmental damage and poverty. Acknowledging its promising economic beginning, the growth in shale gas development makes the county more dependent on resource extraction, and vulnerable to a decline as swift as its rise.”