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Learning Lessons from Gas Drilling's Boom, Bust

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Friday, July 1, 2016   

HARRISBURG, Pa. – Pennsylvania gets poor grades for its response to the boom in shale gas drilling, but a pair of new reports could help communities prepare for the future.

The Multi-State Shale Research Collaborative, a partnership of Pennsylvania, Ohio and West Virginia, has issued a report card on shale gas policies, as well as a guide to help local governments facing gas drilling.

Jan Jarrett, a consultant to the Pennsylvania Budget and Policy Center, says right now there's a lull in the rapid expansion of drilling activity, but industry experts expect another boom when prices go back up.

As Jarrett put it, "Municipalities can stand back and say, 'OK, what can we do the next time it comes around? We know what it's going to be like, so how can we best prepare for that in the future?'"

On the state level, Pennsylvania got failing grades for its lack of an effective natural gas property-tax policy and its failure to mitigate the effects of the boom and bust on local communities.

As Jarrett points out, those fluctuations have left several communities in the state struggling to adjust.

"Where once there was lots of economic activity, new hotels built, lots of business at local restaurants, now all of a sudden, you see some experiencing real slumps," she said.

In contrast, West Virginia, which has both severance and property taxes on gas drillers, has created a fund to help communities deal with boom and bust cycles.

There are many questions about the future of shale gas drilling, but Jarrett says these reports will allow policy makers to take the best ideas from neighboring states and implement them in their own.

"That way, we can make sure that there's an even playing field across the three states to avoid a race to the bottom in terms of how the states are managing the impacts of drilling," Jarrett said.

The reports focus only on social and economic issues, and do not address the states' environmental or public-health policies.



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