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mailmanGetting the straight, untwisted facts concerning any aspect of “fracking” is very difficult. However, the “anti-fracking” element seems particularly adept at emotional rather than factual presentations that are half truths. Since my background is finance, I was particularly interested in Jannette Barth’s study on the economic impact of Marcellus Shale. In her study and at anti-fracking meetings Barth states, “Studies used to support the claim that drilling will bring economic benefits to New York are either biased, dated, (or) seriously flawed.”

Then, she produces a study that is, “biased, dated and seriously flawed”.

Barth compares gas’s economic impact in NY’s top 10 gas producing counties to neighboring NON gas producing counties. She unequivocally concludes that ‘gas counties’ are not doing better economically than neighboring counties. But gas jobs and payroll in “gas counties” make up less than 4/10s of 1% (.004) of the counties jobs & payroll. Her conclusion can certainly be described as seriously flawed, based on the insignificant difference between the counties.

Barth dismisses gas drilling’s Economic Multiplier of 1.4. (Every payroll has .40 impact on the local economy.) She concludes that, “On economic impact alone, gas drilling should not necessarily be encouraged…it would appear to make more sense to encourage an alternative industry that would provide a greater economic impact…such as tourism.” (Barth never gives an economic multiplier for tourism. The highest I found was 1.67.) Barth ignores that there has to be at least two parts to a multiplication equation; in this case, the average salary to be multiplied. Since Barth’s paper, the Ithaca Journal has published two studies comparing average salaries. Hospitality (Tourism) has average salaries of about ,000 while all others than Agriculture were over ,000. To just equal the impact of gas, Tourism would need an Economic Multiplier of 2.8!

On rural environments, Barth states, “Unfortunately, it is difficult to assign precise monetary values to aesthetic benefits.” (Of course, it is difficult to value aesthetics, primarily because someone else usually owns it! But the anti gassers don’t want someone else’s property rights to interfere with their aesthetics.)

Throughout, Barth uses possibilities in a way that can be described: it’s a fact that it’s a possibility. A few examples:

Barth states, “It is possible that local land owners who get rich from natural gas will move to Florida or other points south, taking their new found wealth with them”. (She ignores that it’s also possible they might not move! And even if half moved, the half that stayed would be pumping NEW MONEY into the local and state economy.)

Due to negative economic issues, Barth states that, “It is quite possible that…existing homeowners may be driven out”. (That they might also stay, due to positive economic issues, isn’t mentioned.)

“To some extent, gas drilling and other industries (tourism, sport fishing and hunting) may be mutually exclusive.” (Or maybe not?)

“Far fewer retirees will choose to settle and second home owners would certainly be vastly reduced in numbers.” (Based on what study of occurrences that have not yet occurred?)

Barth quotes a study by Headwater Economics, which compared western U.S. counties that focused on fossil fuel extraction as an economic development strategy to counties that did not focus on such industries. Barth quotes, “While energy focused counties race forward and then falter, non energy peer counties continue to grow steadily.” Other Headwater studies give a more complete description of their research, “Energy producing states outperformed their peers fiscally at the start of the recession, but ultimately the decline in fossil fuel prices and reduced revenue exposed (them) to the impacts of the recession.” Headwater also said, “Predominantly rural areas with high levels of drilling and limited economic diversity may be the most overwhelmed by the buildup phase of the energy boom, but also are the places that ultimately may see the greatest long term fiscal gain from energy development.” Further, Headwater states, “The tax revenue from fossil fuel extraction is the longest lasting legacy of fossil fuel development…it continues to accrue.” On green energy, Headwater praises, “Colorado made energy revenue funding available for regional clean energy initiatives. …the funding helped launch an effort that has grown businesses and jobs and has funded clean energy infrastructure”.

One of four studies that Barth trashes is a Penn State study. Of it she says, “An intelligent lawmaker should not take this study seriously”. I would suggest, after having read her study, that anyone with a room temperature IQ should not take her study seriously.

Tom Reynolds
Newfield, NY

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