From this morning's PressConnects.com.
Economic study on gas drilling is full of holes
By Jannette M. Barth • November 18, 2010, 12:00 am
Jannette M. Barth, Ph.D., President of J.M. Barth & Associates, Inc., an economic research and consulting firm, has worked in the fields of economic analysis and econometric modeling and forecasting for over 35 years. She received her B.A. from Johns Hopkins University and her M.A. and Ph.D. from the University of Maryland. Several of her former positions include Chief Economist, New York Metropolitan Transportation Authority and Consultant and Account Manager, Chase Econometrics/Interactive Data Corporation. Dr. Barth has also taught various economics courses at both the undergraduate and graduate levels. She resides in the Town of Hancock in Delaware County.
In her opinion piece "County gas lease deal is good for taxpayers," Broome County Executive Barbara Fiala states that "regardless of the number of wells, there will be a positive local economic impact."
Fiala bases her conclusion on an economic study that is severely flawed. It neglects a number of crucial factors that must be taken into account if Broome County is to make sound decisions based on an accurate assessment of the facts.
* It is not clear that jobs will go to Broome County (or even New York) residents. Reports from Pennsylvania indicate that 70 percent of gas-rig jobs are going to people from out of state who are often transient, non- permanent workers, sending their earnings to their families to spend in their home states.
* There is no mention of the enormous cost of repairing roads and bridges that will be damaged by heavy equipment and the hundreds of tanker trucks that are required to haul water and wastewater to and from every well site.
* The analysis does not address the cost of mitigating environmental damage, such as drinking water contamination and fish kill. There is evidence of both in Pennsylvania.
* The study fails to consider that communities will probably be forced to increase their spending on emergency medical care, first responders and law enforcement. Local hospitals and fire departments may be ill equipped to handle industrial accidents involving heavy machinery and toxic chemicals. Drilling operations typically involve large numbers of transient workers, who may not have proper regard for the protection or betterment of the community.
* The study makes no mention of the economic costs of potentially severe health impacts such as cancer, brain damage, respiratory disease and endocrine disruption that have been connected to chemicals used in the hydraulic fracturing process.
* The study seems to assume that property values will increase; in fact they may decrease. In Wise County, Texas, in the Barnett Shale, it has been reported that real estate appraisers have discounted valuations by 75 percent if a property has a gas well.
* Declines in other industries are not reflected in the economic study. The negative effect on natural beauty and the environment will be sure to hurt the tourism industry; fishermen and hunters will be much less likely to settle on Broome County as a destination.
* The study focuses on just a 10-year period. But what happens after those 10 years? Will all the gas and the gas money be gone? Will the land and water be left polluted? Will the population be ill?
* Other studies have concluded that regions that have encouragedextractive industries experiencerelatively high poverty and unemployment rates in the long term.
I encourage Fiala to protect the people, the environment and the economy of Broome County by being sure to consider all potential effects prior to supporting a county gas lease.