By Sharon Ward, Third and State
Former Governor Ed Rendell got into some hot water last week with an op-ed in the New York Daily News touting the economic benefits of hydrofracking. ProPublica quickly outed the Governor for his ties to the drilling industry, and Rendell owned up to the fact that he is a consultant to Element Partners, which has investments in the gas industry. The Daily News has added a note to its web site disclosing the financial arrangement.
Rendell’s piece touts the industry’s economic benefits, repeating the claims of an IHS/U.S. Chamber of Commerce analysis that the Pennsylvania Budget and Policy Center critiqued back in December for overstating the employment and tax benefits of shale.
The natural gas industry in Pennsylvania is like a new baby: it’s tiny but gets all the attention. Through a coordinated and well-financed public relations effort (remember My Range Resources?) and a legion of lobbyists, the industry has given an impression of its importance that just doesn’t square with the facts.
In 2012, the natural gas industry provided one-half of one percent of all jobs in Pennsylvania. The IHS report claims the industry contributed $900 million in state and local corporate tax revenue, one-third of all corporate taxes collected by the state in 2012, but the Department of Revenue puts the number at less than one-fifth of that amount (see Table 2).
Don Gilliland of The Patriot-News made a similar point in a column after a Chamber of Commerce event in Harrisburg in July, announcing a multi-million dollar “Shale Works for Us” public relations campaign. Gilliland ripped into the industry for stating — in a promotional effort the sponsors claimed was designed to “get out the facts” — that shale created 140,000 jobs in 2010 alone, while the Pennsylvania Department of Labor and Industry reported just 23,618 shale jobs since 2008. (The Chamber numbers came from the infamous “Penn State” study that Penn State subsequently disowned — see here and here).
So why does this matter? The industry cleverly uses this economic promise to beat back regulation or any other attempt to limit or manage natural gas development. Gilliland cleverly gets the chamber spokeswoman Karen Harbert on record about its strategy, to use its PR effort to “ensure no hindrance or regulatory barriers” to natural gas drillers.
Rendell urges New York Governor Andrew Cuomo to seize the opportunity that gas drilling provides, but Cuomo should use Pennsylvania as a cautionary tale rather than a guide. The economic benefits of gas development in Pennsylvania have been routinely overstated, while its costs have been minimized or ignored. The hype has only served to undermine reasonable environmental and land use restrictions necessary to blunt the short-term impacts and limit long-term harm.