If Not Natural Gas, Then What’s the Solution in Elmira?
New York’s unemployment data was released this week and, unsurprising for many, the number of people unable to find work in Upstate New York is on the rise. On the heels of this news opponents of natural gas in Elmira, where the unemployment rate is a staggering 10.5 percent, asked the City Council to oppose development. Did they offer any alternative solutions for economic revival? Of course not.
The news out of New York this week was not good as for the second year in a row no area of the state saw a decrease in its unemployment rate. As a result, the state has an 8.2 percent unemployment rate – a rate above the national average – and making matters worse there are currently 35 counties with an unemployment rate above 10 percent. It goes without saying that many of these higher unemployment rates are located in areas of upstate that could benefit from natural gas development.
Among localities with high unemployment rates, the City of Elmira had one of the state’s sharpest increases. With little other options the city’s employment prospects could be significantly improved by allowing natural gas development to proceed. However, shortly after the dismal economic news was released the group, Elmirans and Friends Against Fracking, asked Elmira City Council not to support natural gas development. One member was even quoted saying he fears the “economic devastation” taking place in “many communities” where natural gas development has occurred.
The Journal News out of the Hudson Valley spelled out the situation in Elmira pretty clearly:
The unemployment rate increases for some regions of the state were stark. The unemployment rate in the Elmira area increased from 8.8 percent in January 2012 to 10.5 percent last month.
The area had an economic boom after hydraulic fracturing occurred across the border in Pennsylvania, but it has been stung by a slow down in drilling, no decision by Gov. Andrew Cuomo on whether to proceed in New York with fracking and the closure of Sikorsky Aircraft Corp. last December, which axed 570 jobs.
So, you have a community where businesses are closing their doors and laying off workers, and where, realistically, the town can only be described as economically depressed. Some might even say it’s experiencing “economic devastation.” At this point Elmira doesn’t seem to have made it on the radar for “New York is Open for Business” campaign, so what options do residents there have to find meaningful well-paying jobs?
Some have been forced to head for the unemployment line while others have sought employment in Pennsylvania where jobs are plentiful thanks to the natural gas industry. The fact that it’s easier for New Yorkers to find jobs in Pennsylvania than their own state should likely be a wake-up call for Governor Cuomo.
However, as the Governor continues to dither economic stagnation continues in the Empire State. This contrast in economic activity between Pennsylvania and New York has led some to declare the border represents a modern version of the Berlin Wall. However, instead of blocking the advance of communism, this wall is keeping economic activity out of New York State.
“The Pennsylvania-New York border is the ‘Berlin Wall,’” Karen Moreau, executive director of the New York State Petroleum Council, told The Daily Caller News Foundation. “Pennsylvania is West Berlin, and New York is East Berlin.”
“What’s happening in New York is just a continued decline in the economy of the Southern Tier. Those are the counties right along the border with Pennsylvania,” said Moreau. “Literally, people can stand there on the New York side and look just across the political border and see all this prosperity.”
As New York’s economy flounders other areas of the country allowing natural gas development are seeing jobs flourish. In Pennsylvania, Marcellus Shale development is directly supporting more than 30,000 jobs in the state. These jobs pay $89,116 per year, which exceeds the average compensation of all other Pennsylvania industries by $41,000 according to state data. According to the 2010 Census, this even exceeds the Keystone State’s average household income of $51,651. Indirectly, natural gas development is providing employment to over 230,000 Pennsylvanians according to state data.
The stark difference between Pennsylvania and New York becomes even clearer when you examine cities in the Keystone State that are similar to Elmira. Take for example, Williamsport, Pennsylvania. Like Elmira, this medium sized Pennsylvania city boasts 29,000 residents and had been beset by economic challenges for years. However, since Marcellus Shale development began the city has seen rapid growth and was the seventh fastest growing metropolitan area in the country in 2010, according to figures released by the U.S. Bureau of Economic Analysis.
“We have a 7.8-percent growth rate the numbers are obvious. The driving rate is the Marcellus Shale. Without the Marcellus Shale, any growth would be a lot lower.” – Vince Matteo, chamber president and CEO
Further west in North Dakota the state is literally experiencing full employment thanks to prospects provided by development of the Bakken Shale. In other producing states the unemployment rate is below the national average as well thanks, in part, to the economic activity shale development has provided. Colorado has a 7.5 percent unemployment rate, Ohio has a 6.7 percent unemployment rate and Texas enjoys a 6.2 percent unemployment rate.
These states are not alone in experiencing a significant economic uptick thanks to natural gas development. In fact, the natural gas industry provided $545 billion to the U.S. economy in the form of capital expenditures, wages and dividend payments in 2011.
Meanwhile, New York can’t seem to produce enough jobs for its residents while it keeps the door to shale development firmly shut. The natural gas industry is not only ready to provide jobs for New Yorkers, but most importantly its ready to deliver good paying jobs. Jobs in the natural gas industry, in fact, pay an average of $89,116 per year in Pennsylvania. The industry, incredibly, pays $41,000 more on average than any other industry in Pennsylvania.
It’s hard to imagine anything better, yet New York State continues to dawdle as if it had some other choice. If not natural gas, then what? The silence is deafening and we can only hope it reverberates all the way to Albany.