Shale Royalties Driving Growth In PA

In June of 2012, an IHS CERA study found shale and tight gas development will contribute nearly $50 billion in federal, state, and local government revenue by 2015. A report this week by the Associated Press shows we are already well on our way.

Natural gas royalties are changing people’s lives for the better, providing new forms of income for thousands who were previously struggling just to make ends meet.  And while many states have seen the benefits of energy royalties and investments for decades – states like Texas and Alaska, for example – private sector investment in shale development is catalyzing economic growth in some communities that haven’t seen anything like it before.

Take Range Resources: The company has over the past few years contributed more than $1 billion to Pennsylvania landowners, the majority coming after the financial downturn of 2008 when many across the nation feared what the future might bring to their own economic livelihoods. Now, in 2012 alone, the state of Pennsylvania is estimated to have received about $1.2 billion in total royalty payments from natural gas development, money flowing straight into schools and hospitals, dairy farms and family businesses.

Shawn Georgetti, a farmer from Avella, PA, described what the new income provided for him and his family to the Associated Press:

“‘We used to have to put stuff on credit cards. It was basically living from paycheck to paycheck,’ said Shawn Georgetti, who runs a family dairy farm in Avella, about 30 miles southwest of Pittsburgh….Before Range Resources drilled a well on the family property in 2012, Georgetti said, he was stuck using 30-year-old equipment, with no way to upgrade without going seriously into debt.

“‘You don’t have that problem anymore. It’s a lot more fun to farm,’ Georgetti said, since he has been able to buy newer equipment that’s bigger, faster and more fuel-efficient. The drilling hasn’t caused any problems for the farm, he said.”

And royalties aren’t the only investments to speak of. Just this week, Cabot Oil & Gas Corporation announced the completion of its successful community-based campaign: The Cabot / EMHS Community Match Fund.  After the community struggle to raise funds for over four years, Cabot stepped up to provide financial support for the 55 year-old hospital and the community.  By working with the private sector, local government, and community members, the effort helped raise over $4.4 million for the construction of a new state-of-the-art health care facility in Susquehanna County. This not only does this mean jobs, but the other closest hospital is about an hour away, meaning the continued operation (and expansion) of this particular facility is incredibly important to the local community.

The new facility will have 25 rooms, a new emergency room, an outpatient facility, an intensive care unit, and more. As Ruth Wilmarth of Brooklyn, PA described the project, “this is going to be monumental, it’s the biggest project our County has ever seen, it’s sorely needed.”

Real investments with real benefits for communities, all made possible by American energy development.

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