The political momentum in America is turning the tide against development of the Marcellus Shale in the Keystone state.
Pennsylvanian Governor Tom Corbett is facing a tough reelection in the November midterms. The Washington Post indicated that Governor Corbett is most likely to lose in the gubernatorial race this coming fall.
Tom Wolf, a businessman from the town of York, just won the Democratic primary. Wolf is widely backed by environmentalists in the state for running on a platform to impose a new severance tax on the hydraulic fracturing industry in Pennsylvania.
The swing state sits atop the Marcellus Shale, a 104,000 square mile state-spanning region, which contains natural gas. The energy sector has brought a surge in business in the Appalachian region since 2007. As the demand for liquefied natural gas (LNG) increases, the state has had to reconfigure its pipelines to keep up with the need to export LNG flow to the south.
Range Resources Corporation, an oil and gas exploration and production company has gone from operating relatively unnoticed in states like Texas and Oklahoma to constantly being in the spotlight in Pennsylvania.
Range has had a history of violations, including two recent leaks in the state, one in Lycoming County, for which it was fined $75,000 by the Pennsylvania Department of Environmental Protection (DEP), and the other in Washington County last April. Range is working with consultants to remediate the sites.
WQED, a Pittsburgh public television station, noted how the media coverage of the issue of developing the Marcellus Shale has caused the industry to adapt its public relations image in Pennsylvania.
Pennsylvania faces deficit, turns to fracking
As other states are bouncing back from the recession, Pennsylvania is still facing a $1 billion budget deficit. Furthermore, for four years, the Scranton/Wilkes-Barre metro region has the state’s highest unemployment rate. This is despite the fact that the energy industry is expanding into the northern tier of Pennsylvania.
To fix this, Tom Wolf has promoted his severance tax plan saying that the development of the hydraulic fracturing industry would “make our commonwealth the Saudi Arabia of natural gas and, if managed correctly, transform our economy.” Pennsylvania is the one of the last energy rich states without such a tax.
Governor Corbett has other plans. He recently announced the end of the ban on LNG drilling in state parks and forests. He is anticipating that it will bring in $75 million to help reduce the state’s deficit. The Marcellus Shale Coalition, which backs Governor Corbett, organized a pro-fracking rally in the state capital of Harrisburg on May 6th.
At the rally many people from the state’s private energy sector voiced their concerns that the industry is being unfairly targeted. Ed Valentas, a manager with the Monroeville-based gas exploration company Huntley & Huntley, explained how the region is benefiting: “This is—to Pittsburgh anyway—the steel industry on steroids. We need this.” An estimated 30,000 people work in the energy sector in Pennsylvania.
On the national level, the republicans have doubled down their campaign on coal and gas, causing the democrats to tread carefully. Decisions on politically sensitive issues such as the Keystone XL pipeline continue to be postponed by the Obama Administration as the Democratic Party tries to find their footing ahead of the midterm elections. The contentious debate on development of the Marcellus Shale will be key in Pennsylvanian politics.