Hydraulic fracturing—“fracking,” as it’s commonly called—isn’t a new technology, but the technique is still a newcomer to Pennsylvania. Using high-pressure fluid to break through layers of brittle shale rock underground releases pockets of natural gas. Although the extensive Marcellus Shale formation lies beneath much of the Commonwealth (and parts of other nearby states), until recent years it hasn’t been economically viable to extract these energy reserves.

But a look at any geological map will convince anyone that gas resources aren’t evenly distributed across Pennsylvania. Western Pennsylvania and the Northeast have substantial proven deposits, but the industrial cities of southeastern Pennsylvania are largely outside the shale zone. Experts are now wondering, “How can the economic opportunities offered by energy exploration be spread statewide?”

Question one: What is it you’re planning on sharing, exactly?

A recent article in The Legal Intelligencer explores the views of energy industry boosters. Fracking, they say, has the power to revive the economic and industrial roles of southeast Pennsylvania. Boosters believe that regional refineries, ports, and labor resources “could turn Philadelphia into an energy hub similar to Houston.”

Before we all scramble aboard this bandwagon, it’s important to look at how earlier predictions about the economic benefits from fracking in Pennsylvania have been fulfilled. The record doesn’t inspire confidence:

  • We were told that fracking would significantly improve the employment picture. As it turned out, energy companies preferred to hire out-of-state workers to crack open the wells. Many of the new jobs that were created turned out to be part-time or temporary work.
  • We were promised that energy leases would pour millions of dollars into depressed rural economies. Instead, leaseholders have been caught engaging in tricky accounting practices to minimize payments to landowners.

And what are the costs?

The recent analysis also ignores factors that economists call externalities—costs that are born by society as a whole, rather than business expenses that any particular company must pay. Environmentalists charge that fracking endangers water purity, air quality, road safety, and the wellbeing of humans, livestock, and wildlife across the state. But, because these costs don’t show up on the balance sheets of energy firms, almost all analysts ignore them.

It can be pleasant to think about a Pennsylvania industrial renaissance thanks to hydraulic fracking. It can be just as pleasant to daydream about the riches and fame one might collect thanks to a genie from a magic lamp. As things stand today, believing in either of these scenarios requires turning off critical thinking and engaging in fantasy that ignores existing evidence.

Legal Lookout

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