Economic Impacts of Shale Natural Gas Drilling in Western Pennsylvania

Due to advancements in technology since the 1990s, shale natural gas oil drilling has become a more economically viable occupation for shale oil drilling companies and for the people working for them, thus providing more economic stability to the residents of the small towns and cities located in the western Pennsylvania region.

Economic impacts, however, must be weighed against environmental circumstances since the technology of hydraulic fracturing uses huge volumes of water and introduces carcinogens and other contaminants into the water. There are also air and noise pollution problems. Residents in shale drilling areas have concerns, and currently there are lawsuits pending against oil companies in Pennsylvania, New York, West Virginia, and Ohio.

The Marcellus Shale Play

The largest shale deposits are located in what is a termed a shale play located in western Pennsylvania, northern West Virginia, eastern Ohio, and southern NY. This extensive geological deposit of shale is called the Marcellus Shale Play. (See sources below for maps of the area.)

Currently, 60 percent of shale oil drilling occurs in the western Pennsylvania portion of the Marcellus Shale Play, opening up economic opportunities for residents of the area and bringing new residents to the area, which also stimulates western Pennsylvania’s real estate market.

Why western Pennsylvania?

New York’s moratorium on shale natural gas drilling is currently preventing natural gas shale oil drilling in that state until residents and commissions determine the environmental safety of natural gas oil drilling. West Virginia’s severance tax is reducing the amount of natural gas drilling there. 

Western Pennsylvania has no severance tax and currently no laws or regulations governing shale natural gas drilling.

More jobs

People looking for work are flocking to western Pennsylvania where they are finding jobs with the nine or so oil companies who have set up natural gas drilling sites there.

Local western Pennsylvania residents are finding jobs in many of the different industries associated with shale oil drilling as well as with the oil companies themselves.

Local residents are also reaping rewards in the form of royalties, and other economic gains due to ownership of lands where the natural gas shale deposits are located. Currently, there are no laws against drilling in western Pennsylvania.

The statistics

According to information at the American Petroleum Institue (API)  the Marcellus shale natural gas drilling provides $3.77 billion to the local western Pennsylvania economy; and the figures for 2009 were $7.17 billion. These figures include spending within the industry, spending by industries for goods and services, incomes derived from spending in the area, and household spending for goods and services.

Recoverable reserves in the Marcellus Shale Play, according to could be as much as 489 trillion cubic feet, the second largest shale field in the world next to the South Pars field in Qatar and Iran. Marcellus recoverable reserves are valued at approximately two trillion dollars.


With recoverable reserves as high as they are in western Pennsylvania’s share of the Marcellus shale field, and as long as technology continues in an upward spiral, the western Pennsylvania region should continue to flourish. However there may be a continued effort by some residents to weigh the environmental consequences against the economic impacts.

Although natural gas is better for the greenhouse effect, other environmental factors related to the production of shale oil may hinder the process; however, it is possible that with continued technological advances, a balance between economy and environment can be established.