• 
• 

In 2005, Pennsylvania issued four permits for companies to drill into the Marcellus Shale. This year, it will issue more than 2,300—a nearly 600 percent increase in just five years. Much of this rush is being fueled by billions of dollars from the world's largest energy companies and foreign nations.

Since 2008, a number of mega-deals have been announced by major energy companies around the globe that have paid a premium to capitalize on the abundant natural gas resources in the Marcellus, with the most notable being a $41 billion deal by Exxon Mobil to acquire XTO Energy, which has approximately 280,000 acres under lease in the Marcellus Shale region.

Other multi-billion deals have by announced by international corporations, including Norwegian energy giant StatoilHydro's nearly $3.4 billion deal with Chesapeake Energy; a $4.7 billion deal by Europe's largest energy company, Royal Dutch Shell to buy East Resources; and a $1 billion joint venture among the U.K.'s BG Group and EXCO Resources. Coal giant Consol Energy also paid $3.5 billion to acquire the natural gas business of Dominion Resources in the Appalachian region.

 

• 
• 

About Common Cause

Common Cause is a nonpartisan, nonprofit advocacy organization founded in 1970 by John Gardner as a vehicle for citizens to make their voices heard in the political process and to hold their elected leaders accountable to the public interest. Today, Common Cause is one of the most active, effective, and respected nonprofit organizations working for political change in America. Common Cause strives to strengthen our democracy by empowering our members, supporters and the general public to take action on critical policy issues. In this spirit, Common Cause serves as an independent voice for change and a watchdog against corruption and abuse of power. Together with our sister organization, the Common Cause Education Fund, we employ a powerful combination of grassroots organizing, coalition building, research, policy development, public education, lobbying and litigation to win reform at all levels of government.

Executive Summary of the Report:

A faction of the natural gas industry has invested more than $747 million as part of a 10-year lobbying and political spending campaign to persuade federal authorities to ignore the dangers of hydraulic fracturing or “fracking,” a rapidly expanding but poorly regulated method of tapping gas reserves. Fracking involves injecting a mix of sand, chemicals, and water into a well at high pressure in order to break up underground rock formations and free up natural gas.  Pollution may occur underground, with fracking chemicals or methane directly contaminating aquifers and drinking wells, or above ground, as streams or tributaries are polluted by spills or improper wastewater disposal. Nationwide, more than 1,000 complaints of water contamination due to fracking have already been reported.  

 Natural gas obtained from fracking and horizontal drilling in shale deposits – a combination  which produces massive amounts of toxic wastewater – will rise from 16 percent of all U.S. natural gas production in 2009 to 45 percent by 2035, according to the U.S. Department of Energy.  Despite the pollution risks, the industry has argued that regulatory exemptions for fracking are needed to give America the opportunity to tap vast reserves of natural gas that have been previously unobtainable, generate millions of new jobs, reduce energy costs for the American consumer, and dramatically reduce America’s dependence on foreign oil. This is an impressive list—suggesting a “cure-all” for some of America’s biggest domestic and foreign challenges.

 

---

http://www.commoncause.org/atf/cf/%7Bfb3c17e2-cdd1-4df6-92be-bd4429893665%7D/DEEP%20DRILLING%20DEEP%20POCKETS%20NOV%202011.PDF

 

• 
• 

Complaint being filed against Pennsylvania State University with the
Middle States Commission on Higher Education by the Responsible
Drilling Alliance

Additional information and supporting documents:

The Responsible Drilling Alliance, a nonprofit 501 (c) (3) organization
in Williamsport, Pennsylvania, is filing a complaint against Pennsylvania
State University. We are asking the Middle States Commission on Higher
Education to consider this complaint in the context of the accreditation
review of Penn State currently underway.  Like the issue that caused
Middle States to begin its investigation into the universityʼs governance, this
complaint also centers on the abuse of public trust by the university.

Penn State published three papers advocating for the shale gas industry which
appeared to be independent research papers.

These papers contained greatly exaggerated projections of jobs, economic
development, and tax revenues.

Coming from a highly regarded public research institution, the papers profoundly
influenced the legislative debate in Pennsylvania on taxes and regulation in favor of the
gas industry. They became the rational for policy decisions by the former and current
state administrations.

The three Penn State papers are consistent with similar works in other regions that the
shale gas industry has commissioned and uses as a strategy to gain concessions.

The two lead authors have produced a series of similar papers, using their position in
higher education, to advocate for narrow interest of the fossil fuel industry.

Penn State never distancing itself from the original paper and allowed its research
reputation to be associated with the two subsequent releases after it became known that
the authors and their work directly served the interest of the shale gas industry.

RDA is charging that Penn Stateʼs actions were unethical and constitute an abuse of the
publicʼs trust

•    Penn State published an advocacy for the shale gas industry under the
guise of an independent research report.   Emerging Giant, Prospects and
Economic Impacts of Developing the Marcellus Shale Natural Gas Play,
was followed by Update, 2010, and Impacts and Future Potential, 2011.
These papers were released under Penn Stateʼs name and authored by
former Penn State professors but sponsored by the shale gas industry.

•    The papers contained a host of highly exaggerated predictions on jobs,
economic development, and tax revenues.  The original printing of
Emerging Giant did not carry a notice of sponsorship nor a disclaimer
from the university.  None of the three papers were peer reviewed or
published in professional journals. Neither of the two lead authors have a
background in the paperʼs primary subject: regional economics. One
author being a petroleum engineer the other a fuel market analyst. Both
lead authors had left Penn State employ before the release of the first
paper.

•     Emerging Giant and Update profoundly influenced the legislative
debate on taxes and regulation in Pennsylvania in favor of the gas
industry. The excessive predictions and claims have been used to
pressure legislators into making concessions.  The most successful one
being the defeat of the severance tax. Emerging Giant had the most
extensive roll-out of any academic paper in Penn Stateʼs history.  Almost
immediately, the gas industryʼs public relations machinery brought
Emerging Giant into the limelight of the national and international media.
Gas industry lobbyists took it around to the legislative offices in Harrisburg
as well as to the governorʼs mansion.  The copies the lobbyists dropped
off had Penn Stateʼs name and shield on the cover but carried no
acknowledgement that the work had been commissioned by the Marcellus
Shale Gas Committee nor was there a university disclaimer inside.

•    On August 5, 2009, a second printing containing an acknowledgement
and disclaimer was issued without discernible fanfare. By then, however,
the damage had been done. Emerging Giant, being from a prestigious
research university and of apparent independent scholarship,
overwhelmed the debate and validated all the shale gas industryʼs
positions. From that moment on, critics of gas drilling and proponents
alike would start their statements by agreeing that shale gas promised
great economic benefits. Governor Rendell, even while proposing a
severance tax, would quote Emerging Giantʼs pronouncements. 
Governor Corbett and Lt. Governor Cawley, head of the Marcellus Shale
Commission, used the Penn State Reportʼs projections as the basis for
their policies. The final report from the Marcellus Shale Advisory
Commission released in July 2011 cited projections from the Update. (p.
83)

http://files.dep.state.pa.us/PublicParticipation/MarcellusShaleAdvisoryCommission/
MarcellusShaleAdvisoryPortalFiles/MSAC_Final_Report.pdf

•    A memorandum from the prestigious Fels Institute of Government at the
University of Pennsylvania advising Governor Corbett on how to handle
his pro drilling agenda.  They uncritically quoted statistics from the Penn
State papers along with blatant misuse of L & I statistics taken from the
Marcellus Shale Coalition web site.

Policy Memorandum to Governor Corbett

Happy Fracking Inc., Fels Institute of Government, April 23, 2011 
Recommendations on how to Maintain the Governorʼs Core Position on
Regulating the Natural Gas Drilling of Pennsylvaniaʼs Marcellus Shale

http://www.fels.upenn.edu/sites/www.fels.upenn.edu/files/marcellus_shale_proposal.pdf

•      Penn State is culpable because these documents were highly
publicized and well known to the universityʼs administration. Their
credibility was publicly challenged by professionals in the field, and their
predictions of jobs werenʼt validated by Labor and Industry statistical data.
Department of Revenue data doesnʼt support the tax revenues reported in
the study. 

•    The three Penn State Reports are part of a well worn shale gas
industry strategy to gain favorable legislative and tax concessions. In the
various shale regions around the country, the industry has commissioned
a series of economic studies purporting to show the positive impact of
shale drilling.  They hire well known consulting firms or professors from
the regional public university to produce these studies.  The studies use
IMPLAN or another input-output software and report their findings as
projections based on the industryʼs capital expenditures (see listing of
studies below).

•    Listing on the Marcellus Shale Coalition website demonstrating the 
public relations benefit to the gas industry from the release of the 2010
Penn State Update.

http://marcelluscoalition.org/2010/05/what-theyre-saying-about-the-new-penn-state-study/

•    With Emerging Giant, the gas shale industry hit the public relations
jackpot. Its purpose, however, if judged by the other papers as a class,
was to affect legislation.  The conclusions of the study are always
summarized at the beginning of the paper. This format yields powerful
press releases and punch lines for reporters but more importantly it gives
legislators the gas industryʼs message without requiring them to read and
digest the report.  Emerging Giantʼs executive summary promised a great
bonanza but warned that Governor Rendellʼs proposed severance tax and
environmental regulations would threaten it (see the executive summary
below). These claims were refuted by other economists.   

From Emerging Giant executive summary July 24, 2009 

Governor Rendell recently proposed a severance tax on natural gas production.
This study finds that this tax cannot be passed on to consumers and, therefore, drilling
activity would decline by more than 30 percent and result in an estimated $880 million
net loss in the present value of tax revenue between now and 2020. Severance tax
revenue gains are more than offset by declining state and local income taxes resulting
from lower drilling activity under the severance tax. The high level of drilling activity in
Pennsylvania is a function of relatively lower taxes. This competitive advantage should
be maintained as the Marcellus competes for capital and labor with other shale plays
around the nation. Imposing a severance tax at this early stage of development could
significantly inhibit the growth of the Marcellus gas industry in Pennsylvania. Proposals
to regulate hydraulic fracturing under the federal Safe Drinking Water Act pose yet
another serious threat to the development of the Marcellus Shale and other
unconventional gas sources.

http://www.alleghenyconference.org/PDFs/PELMisc/SUStudyMarcellusShale072409.pdf

How Marcellus Shale gas came to be tax-exempt in Pa.
    Excerpt from Philadelphia Inquirer article

The study. As the summer rolled on and the budget impasse deepened, the industry made its
case in Harrisburg, spending more than $1 million to lobby legislators in the first half of the year
alone, state reports showed.

Foes of the gas tax began citing a Pennsylvania State University study, "An Emerging Giant:
Prospects and Economic Impacts of Developing the Marcellus Shale Natural Gas Play."

The study said the tax would backfire.

Marcellus Shale drilling in Pennsylvania was in "the takeoff phase," the study said. It concluded
that a severance tax would decrease revenue by reducing drilling and slowing job growth.

Without the tax, the study said, the Marcellus reserve could become a bonanza for the state "if
pro-growth policies are pursued that unleash the entrepreneurial spirit."

The study's primary author, Robert Watson, said Friday that the shale contains enough gas to
make Pennsylvania "an OPEC nation."

Watson, an emeritus professor of petroleum and natural-gas engineering, also acknowledged that
the industry had funded the study.

The Marcellus Shale Committee, a group of more than 50 natural-gas and drilling companies,
commissioned the study and paid Penn State about $100,000 for it, he said.

http://mobile.philly.com/news/?wss=/philly/news/homepage/&id=65922647&viewAll=y#more

•       The lost of severance tax revenues has been estimated at 500 million
dollars. The gas industryʼs investment in the Penn State Reports has paid
off handsomely.

•     Because of anomalies in the structure of the gas industry, input-output
methodology, such as IMPLAN, greatly exaggerate the shale industryʼs
economic impact. The shale gas industry requires great amounts of
capital but has very low staffing needs. They also have a number of ways
of avoiding taxes.  In Pennsylvania, for instance, local and county
governments have no applicable taxes relating to drilling.  Software
algorithms based on capital expenditures grossly inflate predictions of
jobs, taxes, and economic development.

•     On June 4th, 2010, the Responsible Drilling Alliance issued an open
letter to then President Graham Spanier asking him to publicly disavow
Emerging Giant and the Update which had just been released. Dean
Easterling of the College of Earth and Mineral Science responded. He
candidly admitted that the authors had overstepped into the realm of
advocacy on some issues but asserted the principle of academic freedom
in defending the documents. 

RDAʼs open letter to President Spanier June 4th 2010: http://responsibledrillingalliance.org/index.php/education/economics/369-open-letter-to-penn-state-president

Dean Easterlingʼs  reply on behalf of President Spanier.     http://responsibledrillingalliance.org/index.php/education/economics/371-penn-states-response-to-rda

RDAʼs response to Dean Easterling.                                  DeanEasterling.pdf 

•RDA fully supports academic freedom and even the universityʼs right to
publish poor and faulted research. We support the right of professors to
express honest opinions and research whether we agree with them or
not. The issue isnʼt poor methodology, but rather manipulating the
analysis to serve a clientʼs corporate interests.

Frackers follow tobacco's lead in funding research
Industry trying to buy prestige of universities, while ties go unreported
July 29, 2012 12:09 am

By Jim Efstathiou Jr. / Bloomberg News

Cary Nelson, president of the American Association of University Professors, who made
the tobacco analogy, said companies and their trade associations are "buying the prestige" of
universities that are sometimes not transparent about funding nor vigilant enough to prevent
financial interests from shaping research findings.

The Penn State report is not the only example.

A professor at the University of Texas at Austin led a February study that found no
evidence of groundwater contamination from fracking. He did not reveal that he is a member of
the board of a gas producer. Company filings examined by Bloomberg indicate that in 2011, he
received more than $400,000 in compensation from the company, which has fracking operations
in Texas.

A May report on shale gas from the State University of New York at Buffalo contained
errors and did not acknowledge "extensive ties" by its authors to the gas industry, according to a
watchdog group. One of the authors was Mr. Considine, the same economist who wrote the Penn
State study.

http://www.post-gazette.com/stories/news/us/frackers-follow-tobaccos-lead-in-funding-
research-646688/#ixzz25KxeqUQu

•The gas industry and the authors the Penn State Reports have a pattern
of using well regarded research institutions to front manipulated research. 
One of the authors, Considine has used his academic position to produce
a series of papers supporting the gas, oil, and coal industries with the
intent of affecting the outcome of legislation.   Below is a list of
Considineʼs papers from the University of Wyomingʼs website.  Reading
the executive summary of each will reveal what the sponsoring industry
wants from the legislature in question.

Considine and Watson’s papers listed on University of Wyoming’s web site

http://www.uwyo.edu/cee/working-papers.html

2012

Considine, Timothy, Robert Watson, Nicholas Considine, and John Martin, "Environmental
Impacts During Marcellus Shale Gas Drilling: Causes, Impacts, and Remedies"

2011

Considine, Timothy J. and Edward Manderson, "Balancing Fiscal, Energy, and Environmental
Concerns: Analyzing the Policy Options for California's Energy and Economic Future."
Considine, T.J., "Balancing Economic Benefits with the Environmental Impacts of the Shale
Gas."
Considine, T.J., "Economic Impacts of the Pennsylvania Marcellus."
Considine, T.J., R. Watson, S. Blumsack. "The Pennsylvania Marcellus Natural Gas Industry:
Status, Economic Impacts and Future Potential," The Pennsylvania State University,
Department of Energy and Mineral Engineering.
Considine, T.J., R. Watson, N. Considine. "The Economic Opportunities of Shale Energy
Development," Center for Energy Policy and the Environment at the Manhattan Institute.
 
2010

Considine, T.J. and D. Larson. "Substitution and Technological Change under Carbon Cap and
Trade".
Considine, T.J. "The Economic Impacts of the Pennsylvania Marcellus Shale Natural Gas
Play: An Update," The Pennsylvania State University, Department of Energy and Mineral
Engineering.
Considine, T.J. "The Economic Impacts of the Marcellus Shale: Implications for New York,
Pennsylvania, and West Virginia," American Petrolem Institute.
Considine, T.J. "The Economic Value of World Coal Production," Chapter in F. Clemente, ed.,
Hard Facts: the global value of coal" World Coal Institute and Coal Industry Advisory Board.

2009

Considine, T.J., R. Watson, J. Sparks, R. Entler. "An Emerging Giant: Prospects and Economic
Impacts of Developing the Marcellus Natural Gas Play," The Pennsylvania State University,
Department of Energy and Mineral Engineering.
van't Veld, Klaas, C.F. Mason, and A. Leach. "Economic Co-optimization of Enhanced Oil
Recovery and Carbon Sequestration"

•Considine and Watsonʼs most recent paper released by the University of
Buffaloʼs Shale Resources and Society Institute (SRSI) was particularly
sloppy and quickly brought a firestorm of criticism to the university. 

 http://www.srsi.buffalo.edu/wp-content/uploads/2012/05/UBSRSI-Environmental-Impacts-Single-Page.pdf
 

The UB Shale Play: Distorting the Facts about Fracking
A Review of the University at Buffalo Shale Resources and Society Instituteʼs Report on
“Environmental Impacts During Marcellus Shale Gas Drilling”

•Excerpt from Public Accountability Initiative reportʼs executive summary,
“The report’s inaccurate and biased analysis and the authors’ conflicts of interest
suggest that the University at Buffalo is being used as an academic front for gas
industry misinformation, rather than as a venue for independent, informative analysis,”
said Kevin Connor, director of the Public Accountability Initiative.

“This is an unfortunate example of industry spin being given much greater weight than it
is worth, and the University at Buffalo is implicated in this deception.”
http://public-accountability.org/2012/05/ub-shale-play/

Criticisms of Emerging Giant and the IMPLAN method.
•    Given the power and prestige of Penn State, criticisms of Emerging Giant were slow
to develop.  First off the mark was the Pennsylvania Budget and Policy Center in
October of 2009.

Natural Gas Industry Report Falsely Claims Sky Will Fall if Severance Tax
Enacted
Conclusion: The “An Emerging Giant” report serves the narrow financial interests of
its funder, the natural gas industry.  Policymakers could best serve the interests of all
Pennsylvanians by more closely scrutinizing the report and the interests behind its
prescriptions. The decision for Pennsylvania policymakers should not be whether they
will entice drillers to come to the state, but rather whether they want to continue to
subsidize the industry by not collecting a tax, which forces other taxpayers to foot
the bill for cleanup, environmental damage, infrastructure repair, emergency
services, and other social costs.

http://pennbpc.org/natural-gas-industry-report-falsely-claims-sky-will-fall-if-severance-tax-enacted

The Economic Impact of Shale Gas Extraction: A Review of Existing
Studies
Thomas C. Kinnaman, Bucknell University  1/1/2010

“Several reports sponsored by the gas industry have estimated the economic impacts of
shale gas extraction on income, employment and tax revenue....Due to questionable
assumptions, the economic impacts estimated in these reports are very likely overstated.”
Thomas C. Kinnaman. 2010. "The Economic Impact of Shale Gas Extraction: A
Review of Existing Studies" The Selected Works of Thomas C. Kinnaman
Available at: http://works.bepress.com/thomas_kinnaman/9

Testimony prepared for NYS Assembly Committee on Environmental
Conservation Hearing on Revised Draft SGEIS governing natural gas drilling
Re: Economic Assessment
Date: October 6, 2011
Submitted by: Jannette M. Barth, Ph.D., Economist, Pepacton Institute LLC

“The gas industry is seriously misleading the public and our politicians. They ignore costs
and exaggerate benefits.”
http://notohydrofracking.blogspot.com/2011/10/economic-assessment-of-hydrofracking-
dr.html
March 27, 2010
http://catskillcitizens.org/learnmore/bartheco.PDF

Statement on Gas Industry-Financed Report on Marcellus Shale's Economic Impact
Pennsylvania Budget and Policy Center  7/20/2011

HARRISBURG, PA (July 20, 2011) — The Marcellus Shale Coalition released a new study
today assessing the impact of natural gas drilling in Pennsylvania. Sharon Ward, Director of
the Pennsylvania Budget and Policy Center, responded with the following statement:
(excerpt)

“This is the third study conducted by Penn State faculty on behalf of the natural gas industry
into the economic impact of the Marcellus Shale. We are pleased to see that Penn State has
made it clear this time that the study is sponsored and funded by the natural gas industry, not
the university.

“The study overstates the number of jobs supported by the industry. It states that 140,000
jobs (2.4% of the state workforce) are supported by the industry, but jobs data from the state
Department of Labor and Industry show that less than 19,000 people were employed directly
in core Marcellus Shale industries at the end of 2010.

“The study also inflates the amount of tax dollars generated by the industry. The study
attributes $1.1 billion in state and local taxes to industry activity in 2010. This is much higher
than a recent Department of Revenue report that attributed $219 million in 2010 state tax
payments to the gas industry and its affiliates.

The Pennsylvania Budget and Policy Center is a non-partisan policy research project that
provides independent, credible analysis on state tax, budget and related policy matters, with
attention to the impact of current or proposed policies on working families.

http://pennbpc.org/sites/pennbpc.org/files/Statement-on-Industry-Financed-MS-Economic-
Impact.pdf

•An extensive study by Ohio State University contains a critical analysis of
IMPLAN methodology and the Penn State Papers.

The Economic Value of Shale Natural Gas in Ohio
Amanda Weinstein  Mark Partridge
Department of Agriculture, Environmental, and Development Economics
Ohio State University    12/20/2011

http://aede.osu.edu/sites/drupal-aede.web/files/Economic%20Value%20of%20Shale%20Dec
%202011.pdf

•Reports from other shale plays showing a consistent gas industry strategy
of sponsoring reports like the three Penn State Reports.

The Economic Impact of the Natural Gas Industry in La Plata County, 2003-2004
11/ 2005

http://www2.fortlewis.edu/portals/157/docs/eis/EIS-oilgas.pdf

La Plata County benefits from oil and gas with good jobs, tax support and wealth
creation.

By  Deborah Walker, Ph.D. Assistant Professor of Economics
Director, Office of Economic Analysis and Business Research
School of Business Administration
Fort Lewis College
Durango, CO 81301

and Robert Sonora, Ph.D. Assistant Professor of Economics
November 2005

Acknowledgements
This study would not have been possible without the assistance of Christi Zeller,
Executive Director of the La Plata County Energy Council, Natural Gas industry
producers that operate in La Plata County, and Fort Lewis College student assistants,
Meghan VanDeVeire and Megan Klocek.

Projecting the Economic Impact of the Fayetteville Shale Play for 2008-2012
(2008)

http://groundwork.iogcc.org/sites/default/files/FayettevilleShaleEconomicImpactStudy2008.pdf

University of Arkansas Center for Business and Economic Research, March 2008.
This study, prepared by the University of Arkansas Center for Business and Economic
Research and sponsored by Arkansas Land and Exploration LLC, Chesapeake Energy
Corporation, Petrohawk Energy Corporation, and Southwestern Energy Company,
quantifies the potential economic impact of the Fayetteville Shale Play for the years
2008 through 2012.

Over the next five year period, it is estimated that total economic activity of about $17.9
billion will be generated with annual direct employment of about 4,600 people.

About $1.8 billion total in state tax revenues are estimated to result from direct, indirect,
and induced effects of Fayetteville Shale activities.

About $150 million total city and tax revenues are anticipated over the five-year period.

The study cautions that projections are subject to two risks -- a decline in natural gas
pricing and a significant increase in severance taxes.

http://groundwork.iogcc.org/sites/default/files/loren-scott-impact2008.pdf

The Economic Impact of the Haynesville Shale on the Louisiana Economy in
2008 (2009)

Loren C. Scott & Associates, April 2009. Prepared for the Louisiana Department of
Natural Resources, this study captures and measures the direct and indirect effects on
11
the Louisiana economy from the activities of extracting firms operating in the Haynesville
Shale in 2008.

During 2008, seven of seventeen firms generated approximately $2.4 billion in new
business sales within the state of Louisiana.

As a result of these activities, nearly $3.9 billion in household earnings was created in
2008.

There was an increase of 32,742 new jobs within the state in 2008.

State and local tax revenues increased by at least $153.3 million in 2008.

An Enduring Resource: A Perspective on the Past, Present, and Future
Contribution of the Barnett Shale to the Economy of Fort Worth and the
Surrounding Area (2009)

The Perryman Group, March 2009. This recent study by The Perryman Group (TPG), a
Texas-based economic research and analysis firm, provides an overview of the
economic impact of the Barnett Shale in the Fort Worth-area. TPG has been measuring
the impact of activity within the Barnett Shale for several years and presents the results
of this year's research in an easy-to-read format.

Key findings of the report:

The Barnett Shale has continues to play a major role in the growth of the Fort Worth
area economy. Although the pace has slowed in recent months, the field remains one of
the most important deposits of natural gas in the US and a source of tens of thousands
of jobs in the region.

Exploration, drilling, and production in the Barnett Shale continue to serve as a key
economic generator for Fort Worth and the surrounding area;

The pace of activity in the Barnett Shale is expected to gain momentum with economic
recovery efforts. Long-term energy needs will assure ongoing development of this
important resource.

• Tax avoidance by the gas industry.

Marcellus Shale Frackers Utilize the "Delaware Loophole"
  Desmogblog (http://s.tt/1jOu1
New York Times source document:
http://www.nytimes.com/2012/07/01/business/how-delaware-thrives-as-a-
corporate-tax-haven.html?_r=1&pagewanted=all

More than 400 corporate subsidiaries linked to Marcellus Shale gas
exploration have been registered in Delaware, most within the last four
years, according to the Pennsylvania Budget and Policy Center, a
nonprofit group based in Harrisburg that studies the state’s tax policy.

In 2004, the center estimated that the Delaware loophole had cost the
state $400 million annually in lost revenue — and that was before the
energy boom.

More than two-thirds of the companies in the Marcellus Shale
Coalition, an industry alliance based in Pittsburgh, are registered to a
single address: 1209 North Orange Street, according to the center.

•Honest research at Penn State.

Penn State is a large institution and departments within it serve different
constituencies. The Penn State Extension serves the farmers and regions where drilling
is rampant. Tim Kelsey, Ph.D., Professor of Agricultural Economics, Penn State
Cooperative Extension, has participated in a number of studies detailing the economic
effects of gas exploration on the region. 

The studies that Kelsey has participated in canʼt be categorized as either pro or
anti drilling but are, as they should be, an attempt to parse out its effect. Comparing
Kelseyʼs work to Considine and Watsonʼs is instructive of the difference between
competent scholarship and advocacy. Kelseyʼs papers would provide a much more
sober basis for policy decisions but they donʼt have the powerful public relations and
lobbying machine of a multi billion dollar industry behind them.

Marcellus Shale: Land Ownership, Local Voice, and the Distribution of
Lease and Royalty Dollars    July, 2012
http://www.scribd.com/doc/100688155/Leases-Can-t-Vote

Local Business Impact of Marcellus Shale Development
http://pubs.cas.psu.edu/freepubs/pdfs/ee0005.pdf

Economic Impact of Marcellus Shale in Pennsylvania: / Employment and
Income 2009
http://www.msetc.org/docs/EconomicImpactFINALAugust28_000.pdf

•Factors that help explain why the universityʼs administration and the
School of Earth and Mineral Sciences completely lost perspective in
relationship to the gas industry.  The only direct quid pro quo being
asserted, however, is funding by the gas industry for Emerging Giant and
its two successor publications.

Terry Engelder, a geology professor at Penn State, has long been a
proponent of the potential of the Marcellus Shale. Working from the United
States Geologic Serviceʼs estimates of 7% of the Marcellus shale, Engelder
projected an enormous potential. 

His estimates were released at a press conference in January, 2008
and Engelder quickly became the academic godfather of the Marcellus
shale play.  He became controversial for his strong advocacy of Marcellus
drilling and gas industry positions and bumped up his original estimates of
gas reserves by a factor of almost 10.  USGS later revised them downward
by 80%.

Shale gas reserve estimates are not just academic. They affect the
valuation of leased land and the stock and credit worthiness of the gas
companies who hold the leases.

•Pittsburgh Post Gazette article detailing the history of the opening of the
Marcellus shale play.

The Marcellus Boom / Origins: the story of a professor, a gas driller and
Wall Street
 http://www.post-gazette.com/stories/local/marcellusshale/the-marcellus-boom-origins-the-story-
of-a-professor-a-gas-driller-and-wall-street-288098/#ixzz24sK6jvBA

Excerpts from the article:

Penn State prides itself, he (Engelder) said, on broad collaborations on research with
industry, which contributes roughly $100 million a year to the university.

A long line of other petroleum companies, including Chevron, ConocoPhillips, Dominion,
Range Resources and Texaco -- would eventually help fund research at Penn State
through Mr. Engelder's lab.

Mr. Engelder estimated that over his career his research has benefited from at least $6
million in grants from industry and $8 million from government.

"There is a symbiosis between academic research, and by that I mean big-time research
of the type that Penn State does, and industry. Industry really does benefit from this.
There is a reason that industry contributes very handsomely to the academic world."...

The result was the Penn State news release. That day, wire service United Press
International quoted Mr. Engelder as saying, "The value of this science could increment
the net worth of U.S. energy resources by a trillion dollars, plus or minus billions."...

Jonathan D. Silver:15 or 412-263-1962.
First Published March 20, 2011 12:00 am

•Terrance Pegula graduated from of the College of Earth and Mineral
Sciences in 1973. He founded and was the owner of East Resources
which held a large amount of leased Marcellus shale acreage in
Pennsylvania. East Resources sold out to Royal Dutch Shell in May of
2010 for 4.7 billion dollars. In September of the same year, Pegula
announced an 88 million dollar donation to Penn State to build a ice
hockey rink and to fund a national ice hockey program.

WikiMarcellus

It was reported at the end of May, 2010 that East Resources had sold all of its business
to Royal Dutch Shell for $4.7 billion. The sale included all of its net 650,000 acre
Marcellus shale leasehold, but not its West Virginia assets.
http://waytogoto.com/wiki/index.php/East_Resources

Pegulas Commit Historic Gift to Penn State for New Arena and Hockey Program
Friday, September 17, 2010
http://giveto.psu.edu/s/1218/base-template.aspx?
sid=1218&gid=1&pgid=252&cid=2494&ecid=2494&ciid=4061&crid=0
15

 

• 
• 

Land owners kept in dark about fracking violations on their property

Reporter Poppy Harlow traveled to rural Hughesville, Pennsylvania to meet the group of land owners and reveal to them the astonishing number of accidents, “pollution incidents” and other safety violations that have occurred on their land. None of the people leasing land to Expo, the drilling company that owns the wells, had heard of any of the violations at all.
It is unclear whether responsibility for reporting the violations lies with the drilling company or with the Department of Environmental Protection. The information is posted online, but no effort has been made to inform the residents, even though some wells on their property pose risks of fire, explosion or contamination of ground water.

Watch the CNN news clip by clicking this link.