Ending the moratorium on “hydrofracking” of natural gas in upstate New York would spur over $11.4 billion in economic output, create 15,000 to 18,000 jobs in the Western New York and the Southern Tier regions, and generate $1.4 billion in state and local tax revenues, according to a study issued last week by the Manhattan Institute’s Center for Energy and the Environment.

screen-shot-2011-06-14-at-85301-am-226x300-5500773The study — authored by a trio of researchers led by Timothy J. Considine, a professor of economics at the University of Wyoming — comes weeks before the scheduled July 1 expiration of a drilling moratorium imposed last year by former Governor David Paterson.  However, the state Department of Environmental Conservation apparently has not yet completed the Generic Environmental Impact Statement needed as framework for issuing drilling permits, so the moratorium effectively may extend for weeks if not months to come. A bill to extend the moratorium for another year has been passed by the state Assembly but is expected to die in the state Senate.

Noting the extensive natural gas drilling activity in other states, especially neighboring Pennsylvania, Considine wrote:

The development of unconventional natural gas and oil resources is well under way throughout the United States and the world on account of the arrival of two technologies: directional drilling and hydraulic fracturing. The application of these technologies represents a paradigm shift in oil and gas development, sweeping out the model of intensive initial development followed by a long period of production, and ushering in natural gas manufacturing, which requires unremitting drilling activity to add new wells that can replace rapidly depleting older ones. Given the magnitude of these unconventional resources and wells’ high initial output, such drilling and production activity is likely to continue for decades, creating jobs and driving growth in commercial activity, personal income, and tax revenue for years.

Environmental concerns have focused on potential contamination of water sources and on disposal of wastewater generated by the “fracking” process. But based on a close analysis of environmental records in Pennsylvania, Considine concluded that “the value of these environmental impacts is far smaller than the economic benefits of the activities that caused them.”

A typical Marcellus shale well generates about $4 million in economic benefits while generating only $14,000 in economic damages from environmental impacts,” he said.

Robert Bryce, a senior fellow at the Manhattan Institute, put New York’s natural gas potential in a national context.  In an article in Monday’s Wall Street Journal, Bryce wrote:

The shale drilling boom now underway in Texas, Louisiana, Pennsylvania, Oklahoma and other states is already creating jobs, slashing natural-gas prices, and spurring billions of dollars of investment in new production capacity for critical commodities like steel and petrochemicals. Better yet, it’s spurring a huge increase in domestic oil production, which has been falling steadily since the 1970s.

Opponents “hyping” environmental concerns about hydrofracking are threatening to block industrial access to “cheap, abundant and reliable sources of energy,” Bryce said, adding:

The shale revolution now underway is the best news for North American energy since the discovery of the East Texas Field in 1930. We can’t afford to let fear of a proven technology stop the much-needed resurgence of American industry.Speaking at a Manhattan Institute luncheon at which the study was released last week, former Pennsylvania Gov. Edward Rendell said the economic benefits of tapping the Marcellus Shale in New York were too great to pass up.

“I would advise (Governor Cuomo) the moratorium should be lifted,” Rendell said. However, Rendell added as “an important caveat” that New York should learn from Pennsylvania’s experience by effectively regulating gas drilling. He also warned that the gas industry could “kill the golden goose” by continuing to oppose the imposition of a shale tax in Pennsylvania.


About the Author

E.J. McMahon

Edmund J. McMahon is a senior fellow at the Empire Center.

Read more by E.J. McMahon

You may also like

NY’s Slow Job Climb Continued in July, But Unemployment Rate Unchanged

As the economy continued its slow post-pandemic reopening, New York State continued to slowly regain jobs—but preliminary data indicate there was no improvement in the state's unemployment rate in July. Read More

New Data Confirm New York State’s Q1 Economic Plunge

New York's economy ended the first quarter of this year in virtual free fall, the latest federal data show. Read More

NY outlook: worse than 2008-09

#NYcoronavirus: The outlook for New York's economy is the grimmest on record, according to the first post-pandemic lockdown round of credible economic surveys and forecasts. Start with the Federal Reserve Bank of New York, whose regional economists today issued a notably pessimistic report based on their monthly Empire State Manufacturing Survey and a broader Business Leaders Survey that take sin the northern New Jersey and metropolitan New York. Read More

Wind costs could blow up

The long-term cost of subsidies for New York’s new offshore wind turbine projects could exceed $6 billion—or three times the amount acknowledged by Governor Andrew Cuomo’s energy agency. Read More

Offshore wind to soak upstate

Upstate electricity customers could shell out more than $1 billion to cover the state’s initial round of subsidies for offshore wind turbines, the Cuomo administration’s energy agency has now revealed. Read More

Trucking NY’s natural gas gap

Yesterday’s fatal truck accident outside Binghamton is a reminder that state government’s opposition to natural gas pipelines is having negative consequences⁠—including putting more gas trucks on the road. Read More

Cuomo tilts with windmills

Governor Andrew Cuomo is continuing full steam ahead with policies that will make the state’s already lofty renewable energy targets more expensive and less realistic. Read More

How NY fuels higher emissions

In the name of reducing greenhouse gas emissions, the Cuomo administration has been doing everything it can to block construction of natural-gas pipelines in New York. But that policy is probably accomplishing just the reverse—increasing greenhouse gas emissions by boosting reliance on fuel oil, which results in even higher emissions. Read More


Sign up to receive updates about Empire Center research, news and events in your email.


Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100
Fax: 518-434-3130
E-Mail: info@empirecenter.org


The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.