ARCHIVED: Resource Compendium for Industry, produced 2010

Natural Gas Development Resource Compendium

While NYS Department of Environmental Conservation (DEC) has been preparing to issue permits for natural gas wells, local municipalities have been preparing for this new industrial activity.   Broome County commissioned a study by Bernard L. Weinstein, Ph.D. and Terry L. Clower, Ph.D. to estimate the local economic impacts of development.  The conclusion to the report stated as follows:


The Marcellus Shale is currently one of the busiest natural gas drilling plays in the nation. Not only is the shale formation huge in size, it is also deep, thick, high in organic carbon context, and over-pressured in certain regions with high gas content (see Figure 3). In addition, it benefits from a pricing premium relative to most gas producing regions due to its proximity to the Northeastern markets. A decade from now, production could well outstrip that of the Barnett Shale in north Texas, currently the number one gas field in the continental United States.

Because Broome County is fortunately located at the epicenter of the Marcellus Shale geological formation, the potential economic and fiscal benefits from natural gas drilling and production are sizeable. As discussed above, over a 10-year period the economic impact of drilling alone could exceed $15 billion, supporting more than 16,000 person-years of employment and generating salaries and wages of $792 million. State and local tax coffers would receive $85 million of new revenues.

Ongoing production from completed wells will also contribute significantly to the Broome County economy. Our model predicts as much as $4.1 billion in new economic activity per year over a 10-year period supporting over 4,000 jobs and $314 million in salaries and wages. State and local tax receipts could be boosted by $52 million per year, with slightly less than half accruing to Broome County taxing jurisdictions. Local revenues will also be enhanced by bonus payments and royalties from wells located on county-owned property as well as new ad valorem taxes on wells located on private property. Finally, should Broome County and the City of Binghamton evolve into an administrative center for the natural gas industry in New York State; ancillary development can be anticipated with attendant income, employment and fiscal benefits to the region.

Of course, all of these economic and fiscal benefit calculations are predicated on the assumption that the State of New York creates and maintains a supportive regulatory and tax climate toward the natural gas drilling and production industry. Policymakers must keep in mind that New York is competing with many other states in the Marcellus Shale for investment in this infant industry. Excessive regulatory or fiscal burdens could significantly limit New York’s prospects. In particular, the state should avoid the temptation to levy a severance tax on natural gas production as this would only serve to drive the industry to Pennsylvania or another state.

Broome County also formed a Natural Gas Development Team.  The Team has compiled this compendium of information for the natural gas industry.  The compendium includes the following:

  1. Legal ordinances by the county and local municipalities regarding roads, aquifer protection, critical environmental areas, noise mitigation, etc.
  2. List of vendors for services utilized by the industry including accommodations, banking, building materials, brokers, manufacturing, waste disposal, economic development, equipment rentals, excavation, hardware, hospitals, professional services, etc.
  3. Education opportunities for industry workers including course/programs offered by Broome Community College and BOCES.