Shepstone Management Company, Inc.
“Frackalachia,” a report enabled by the Heinz family, paints a false picture of fracking to advance the family’s elite special interests.
A recent report from an entity labeling itself as the Ohio River Valley Initiative erroneously diminished Pennsylvania’s huge shale success, even suggesting it was a “resource curse.” The report, titled “The Natural Gas Fracking Boom and Appalachia’s Lost Economic Decade” focuses on the economies of 22 counties, artificially labeled as “Frackalachia.”
The uninformed argument contends, while gross domestic product may have soared in the shale counties of Ohio, Pennsylvania and West Virginia, these areas suffered in terms of personal income. Really? Well, no.
Some well-known publications regurgitated the pseudo-science from the report. The report itself, though, contradicts the headlines. Its misguided conclusions are based on comparisons of county data in “Frackalachia,” to U.S. averages, as opposed to similar natural gas producing counties or statewide figures.
Shale counties in West Virginia, for example, were compared to the five boroughs of New York City. Is that any way to evaluate the economic performance of rural counties? Obviously not and when we examine the limited detailed data from the report this is what we learn:
- The seven West Virginia shale counties grew real inflation-adjusted personal income by an average of 10.5% between 2008 and 2019, compared to only 7.8% for West Virginia as a whole. The shale region gained at a rate more than a third higher than the state.
- The eight Pennsylvania shale counties grew real personal income by 17.7% compared to 16.1% statewide.
- The seven Ohio shale counties did have lower growth relative to the state (8.8% compared to 13.9%) but that is largely due to what has happened in Jefferson County. It includes Steubenville, which has long-term severe decline preceding shale’s arrival. Shale did not come to Ohio until 2011 and only hit its stride two years later. If we look at what has happened since 2013, we learn Jefferson County average household income climbed 14.5% in real dollars compared to only 11.2% for Ohio as a whole.
“Frackalachia,” in other words, has significantly outperformed Appalachia; the exact opposite of what the folks at the Ohio River Valley Initiative want us to believe.
Moreover, there is no incorporated group by the name of the Ohio River Valley Initiative. It is simply the Potemkin face of the Community Foundation for the Alleghenies, which is funded by the Heinz Endowments. Heinz is a financial enabler of numerous groups dedicated to fighting natural gas development. This fact is ironic considering this fuel source has contributed to both an economic renaissance and an environmental success story for Western Pennsylvania where the Heinz family built their wealth.
The report does not take into account the obvious benefits wrought through natural gas development. Consider the following:
- The thousands of jobs created via the Shell Cracker, which happens to be in one of the counties not included in the list of Pennsylvania shale counties evaluated in the report.
- The billions of dollars paid out to landowners in lease payments and royalties.
- The extension of natural gas service to small, often rural, towns who never had it before.
- The growth of new manufacturing and service industries that have created tens of thousands of jobs all across Ohio, Pennsylvania and West Virginia.
- The support provided by the industry for local emergency and health services and its extraordinary responses to natural disasters at the request of localities in its regions.
- The nearly $2 billion in impact fees distributed to local governments throughout Pennsylvania, including every non-shale county.
- The hundreds of miles of local roads improved to better than ever condition to handle natural gas development traffic.
- The numerous farms saved as farmers received money to reinvest in new equipment, barns and cattle.
- The increased tourism generated by natural gas workers, providing the economic foundation for construction of new hotels to serve other tourists.
These critical facts were not considered in the “Frackalachia” report because they didn’t fit the desired narrative. Those critics who denigrate the state’s natural gas workers do not care about economic development, sustainability or anything at all designed to lift up Appalachia. Rather, it is about a thoroughly elitist environmental campaign intended to shut down the natural gas development that IS lifting up the real Appalachia.
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