The Marcellus black shale, located in northern Appalachia, could generate millions of dollars for Pennsylvania's economy, and Penn State is immersed in the process.
In January, Terry Engelder, professor of geosciences, estimated the Marcellus shale might contain more than 50 trillion cubic feet of natural gas.
By using breakthrough technology that allows for horizontal drilling into the fractures in the shale, Engelder said he figured out how to access the natural gas hidden beneath the surface.
This gas could mean a major lift for the state's economy, bringing royalties for families leasing their land to gas companies, more jobs and an increase in population, according to a forecast released in June by Penn State's Workforce Education and Development Initiative, a collaboration of the Outreach Workforce Assessment Center and the College of Education Institute for Research in Training and Development (IRTD)
For every $1 billion dollars in royalty income by Pennsylvania residents each year from 2008 through 2011, nearly 8,000 jobs will be created annually, disposable personal income will hover around $1 billion dollars annually and the population will increase by thousands each year through 2011, according to the forecast.
With energy prices continuing to rise, gas companies realized it is worth going after the gas bound up in the shale despite the high costs of drilling, said David Passmore, director of IRTD.
Drilling has only just begun over the last few months in the southwestern part of the state, Passmore said.
He added the exact amount of gas that can be extracted from the shale is still unknown, but despite that, the impact of the drilling will still be helpful for the economy.
The Marcellus shale covers almost 34 million acres of land in Pennsylvania, Engelder said.
Much of the area is lived on by Pennsylvania residents, and Penn State has taken an educational role in teaching residents how to handle leases and negotiations with the gas companies interested in drilling the shale, said Rose Baker, program manager for the Workforce Assessment Center.
Penn State's Workforce Education and Development Initiative has been holding meetings statewide to teach residents about negotiation rights, Baker said.
"Some people can be taken advantage of, so we make sure they know how to deal with the gas companies," she said.
Additionally, the leases deal with more than just money, Passmore said.
"There are regulations on how the land can be used, what can be built on it, and how the landowners' water can be used, " Passmore said.
Since the estimation of the large amount of gas in the Marcellus shale, interest by gas companies has skyrocketed, he said.
"Before the landowners working with the oil companies were only getting between $5 and $15 per acre of land, now they are getting about $2,700 per acre," Passmore said.
More than 14,000 people have attended the informational meetings in the last few months, and these same people have benefited by an estimate of more than $200 million through what they have learned from the meetings, said Thomas Murphy, educator with Penn State Cooperative Extension.
When the homeowners spend the royalty checks, more than $1.5 billion dollars could be put back into Pennsylvania's state economy, Murphy said.
"A rising tide floats all boats," he said. "The homeowners will benefit and those who don't have landholdings will benefit from the added jobs."
Baker said the added labor needs could also bring more residents into the state, which, in turn, will increase the state's revenue even more.
Apart from the royalties, drilling of the shale will also create many jobs for Pennsylvania residents, said Tim Kelsey, Penn State Cooperative Extension state program leader.
Drilling crews will be needed, and once the holes are drilled workers will be needed to monitor them. Besides the drilling crews, workers will also be needed to build pipelines from the holes made in the shale, Kelsey said.
"Texas has a similar shale, and it has produced more than 80,000 jobs for residents, it's a ball park [figure] for what can happen here [in Pennsylvania]," he said.
Economic studies show this could help shield Pennsylvania from economic problems if it is done correctly -- as long as the jobs are given to Pennsylvania residents, Kelsey added.
"This is definitely one of the bright spots," Passmore said. "It's definitely something positive for the state."
