Thursday, June 13, 2013

Important Facts: Shale Gas Royalties Total At Least $731 Million In PA But PA Job Creation Lags Anyway

The Allegheny Institute calculates royalties paid to Pennsylvanians with drilling leases at $731 million in 2012. That's a considerable sum but is 0.13% of all personal income in PA, a fact the paper notes too.

The paper assumes that the royalty percentage is 12.5%, and that might be a tad low for the average payment.  As such, the calculation of $731 million is not likely to be exaggerated.

The infusion of royalty income is concentrated in a few counties like Susquehanna, Bradford, and Washington, where royalty income skyrocketed and became an important part of the local economies.  While those local economies benefitted from this income boost, Pennsylvania's statewide job creation performance has not. 

Indeed, Pennsylvania has fallen from number 7 among the 50 states in job creation in 2010 to now the bottom 10 during the last year or so, even as total royalty income has surged.  Over the last 15 months, Pennsylvania has created very few jobs and is not even getting its share of the 2 million jobs per year that the national economy is creating now like clockwork.

A series of policy blunders by Governor Corbett in education, transportation, health care, and energy are more than enough to negate the positive impacts of national job creation and rising gas royalty income.

1 comment:

  1. I wonder why there is a low job creation in that area when a big amount is coming in terms of royalties. Sometimes it has something to do with the government not making the necessary efforts to materialize their programs and projects.