According to a report released in May 2017 by the American Chemistry Council (ACC), the Appalachian region of Kentucky, Ohio, Pennsylvania, and West Virginia is on its way to becoming a petrochemical and plastic-resin manufacturing hub. ACC projects the region will experience a $35 billion increase in investment spending and the addition of 100,000 permanent jobs by 2025. All this is due to the hydraulic fracturing, commonly called “fracking,” revolution, which has made the region’s massive shale gas deposits available for development.
Of the 100,000 new jobs that are projected, 25,000 are in “chemical and plastic products” manufacturing, 43,000 in “supplier industries,” and another 32,000 are in “‘payroll-induced’ jobs in communities where workers spend their wages.” The study also estimates federal, state, and local tax revenues would increase by $2.9 billion over the same period.
“The Appalachian region has distinct benefits that could make it a major petrochemical and plastic resin-producing zone,” said ACC President and CEO Cal Dooley in a press release accompanying the study. One of these benefits being its “proximity to a world-class supply of raw materials from the Marcellus/Utica and Rogersville shale formations.”
A paper from the National Bureau of Economic Research (NBER), also released in May 2017, has found “the fracking boom of the post 2005 period led to sizable improvements in the earnings potential of non-college educated men in counties located over geological shale plays.” Specifically, $1,000 per capita of fracking production causes a 6 percent increase in average earnings for males employed outside of the oil and natural-gas industries, including a 2.9 percent increase for non-college-educated men, as well as a 2 percent increase in the total number of jobs for both college-educated and non-college-educated men.
The NBER report reinforces the findings made by researchers from the University of Chicago, Princeton University, and Massachusetts Institute of Technology (MIT) in 2016. In their study, communities near shale basins were examined, and the researchers found hydraulic-fracturing activity brought $1,300 to $1,900 in annual benefits to local households, including “a 7 percent increase in average income, driven by rises in wages and royalty payments, a 10 percent increase in employment, and a 6 percent increase in housing prices.”
According to Heartland Policy Analyst Tim Benson’s recent Research & Commentary on hydraulic fracturing, the fracking process has transformed the energy outlook of the United States over the past decade, and the rise of shale gas as a replacement for coal has been primarily responsible for the “United States now enjoying its lowest level of carbon-dioxide emissions since 1989. According to the U.S. Energy Information Administration (EIA), fracking now accounts for 51 percent of all U.S. crude oil production. EIA also estimates the continuing switch of electricity-generation fuels to fracking-produced natural gas is responsible for 63 percent of the drop in U.S. energy-related carbon-dioxide emissions over the past decade.”
Of course, the benefits of fracking, including those projected by ACC in its study, can only exist if the fracking industry is protected from misguided and shortsighted attempts to ban it or overregulate it out of existence – attempts based completely on unscientific claims about fracking’s alleged environmental dangers.
What We’re Working On
Budget & Tax
Research & Commentary: Michigan Considers Moving to 401(k)s for Teachers
In this Research & Commentary, Senior Policy Analyst Matthew Glans examines a proposed pension reform plan in Michigan that would move all new teachers to a 401(k)-style defined-contribution plan. “Michigan’s effort to move state workers into a defined-contribution pension plan is an important step toward solidifying the state’s financial future. Defined-contribution plans give retirees direct control over retirement and make it possible for them to move in and out of the private sector without losing their accrued pension benefits. This allows governments to budget more accurately, because benefits are paid directly to employees and are firmly set each year,” wrote Glans. Read more
Education
Research & Commentary: Special-Needs ESAs Would Be a Great First Step for Maine
In this Research & Commentary, Policy Analyst Tim Benson writes about a proposal in Maine that would establish an education savings account (ESA) program for students with special needs. Under the program, ESAs could be used to pay for tuition and fees at private and parochial schools, as well for textbooks, tutoring services by a certified teacher, online courses, educational therapies, and transportation costs. Additionally, ESAs could be used to cover the fees required to take national standardized achievement tests, such as the SAT and ACT. Benson writes that legislators should give serious consideration to what ESAs could mean for families with disabled children, as it would give more Maine families a greater opportunity to meet each child’s unique education needs. Read more
Energy & Environment
Research & Commentary: Peer-Reviewed Study Says Hydraulic Fracturing Not Responsible for Groundwater Contamination in West Virginia
In this Research & Commentary, Policy Analyst Tim Benson writes about a new peer-reviewed study led by researchers at Duke University that found hydraulic fracturing, commonly called “fracking,” has not led to groundwater contamination in 112 drinking-water wells in Tyler and Hall Counties in northwestern West Virginia. Benson notes the existing peer-reviewed evidence, which this study adds to, shows hydraulic-fracturing processes do not have a systemic impact on groundwater. Benson writes since 2010, at least 18 of these studies have been produced, and they’re reinforced by the Environmental Protection Agency’s own $29 million, six-year study of fracking’s impact on groundwater sources, which failed to find any systemic impact caused by the 110,000 oil and natural gas wells that have been in use across the country since 2011. Benson notes drilling is currently being conducted in hundreds of locations in West Virginia in a safe and responsible manner, and federal, state, and local governments have tested thousands of sites nationwide for fracking-linked pollution of groundwater or drinking-water resources, as well as for air-quality issues. He argues there is no scientific justification for banning hydraulic fracturing or overregulating it out of existence. Read more
Health Care
Heartland Daily Podcast: Dr. Stryker, Dr. Bizier: Let Doctors and Patients, Not Insurers, Decide Treatment
In this edition of the Heartland Daily Podcast, two doctors describe an incident in which a government official without medical training relied on information from Wikipedia to let insurers deny a patient treatment recommended by her physicians. Read more
From Our Free-Market Friends
1.8 Million Illinoisans are Dependent on Food Stamps
In this report from the Illinois Policy Institute, Brendan Bakala analyzes data from the Illinois Department of Human Services. Bakala found the number of Illinois residents enrolled in the Supplemental Nutrition Assistance Program, commonly called “food stamps,” increased by more than 15,000 from March 2016 to March 2017, while the number of recipients in Indiana decreased by more than 9 percent during the same period. Bakala argues Indiana’s economic success comes from its pro-growth policies, including its right-to-work law. Read more
