After experiencing years of energy shortage in the U.S., there is a lot of excitement about the recent development of horizontal drilling and hydraulic fracturing   as new source of energy. There appears to be a large reserve of Marcellus Shale natural gas deposit beneath the Appalachian mountains in West Virginia and surrounding areas in the north. Some studies have estimated the recoverable reserves to be approximately 500 trillion cubic feet (TCF), worth trillions of dollars. The discovery of a large volume of “dry†gas which is used in homes and businesses has resulted in a glut of available natural gas. Substantial investment has been made into the Marcellus area in Pennsylvania and West Virginia.

Our study will analyze the economic impact of Marcellus related activities on the economy of Pennsylvania. New technological advances in the Marcellus Shale drilling process has increased the average production of natural gas by nearly 75 percent.  This production of natural gas has created over 24,000 jobs in Pennsylvania and is likely to increase tax revenues for local, state and federal governments significantly.  Low cost natural gas can attract manufacturing industries to Pennsylvania in the near future.  However, there is concern about the contamination of ground water wells from hydraulic fracking.  Our research will explore these and related issues.