Many Pennsylvanians are aware of the recent surge in natural gas leasing activity.
The vast majority of citizens, however, do not fully appreciate the scale of change such
development will unleash. This report educates the public on the current size, economic
impacts, and future prospects of the Marcellus shale gas industry in Pennsylvania.
The Marcellus shale is the largest unconventional natural gas reserve in the world.

While reserve estimates should be considered somewhat uncertain at this early stage, as
each new Marcellus well is completed, estimates of recoverable reserves of at least 489
trillion cubic feet seem increasingly reasonable. The market and strategic value of the
Marcellus Shale will no doubt grow as conventional natural gas reserves are depleted and
our economy adjusts to a path with lower greenhouse gas emissions. Natural gas has
considerably lower carbon content than petroleum and coal. The market share of natural
gas in electric power generation continues to expand and opportunities for switching from
petroleum to natural gas beckon in the transportation sector.

This study finds that the Marcellus gas industry in Pennsylvania generated $2.3
billion in total value added, more than 29,000 jobs, and $240 million in state and local
taxes during 2008. With a substantially higher pace of development during 2009,
economic output will top $3.8 billion, state and local tax revenues will be more than $400
million, and total job creation will exceed 48,000.

Advances in drilling technology and highly productive wells make the Marcellus
play very attractive. This study finds that activity in the Marcellus will continue to
expand. Natural gas production from the Pennsylvania Marcellus could rise to almost 4
billion cubic feet BCF per day by 2020. The direct spending by Marcellus producers to
support drilling operations and the royalty and other payments to land owners will
stimulate business activity throughout the economy and induce households and
businesses to spend earnings on additional goods and services. This study finds that the
Marcellus industry could be generating $13.5 billion in value added and almost 175,000
jobs in 2020. The present value of additional state and local taxes earned from Marcellus
development between now and 2020 is almost $12 billion.

Timothy Considine, Ph.D., M.B.A.