How The Natural Gas Boom Has Changed The Lives Of Residents Of Rural Pennsylvania

jim grim

After more than four years America’s shale gas boom remains on full blast.  

Last year, production reached a new record high of almost 30 trillion cubic feet, an increase of 5% over 2011.

That follows increases of 7.4% in 2011 and 3.4% in 2010.

The boom has helped send natgas prices plummeting, which has lowered electricity costs and allowed certain energy-intensive industries like petrochemicals and steel to expand.

But what’s the boom been like for residents living in the middle of it?

We recently traveled to rural Susquehanna County, Penn. and its largest city, Montrose, to see up close what being at the heart of America’s shale gas boom does to your way of life.

It’s complicated.

Some people now make lots of money, and jobs have been created or saved (a local cabinet manufacturer, for instance, had been teetering on bankruptcy before gas money moved in).

But there were some undeniable costs. Trucks are everywhere in what had previously been a mostly quiet corner of the Keystone State. 

Then there are the complaints from residents who say fracking activity has contaminated their water.

We won’t get into those claims here, except to note that a judge recently found strong evidence they were true for at least one family, while others who sued Cabot have since settled.

No one we spoke with who had wells on their property have seen water problems, though as you’ll see, they voiced other concerns.

Our main takeaway: the shale gas boom is a lot more complex than you may think.

Susquehanna County is just a few hours' drive from the heart of Manhattan. But it feels way further. You're just as likely to see cows as people out here.

Jim Grimsley and his wife Annie, have a well in their backyard. A Queens native, Grimsley moved to Susquehanna eight years ago after he retired. That was well before the gas boom.

He said the royalties he gets are less than he'd prefer — he admits they were pretty clueless about negotiating for them and wishes he'd gotten a more fruitful deal — but they have been able to add furnishings to his kitchen. Their water remains uncontaminated.

However, traffic has gotten a lot worse, he said. Annie will no longer cross the road to pick up their mail. Here is that road, Route 29.

And as we mentioned, some in the area have complained of water quality problems. In 2009, three dozen families sued Cabot. Last year, many settled.

Source: Times-Tribune

Drive 15 minutes up Route 29, and you find yourself in downtown Montrose, home of abolitionist William Jessup and New York Giant Chris Snee.

Gas in on everyone's mind here.

None more so than Bill Kelley, proprietor of an equipment rental service. Kelley says his business has grown 40% each year since the industry moved in.

And here is the aforementioned Inn at Montrose. They've been able to renovate their rooms and boost rates as more gas workers began taking up residence there.

Really, anyone in the service industry is seeing a windfall. Here's Jay Agkinson, who runs the Shell station downtown. He said service stations in town can look like truck rallies at peak fueling hours.

We actually had to stop our interview with him multiple times so he could pump for the rush incoming cars. They keep it old school out here.

But there's the rub. All the new commerce has upended the quiet if mundane way of life here.

Kathy Prusack has lived here with her family and children for 22 years. Her son is now employed as a driver for a gas industry contractor, and she collects a modest amount of royalties from the new wells on her property.

From an economic perspective, it is tempting to ignore or dismiss the complaints, because they affect so few. Montrose has only 1,600 people, and Susquehanna County is among the least-dense in the state. Meanwhile, according to one tally, the county's received $300 million in royalties.

Source: EID Marcellus

But the costs are very real for those who do live here.

As you have now seen, deciding whether they outweigh the benefits is something residents here will continue to struggle with.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.