Gov. Corbett's address at Shale Gas Insight Conference
Address of Gov. Tom Corbett before the Shale Gas Insight Conference
Philadelphia, Pennsylvania, Thursday Sept. 20, 2012
This is a great time to be a citizen of Pennsylvania. We are creating jobs. We are building our future. I am convinced that we are beginning a New Industrial Revolution and that Pennsylvania’s energy sector is an irreplaceable part of that effort.
Let me explain why our energy sector matters.
When I leave office I want to say we have accomplished three things:
First, I want this state on a sound financial footing. No more deficits. No more accounting tricks. No more pushing obligations off onto the next generation. I want a state budget that delivers efficient, effective government and that respects our taxpayers.
Second, I want to be able to say that every Pennsylvanian who wants a job has a job. Economists might talk about an “acceptable level” of unemployment. Well if you’re out of work, that’s an unacceptable level. Every day I think in terms of how to change the system so that anyone who wants a job has one.
Third, I want every person in this state trained and educated for the jobs of this new century. We shouldn’t have to copy the successes of other states. I want other states to copy Pennsylvania’s success.
How does the Marcellus industry fit with these three goals? The numbers tell the story. Right now, nearly 240,000 Pennsylvanians work in the natural gas industry or in ancillary businesses up and down the supply chain.
Of that number nearly 30,000 Pennsylvanians work in the core Marcellus industry. They earn $30,000 a year more than the average Pennsylvanian. And their industry is creating jobs across the spectrum.
The Marcellus Shale gas play and the bounty that lies beneath it in the Utica Shale give our society a chance to advance and prosper. Now, note that I say “our society.” We have a culture here, not only of hard work but of strong beliefs.
We believe in education.
We believe in honesty.
We believe in personal freedom. We believe in stewardship.
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Those are core values in Pennsylvania. The Marcellus boom isn’t simply about advancing business. It’s about advancing society. It’s about creating the success for all of us. It’s about the commonsense idea that real prosperity comes from the private sector, not through government spending.
We aren’t yet where we want to be. The state budget remains starved by past overspending and haunted by the recession. But we are advancing, even in the face of an unreasoning opposition.
Our opponents agree that we can land a rover on Mars, but they can’t bring themselves to think that we can safely drill a mile into our own soil.
After all the predictions of disaster and the fearful warnings from people with no understanding of the industry, Pennsylvania is reaping a bounty.
Again, the proof is in the numbers:
For the past 18 months, our employment level remained above the national average. Private sector jobs have grown by 73,000.
Manufacturing is making a come-back.
We are re-industrializing regions once thought lost to overseas markets. And, yes we are generating revenue from regular taxes – billions in sales, corporate, and royalty taxes. And we have just taken in the first round of payments from our impact fee. We got that one right, too.
Last year at this time the opposition was fretting about the state’s failure to pass a $100 million dollar extraction tax. This year, the citizens of Pennsylvania collected twice that amount – all of it targeted to public services and protecting the environment.
So, in addition to the tens of thousands of jobs, I am here to say thank you to an industry that has added another $200 million to the common good. That’s the difference between throwing together a quick fix and planning for real progress.
The lesson in all of this is simple: people want and deserve good, family-sustaining jobs. And those jobs are found in the free market, not in government programs that push the same money around into different piles.
Marcellus has reached into some very old corners of our economy and brought them back to life. Last year around this time three refineries which have been part of Philadelphia’s industrial landscape for a century were about to shut down. Thousands of refinery jobs, and thousands more that depended on them, were at risk of vanishing.
Now, because of Pennsylvania’s new energy boom those refineries are experiencing a new role in making America energy rich, and our citizens gainfully employed. I can easily foresee a time when the Philadelphia refineries will be processing Marcellus gas from across the state.
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It makes too much sense not to tie the far corners of the state together in this work.
Already we are deepening and expanding the Port of Philadelphia. This will allow us to ship that product, and all the other products made with our natural gas, around the globe.
It is beyond belief that there are people who would trade this progress for a return to the old status quo.
We need people who understand that a business boom on one end of the state shakes the economy at the other end. Consider Matcor. They’re a company in Doylestown and they sell products and services to the energy industry. Jeff Stello, their CEO, tells us they have doubled in size, made new hires, and are about to move into a new, larger building. Almost three hundred miles away from the drilling fields, a company right here in the southeast is reflecting the economic progress of our energy industry.
As I traveled the state the past 18 months, I’ve seen dozens of Matcors. Some are small shops, begun in someone’s garage with nothing more than a great idea and a world of faith. Some are older, established companies that are branching out.
In Johnstown, for instance, JWF Industries, which works primarily in the defense sector, has expanded. They now provide storage tanks to the drilling industry. Engineering firms are expanding. Environmental companies are hiring. All of that development creates what economists call a “critical mass.” One business attracts another. Men and women working at a drill site stop at the convenience store for gasoline and a coffee. That store hires another employee to handle the increased business. That new employee has money to spend on everything from clothing to movie tickets. Eventually, word gets around that in Pennsylvania there is a supply of natural gas that costs a fraction of what energy costs in other places.
Manufacturers arrive and build plants. Companies that are already here expand their plants. Repeat this cycle across the state and you can see the economic value that this industry is adding.
For too long Pennsylvania lived on stories of old successes. The Marcellus industry is updating our history and mapping our future. So, really, we’re just getting started.
As you know, Shell Chemical is coming near a final decision on whether to build a petrochemical plant in the state’s southwest. This plant, which people call the “ethane cracker,” would mean an investment of between $4 billion and $6 billion dollars. There are a dozen of these plants in the United States and this would be the first in the northeast.
It would create as many as 10,000 construction jobs immediately. And, because we used our imaginations and chose to partner with industry, the wet gas harvested in Pennsylvania will be process in Pennsylvania.
Some of them are bound to be created here in the southeast.
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We are doing this strategically and with an eye not to the next two or four years. We’re doing this with a view to the decades ahead.
The Marcellus industry’s record has borne out almost every optimistic prediction. We predicted jobs, and the jobs are here. We predicted growth, and companies that never heard of Marcellus five years ago are now expanded. We predicted abundant energy, and projections are that lmost a third of our electricity will soon be generated using natural gas.
I don’t want to stop until the day I can pull my car up to a station along the Turnpike and fill up with Pennsylvania natural gas. I like that idea, because natural gas sells at one third the price of gasoline and, unlike gasoline, natural gas emits fewer hydrocarbons. Already, greenhouse gases have dropped by nearly 10 percent thanks to cheap natural gas now powering electrical generators.
This summer I visited a small park and museum in the town of Titusville, Pennsylvania. In a small clearing, more than a century ago, a man named Edwin Drake took a risk. He found backers, hired a crew, and started digging. They were only a few feet from giving up when oil poured out of the ground.
For the brief years before the oil boom spread to other states, Pennsylvania was energy capital of the world. Entire towns sprang up. One of them was named Pit Hole. It had seven hotels, shops, homes, its own newspaper, and the third-busiest post office in the state after Pittsburgh and Philadelphia. And just as suddenly as it appeared, that town was gone.
There are a few stones, overgrown foundations, and nothing else. Nobody planned around that amazing growth. Everybody lived in the moment, but never thought about the next step. It is written that where there is no vision, the people will perish. The same could be said for economies. We need a vision – one that ties this state’s future to an economy unshackled from needless regulation but which guards against the desolation of cut-and-run practices.
I am convinced that we are the beginnings of a New Industrial Revolution. It can bring us jobs and prosperity while protecting the landscape from damage. Pennsylvania is getting it right, and that means growing an economy with an eye – not to the next election cycle – but the generations beyond.
I am convinced that this generation of Pennsylvanians can complete the journey that Edwin Drake began.
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