Editor & Publisher, Marcellus Drilling News (MDN)
Fracking makes all the difference for Pennsylvania farms; income generated from shale gas allows the farms to stay operational.
Some farms not only produce products like milk, meat, eggs and/or crops–some farms produce energy. Would it surprise you to learn that in 2014 (the most recent year with stats available), energy companies paid farmers a staggering $2.9 billion for the energy extracted from private farms?
The U.S. Dept. of Agriculture posted a brief blurb from their Amber Waves magazine yesterday, recounting stats from a report released last November. The report, “Trends in U.S. Agriculture’s Consumption and Production of Energy: Renewable Power, Shale Energy, and Cellulosic Biomass” points out it’s not just oil and gas extraction that farmers receive income from.
Some farmers lease their land for solar and wind generation. Some biomass. However, it was one particular chart and stat that caught our attention: About 9.6% of Pennsylvania farms received energy income in 2014. The average amount received, per farm? $157,000! Almost all of that revenue came from the Marcellus Shale.
Landowners can lease farmland for energy production, such as for oil exploration or wind turbines. For example, households that own the oil and gas rights for their property or for land in other States may lease these rights to an energy company. In 2014, the majority of income from royalties or leases associated with energy production was earned from selling or leasing these rights. In Oklahoma, Utah, and Kansas, about 20 percent of farms received income from energy production. In States with active development of shale oil or gas, about 12 percent of farms received an average income of $65,781 from energy production—compared with 6 percent and $56,162 for the entire United States. Average payments were highest in North Dakota ($157,000) and Pennsylvania ($154,000), mainly due to oil and gas drilling in the Bakken and Marcellus shales. Total payments from energy companies to farms reached $2.9 billion in 2014, up from $2.3 billion in 2011. This chart appears in the November 2016 Amber Waves article, “Share of Farm Businesses Receiving Lease and Royalty Income From Energy Production Varies Across Regions.”
The chart accompanying the post above:
Look at the chart, at PA and NY. NY actually has more farms that received energy income than PA (10.7% of farms in NY vs. 9.6% in PA). NY has a lot of old conventional/vertical only wells. However, look at the difference in the average amount of income from energy between the two. PA farmers received an average of $157,126, while NY farmers received an average of $4,371–and most of the NY revenue came from government handouts. That’s the difference between shale drilling and no shale drilling. What a shame! And what a sham.
We dug through the report to get the specific numbers that the chart above is based on. Here are those numbers, the detailed breakdown:
Here is a copy of the full report, from last November: