Marcellus Shale Play: A Case Study

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The Marcellus Shale Play is a black shale formation lying under the Appalachian Basin running from Tennessee to New York. The U.S. Energy Information Agency (EIA) estimates that 1,953 billion cubic feet of recoverable reserves lie beneath the shale sediment. (U.S. Energy Information Administration, 2012) The EIA estimates that shale basins in the United States have a potential to produce from 500-1,000 trillion cubic feet of natural gas (U.S. Energy Information Administration, 2012). Natural Gas production has risen so dramatically that the U.S. imports fell to just 4% of its energy consumption. The U.S. imported 16% in 2012 and 30% in 2005 (U.S. Energy Infomation Administration, 2014).
Until 2008 the Marcellus Shale Play was deemed unrecoverable. Advances in technology, namely hydraulic fracturing, or “fracking,” and increased demand, have made the Marcellus Shale Play a viable economic opportunity. In 2007, energy exploration companies began establishing a presence in the
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In 2006 Pennsylvania approved casino licenses with the intention to tax the proceeds at 55%, far above the industry average of 8%. Critics harpooned the heavy-handed approach and claimed the entire industry would collapse after the novelty was gone and the low tax Mecca of Atlantic City would reassert it’s dominate position. The State Senate believed a viable gambling market existed in the state and casinos would be apt to service them, even at 55%. The application process, while not entirely transparent, was extremely competitive. Even in a highly taxed and regulated environment, the gaming industry recognized an opportunity and seized it in 2006. In 2011, Pennsylvania took in $1.5 billion in tax revenue, ahead of 2nd place Nevada with $865 million. Atlantic City, fighting for its very survival, took in just $265 million. Almost 8 years later the health of the Pennsylvania Gaming Industry is thriving, even with a relatively less attractive tax

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