Newsletters

March/April 2005

Inside This Issue:

Reviving Pennsylvania's Oil and Gas Industry
Data Anyone? Center’s Database Has Everything Rural
Chairman’s Message
Center’s Board Welcomes Dr. John Halstead, Elects Officers
Housing Trends in Rural Pennsylvania
Rural Issues Forums Begin March 30
Rural Works: Rural Students Take Advantage of a Monster Learning Opportunity
Persistent Poverty: An Issue for Some Municipalities
Just the Facts: Snack Time
Did You Know. . .

Oil and natural gas were first commercially produced in northwestern Pennsylvania in the mid-19th Century, giving rise to the modern petroleum industry and consequently changing the world forever.

While no longer a leader in the industry, western Pennsylvania remains an attractive and viable source for natural energy production in the eastern United States, according to research sponsored by the Center for Rural Pennsylvania. If addressed properly, this advantage could potentially improve Pennsylvania’s position in the industry.

In 2004, Dr. Robert Vargo and a team of researchers from California University of Pennsylvania completed a study that examined issues that could potentially affect the oil and gas industry in Pennsylvania. As a first step, the study group analyzed data obtained from state agencies to examine trends in both oil and gas production within the Appalachian Basin. The researchers also investigated other measures of vitality that affect the oil and gas industry of the Appalachian Basin, using data from state geological surveys and industry project partners.

Among the conclusions gleaned from the research was that Pennsylvania still maintains a vast number of potential reserves but for many reasons they have been left largely untouched in Pennsylvania.

The state maintains several strategic advantages including that of a well-established pipeline network that transports oil and natural gas not only from other parts of the Appalachian Basin, but also from other parts of the country. This network is significant in that it enables Pennsylvania to distribute its own energy at little to no cost, enabling it to take advantage of this valuable commodity. With today’s high energy costs, it may be time to examine whether updated drilling technology, management practices, and innovative practices may make the oil and gas industry attractive once again.

The research team offered several policy considerations that might be pursued to encourage the resurgence of this industry.

The considerations include:

reimplementing federal tax credits on production;
expanding royalty-in-kind programs to allow businesses and public institutions to take advantage of lower energy costs;
examining abandoned oil and gas wells in Pennsylvania to determine the economic feasibility of re-opening them, using updated and more cost efficient modern technologies;
marrying enhanced recovery technologies and carbon dioxide sequestration from state industries that emit CO2; and
encouraging reservoir management practices to increase the long-term output of oil and gas reserves.

For a copy of the report, An Examination of Pennsylvania’s Oil and Gas Industry, call the Center for Rural Pennsylvania at (717) 787-9555 or email info@ruralpa.org.

Note: Soon after the research was completed, Dr. Robert Vargo passed away on January 9, 2004. The Center for Rural Pennsylvania’s Board of Directors and staff would like to acknowledge the work of Dr. Vargo, and thank his family, his graduate student, Kenneth L. Frye Jr., and California University for completing the written report that provided details about the research project and results.

Population data by township. The top employers in every county. The number of rural nursing homes in Pennsylvania. These are just some of the data the Center for Rural Pennsylvania staff provides to the General Assembly and the public on any given day. Most of the data requests are from those who know that the Center maintains the most comprehensive statewide database on rural trends and conditions.

The Center started building its database in 1987, the year it was created by Act 16 of 1987, the Rural Revitalization Act. As an affiliate of the U.S. Census Bureau through the Pennsylvania State Data Center, and through data sharing with many, if not most, state agencies, the Center has a host of information to share. Information from our database is available to members of the Pennsylvania General Assembly, state and local government officials and employees, community organizations, educational institutions, businesses, individuals and the media.

If you’re looking for data, especially as it relates to rural Pennsylvania, visit the Center’s website at www.ruralpa.org and check out the demographics pages. Our website now offers the option of comparing the demographics of two counties, side-by-side. There’s also a new option to compare specific demographic information, such as median household income or poverty rates, among all 67 counties.

And remember, if you don’t find what you're looking for on our website, call the Center at (717) 787-9555 or email info@ruralpa.org for your specific data requests.

It’s always a pleasure to welcome new members to the Center for Rural Pennsylvania’s Board of Directors. Even though we’ll miss the contributions of former board member Dr. Craig Willis of Lock Haven University, who retired, we are pleased to announce that Dr. John Halstead, president of Mansfield University, has been appointed to the board as a representative of the Pennsylvania State System of Higher Education. It was apparent during his first board meeting earlier this year that Dr. Halstead will bring expertise and enthusiasm to the Center’s work on rural issues in the Commonwealth. Welcome, Dr. Halstead.

An important part of Pennsylvania’s trail of history is highlighted in our cover photograph of the Drake Well. Visitors to this historic site in western Pennsylvania gain a better appreciation for the industrial heritage that has helped Pennsylvania become a leader among states throughout the years. These parks help us remember the pioneers who harnessed the Commonwealth’s natural resources to harvest lumber, coal, oil or agricultural crops from the soil. Our leadership position in the field of energy does not have to be a past memory, however.

According to research sponsored by the Center for Rural Pennsylvania and conducted by Dr. Robert Vargo of California University of Pennsylvania, Pennsylvania still has the potential to be a viable player in the production of natural energy. As reported on page 1, Pennsylvania maintains a vast number of potential gas and oil reserves and has a well-established pipeline network. If addressed properly, this advantage could potentially improve Pennsylvania’s position in the industry, according to the researcher. With ever-increasing gas and oil prices, it may be time for Pennsylvania to once again focus attention on this segment of the energy industry.

The costs of higher education continue to climb, despite the record levels of state financial support for students and universities. What can young people and their parents do when the cost of college seems out of reach? For rural children, a Monster is extending a helping hand and playing a lead role in helping kids do their best and achieve their potential. For the past five years, the McKelvey Foundation, which was established by Monster.com founder Andrew McKelvey and Dena McKelvey, has offered scholarships to rural high school seniors and graduates who need support to attend college. The first group of students who received scholarships from the foundation is now in their final semester of college. Read more about this scholastic opportunity, which is part of our Rural Works series, on page 5. Our thanks and best wishes go out to the McKelveys and all of the young entrepreneurs who are beneficiaries of this couple’s generosity and support.

As I wrap up this Chairman’s Message, I am rewarding myself with one of my favorite snacks, honey-mustard pretzels. I am pleased to support Pennsylvania’s snack food industry and help maintain our leadership position in producing the taste tempting treats we all love to indulge in between meals. Popcorn, potato chips, ice cream and candy sales help keep our Commonwealth’s top ranking as a capital snack food manufacturer and supplier. So toss any guilty feelings aside and tear open another bag or box for a delicious tribute to Pennsylvania agriculture and its snack food industry. You have our approval as long as you see the “Made in PA” on the label.
Have a great spring.

Representative Sheila Miller

At its February board meeting, the Center for Rural Pennsylvania’s Board of Directors welcomed its newest member, Dr. John R. Halstead, president of Mansfield University.

Previous to his 1998 Mansfield appointment, Dr. Halstead served as Vice President for Student Affairs and Cooperating Associate Professor of Education at the University of Maine. He has also held the offices of Vice President for Student Life at Gonzaga University, Assistant to the Vice President for Student Services at Ohio State University, and Assistant Dean of Students at the College of the Holy Cross.

Dr. Halstead earned a doctorate from Ohio State University, a master's degree from Michigan State University, and a bachelor's degree in sociology from Colgate University. In addition, he has completed Harvard University’s Institute for Educational Management.

He currently chairs the Policies and Purposes Committee, and has served on the Nominations, Professional Development, and Presidential Academy Committees of the American Association of State Colleges and Universities.

He also chairs the Commission of Presidents of the Pennsylvania State System of Higher Education and serves on the Tioga County Development Corporation Board and the Betterment Organization of Mansfield.

At the meeting, the board also elected officers for the 2005-2006 legislative session. The board reelected Representative Sheila Miller as chairman, Senator Mary Jo White as vice chairman, Representative Mike Hanna as treasurer and Dr. C. Shannon Stokes of Pennsylvania State University as secretary.

Homeownership rates across the nation have increased since 1990, according to the U.S. Census Bureau. In 2004, the national homeownership rate was 69 percent, while in 1990 the rate was 64 percent.

To learn more about housing, specifically housing units and housing affordability, in rural Pennsylvania, the Center for Rural Pennsylvania explored data from the U.S. Census Bureau and other sources.

For the analysis, the Center for Rural Pennsylvania classified rural Pennsylvania as the counties in which the Census 2000 population density was less than the statewide figure of 274 persons per square mile.

Housing units
As of Census 2000, there were more than 1.5 million housing units in rural Pennsylvania, 86 percent of which were occupied. One quarter of occupied units were rented, resulting in a rural home ownership rate of 75 percent.

The number of housing units in the Commonwealth’s rural areas has increased significantly over time, growing more than 7 percent since 1990 and 94 percent since 1940. During the same 60 years, the population grew only by about 12 percent. And, until the most recent decade, housing growth far outpaced population growth in raw numbers as well. Even from 1990 to 2000, this was true for half of Pennsylvania’s rural counties.

Three in four of the 1.5 million housing units in rural Pennsylvania are single-family house structures while 14 percent are multi-unit buildings and 11 percent are mobile homes.

Of the nearly one million owner-occupied rural units, 42 percent are valued between $50,000 and $100,000. About 26 percent are below that level and 36 percent are above. Just 10 percent of owner occupied units in rural counties have values of $200,000 or more.

Costs and affordability
According to Census 2000, the average gross rent in rural Pennsylvania was $413 per month. Gross rent includes contract rent plus estimated utility and fuel costs. Eight percent of rural renters pay less than $200 per month while 30 percent pay between $200 and $400. Nearly 10 percent pay $700 or more per month.

Average monthly costs for homeowners are divided into two categories: those with a mortgage and those without a mortgage. Rural homeowners with a mortgage represent 61 percent of all rural homeowners and pay an average of $936 in monthly housing costs – 12 percent pay less than $500 and 34 percent pay more than $1,000. Homeowners without a mortgage pay an average of $293 with nearly 60 percent paying less than $300 and just 6 percent paying $500 or more.

Overall, the average rural Pennsylvania renter pays 18 percent of household income for rental costs. The average homeowner with a mortgage pays 20 percent of household income for housing costs and the average without a mortgage pays 9 percent.

In the housing community, affordable housing is usually understood to be housing that costs no more than 30 percent of household income. Numbers computed using this definition are not hard and fast, however, because household size and total household income, which were not considered here for lack of data, and the percent of household income are factors in affordability.

In terms of affordability, data on renter and most owner-occupied households are only available for “specified” units, according to the Census Bureau. Specified owned units exclude mobile homes, homes with a business, those on 10 or more acres, and multiunit buildings. Specified rental units exclude single-family units on 10 or more acres. According to this data, one-third of rural Pennsylvania renters do not have affordable housing.

One-quarter of homeowners with a mortgage and 10 percent of those without also do not live in affordable housing. This amounts to a total of 254,673 rural households that lack affordable housing, according to the 30-percent-of-income definition.

Of rural households without affordable housing, 40 percent, or 100,892 households, pay more than half of their income in housing costs. This accounts for 16 percent of renters, 9 percent of mortgaged homeowners, and 4 percent of homeowners without a mortgage.

More info
For the complete fact sheet, Housing Trends in Rural Pennsylvania, call the Center for Rural Pennsylvania at (717) 787-9555 or email info@ruralpa.org.

The Pennsylvania Rural Development Council will be holding Rural Issues Forums across the state beginning March 30. The forums will give rural citizens the opportunity to provide input on rural issues, such as health care, economic development, housing, telecommunications and education. The information received from participants will be used by the council to help ensure that state programs and policies are designed and implemented in ways that are inclusive of rural communities and residents. The locations and dates of the forums follow.

Kennett Square, March 30
Chambersburg, March 31
Uniontown, April 20
Clarion, April 21
Williamsport, May 4
Stroudsburg, May 18
Bradford, June 1

For more information, call the Pennsylvania Rural Development Council at (717) 772-9030 or email ruralpa@state.pa.us.

This article is part of a series that demonstrates how communities are tackling issues at the grassroots level in rural Pennsylvania. The projects and programs highlighted in the series cover a wide range of issues, from health and education to community building, telecommunications and financing. Thanks to those who shared the details of their projects with us. Now, we can share them with you so that we can all learn how rural works in Pennsylvania.

Their minds manufacture endless lists of possibilities while their hearts hold the promise of unchallenged dreams. They are Pennsylvania’s entrepreneurial rural youth—and an entrepreneur of Monster proportions is helping them test the possibilities and live the dreams by sending them to college.

Andrew McKelvey, founder of Monster.com and a former Pennsylvanian, and Dena McKelvey, his wife, began the McKelvey Foundation in 2000 with a unique angle on college scholarships. Rather than give scholarship money to students who already had the means and intent to go to college, the foundation split its efforts between “second-chance” college-goers and low-income, high academic achievers.

“Five years ago, we got a call from the McKelveys, who asked if we’d like to help give out scholarships to rural kids,” said Arnold Hillman of Bright Futures Unlimited, a consulting and advocacy firm for rural issues. Hillman and Carol, his wife, said yes to that proposition and now help administer the McKelvey scholarships, which are granted to students in small, impoverished rural high schools in Pennsylvania, West Virginia and New York.

The foundation established partnerships with a group of select high schools, which must agree to participate fully in the scholarship program by holding educational assemblies and field trips to colleges, nominating current students, and helping to find recent high school graduates who are good candidates to go to college.

The scholarship recipients must go to a college that partners with the McKelvey program. These selected colleges are meant to maintain the kind of supportive atmosphere the students had in high school.

“The difference between all other programs and us is that we continue on with the kids and give them help throughout their college careers,” Hillman said. “The sixteen students who received scholarships in the first year are into their senior year of college now, and we’ve had zero dropouts.”

Applicants must complete essays demonstrating their entrepreneurial spirit, and according to Hillman, the essays received by the foundation are often inspiring and heartfelt, as some students describe how they started their own businesses, devoted their talents to community service, or baby-sat to help support the family.

The bronze-level scholarships of $3,000 annually are typically available to young adults who have graduated from high school and have been identified as capable of succeeding in college, but who don’t have plans to go. Recent high school graduates are also eligible. “This scholarship allows kids who are two or three years out of high school and wishing they’d gone to college to actually do it,” Hillman said.

The gold-level scholarships of up to $10,000 each year are typically for high school seniors looking to go to college. Recipients of the scholarship must mentor bronze scholars, and participate in community service and work-study programs during their college years. They receive a laptop computer and printer for use during college; gifts they keep if they graduate. Parents of scholars are expected to reach out to other parents in the community with help and support for the next class of applicants.

According to Andrew McKelvey, “No child in America capable of going to college should be denied that opportunity due to lack of funds.” Because of this belief, and the work of rural high schools and colleges, some lucky rural Pennsylvania students are able to take the money—and the initiative—and run, straight into the future.

The Rural Works Breakdown: McKelvey Foundation Scholarships
Goals: Offer young rural entrepreneurs the benefits of a college education without the burden of debt; encourage second-chance students to attend college

Funding and In-Kind Support Sources: McKelvey Foundation, started by Andrew and Dena McKelvey in 2000.

Manpower: Dena McKelvey is the foundation’s president; foundation staff coordinates the scholarship program; active planning is undertaken by partnering high schools and colleges

Measurable Outcomes: From September 2000 to September 2005, 500 students in three states will have received McKelvey scholarships; the foundation is increasing scholarships annually with a goal of funding 1,000 students

Challenges: Building and maintaining relationships with partner schools and colleges; encouraging students who may not otherwise enroll to attend college

Advice for Replication: Requires financial resources and commitment from participating rural schools and colleges

Contact Information: Visit the foundation website at www.mckelveyfoundation.org or call Arnold Hillman at (717) 731-6220

The U.S. Department of Agriculture’s Economic Research Service (ERS) has identified 382 persistent poverty counties nationwide. In these counties, at least 20 percent of the population have been below the poverty threshold for three decades as measured by four consecutive decennial Censuses. These counties are located primarily in the south and have different demographic and socio-economic characteristics than their wealthier counterparts.

While no Pennsylvania county meets the ERS criteria, certain areas of the state have been persistently poorer than others. To examine these areas more closely, the Center for Rural Pennsylvania looked at characteristics of rural municipalities with poverty rates above 15 percent from 1979 to 1999 (Censuses 1980, 1990 and 2000). Only three censuses were used because poverty data was not reported for municipalities prior to the 1980 Census.

Persistent poverty is an issue for 131 Pennsylvania municipalities: 23 of which are cities, 57 boroughs, and 51 townships. Of the total, 58 percent or 76 municipalities are rural*, which means that about 5 percent of the Commonwealth’s 1,656 rural municipalities are persistent poverty municipalities.

Persistent poverty is not a regional phenomenon, since these municipalities are geographically dispersed throughout rural Pennsylvania in 27 of the 48 rural counties. These municipalities, however, are different from their non-poverty neighbors in other ways.

Demographics
Pennsylvania’s rural persistent poverty municipalities typically are smaller in population and in land area than other rural municipalities of the state, averaging 1,336 people and 20 square miles compared to 1,759 people and 23 square miles.

Rural persistent poverty municipalities have grown in population much more slowly than the rest of rural Pennsylvania: less than 1 percent as compared to 11 percent from 1980 to 2000.
Age is similar in poverty and non-poverty areas. However, the percent of the population who are children is decreasing in rural persistent poverty areas and growing in the rest of rural Pennsylvania.

Socioeconomics
Rural persistent poverty municipalities had a per capita income of $14,058 in Census 2000, more than $4,000 lower than the rest of rural Pennsylvania. And a much higher percentage of households had incomes below $25,000.

Twenty-nine percent of the population did not graduate from high school while fewer than 10 percent of the population have a college education. In the non-persistent poverty municipalities, 19 percent did not finish high school and more than 14 percent have college degrees.

In rural persistent poverty municipalities, 56 percent of the population age 16 and older participate in the labor force and, of those, 7.1 percent are unemployed. In non-persistent poverty municipalities, the labor force participation rate is 63 percent and the unemployment rate is 4.6 percent.

Other Considerations
Homeownership rates are much lower in rural persistent poverty municipalities, at 77 percent, than in the balance of rural areas (84 percent). Fewer homes are single-family, stand-alone units in persistent poverty areas (71 versus 77 percent).

Housing in persistent poverty areas is older and of poorer quality. Nearly one-quarter of the units were built before 1940 and well over half were built before 1970. About 5 percent have incomplete plumbing facilities and about 5 percent have incomplete kitchen facilities. In the rest of rural Pennsylvania, only about 3 percent have each of these deficiencies.

Workers in persistent poverty municipalities have a longer commute to work, traveling more than 28 minutes. Workers in non-persistent poverty municipalities travel 26.5 minutes.

Rural persistent poverty municipalities have much lower revenues, taking in an annual average of about $343,000 each, compared to $525,000 in other rural areas.

More Information
For the complete fact sheet, Persistent Poverty: An Issue for Some Pennsylvania Municipalities, call the Center for Rural Pennsylvania at (717) 787-9555 or email info@ruralpa.org.

Pennsylvania’s Rural Persistent Poverty Municipalities, 1979-1999

Note: Rural municipalities are those whose Census 2000 population density is below the statewide figure of 274 persons per square mile and those with total populations less than 2,500, unless located in an urbanized area as defined by the Census Bureau.

Nationally, Pennsylvania is a player in the snack food industry. According to the U.S. Census Bureau, in 2002, Pennsylvania housed 224 snack food and confectionary manufacturers, which employed more than 22,000 employees — more than any other state. The combined sales of these Pennsylvania-based snack food companies were more than $7.1 billion, or 12 percent of the nation’s total.

These manufacturers, many of which are located in the south central and south eastern regions of the state, produce a wide variety of potato chips, pretzels, popcorn, candy, and ice cream. Interestingly, 60 percent of these companies are quite small, each employing fewer than 20 workers.

Pennsylvania has a long tradition of producing snack foods. A recent survey of the industry by the Pennsylvania Department of Agriculture, Kutztown Small Business Development Center and the Center for Rural Pennsylvania found that 56 percent of these companies were more than 50 years old.

The survey also found that 61 percent of the companies market their product within the state and the mid-Atlantic region. Twenty-three percent also market their products nationally, and 16 percent market their products internationally. More than 75 percent of the companies surveyed expect their sales and profitability to increase in 2005, and 47 percent expect to hire additional employees.

Urban areas have three times as many computer and software stores than rural areas. In 2002, urban areas had 351 computer and software stores, while rural areas had 111.
Rural areas have more car washes than bookstores. In 2002, there were more than 131 car washes and 117 rural bookstores.
It is easier to find a used car in rural areas than in urban areas. In 2002, rural areas had 12.8 used car dealers per 100,000 residents, while urban areas had only 8.9 per 100,000 residents.

Source: 2002 County Business Patterns, U.S. Census Bureau

Newsletters

March/April 2005

Reviving Pennsylvania's Oil and Gas Industry

Data Anyone? Center’s Database Has Everything Rural

Chairman’s Message

Center’s Board Welcomes Dr. John Halstead, Elects Officers

Housing Trends in Rural Pennsylvania

Rural Issues Forums Begin March 30

Rural Works: Rural Students Take Advantage of a Monster Learning Opportunity

Persistent Poverty: An Issue for Some Municipalities

Just the Facts: Snack Time

Did You Know. . .