NEW YORK--()--Kroll Bond Rating Agency (KBRA) releases report on the potential credit implications of fracking. The report is an update to KBRA’s report of January 27, 2012 – “Potential Impact of Natural Gas Fracking on Municipal Bond Issuers.” This update examines the proposed high-volume hydraulic fracking of the Marcellus and Utica Shale Basins, located below New York, Ohio, Pennsylvania, and West Virginia, as it relates to state and local credit risk.
“Potential Impact of Natural Gas Fracking on Municipal Bond Issuers.”
KBRA views the ongoing development of the Marcellus and Utica shale formations as having the potential to create a significant number of new jobs (direct and indirect), as well as improving economic conditions and tax revenues for the state and local governments that lie above the boundaries of the Basins. These improvements could support higher credit ratings for issuers in the affected areas, as they reflect key credit characteristics assessed by KBRA in its rating review for state and local governments.
Currently, Ohio, Pennsylvania and West Virginia support fracking and are in various stages of developing this industry. New York banned fracking in 2008 pending further analysis. Until there is more available information and experience in each of these states, KBRA cannot assess the impact fracking will have on state and local budgets. However, it will continue to monitor developments in the industry and take rating actions as appropriate.
If fully developed, these (recently economically) recoverable natural resources could represent in excess of $10 trillion in additional domestic economic activity, In addition, development of shale oil and gas could also allow the U.S. to greatly reduce its dependence on imported foreign oil and enhance national security.
To view the report, Fracking the Marcellus and Utica Basins: Potential Credit Implications, please visit www.krollbondratings.com.
About Kroll Bond Rating Agency
KBRA was established in 2010 by Jules Kroll to restore trust in credit ratings by creating new standards for assessing risk and by offering accurate, clear and transparent ratings. KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).