PBT Transcript (7/07/2008)

MIKE ARMSTRONG: Coming up, High energy prices have drillers looking everywhere, including Pennsylvania. We’ll tell you what’s causing a land rush in the northeastern part of the state. Plus, two health insurers have the urge to merge, but what does it mean for competition in the health insurance markets. And young and old love the Jersey shore, but we’ll tell you why many are picking up a paycheck instead of catching rays. Philadelphia Business Today starts now.

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MIKE ARMSTRONG: Pennsylvania was the birthplace of the oil industry, but it’s been a long time since drillers fought over land here. Well, they are now, but they’re drilling for natural gas, not oil. The State sits on top of a rock layer called Marcellus Shale, believed to contain at least $168 trillion cubic feet of gas. That’s trillion with a T. And one trillion cubic feet of gas can heat 15 million homes for a year. Drillers are paying more than $2,000 an acre to lease land. Last summer it cost them 50 dollars. Now, only about 10% of that gas is recoverable, and there are other hurdles. A shortage of drilling rigs, pipelines, and environmental rules are a lot tougher now than when Colonel Drake hit his gusher in 1859.

For more than a year, insurers Highmark and Independence Blue Cross have been talking about their plans to merge. They say they need to in order to cut costs. But competitors fear they’ll get cut out of the picture. A merger between the two big insurers would mean they’d control more than 15% of the state’s health insurance market. Highmark and Independence Blue Cross say they would make a winning combo, and could compete better against bigger, for-profit insurers like United Health and Aetna. Does bigger mean better? We’ll see, as public hearings on the proposed merger begin in Pittsburgh on Tuesday.

Those teens and retirees you see at the Jersey Shore this summer might not be there for fun in the sun. The sour economy has hit locals hard, forcing both young and old to take jobs at the shore. These are jobs typically filled by an influx of foreign workers, but fewer foreign visas were issued this year. By some estimates they’re down 30%. So seniors and teens are easing that staffing crunch, although the beach just isn’t the same when you’re there punching a time clock.

That’s it for today. At the Inquirer, I’m Mike Armstrong for Philadelphia Business Today.

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