Study: Industry, Supporters, Grossly Overstated Jobs Created By Marcellus Shale Drilling

Looks like these guys were a little off on their estimate of the impact of shale. (Photo Courtesy http://www.senatorsolobay.com/

Looks like these guys were a little off on their estimate of the impact of shale. (Photo Courtesy http://www.senatorsolobay.com/

It’s been a trump card of sorts for supporters and members of the Marcellus Shale industry: Jobs.

Pennsylvania Sen. Tim Solobay, D-Canonsburg, who has long been cozy with the industry, in June said Marcellus Shale drilling was a “magnet” for economic development. In an interview, he said more than 200,000 jobs had been created thanks to the industry.

In August, Range Resources spokesman Matt Pitzarella told a reporter for KDKA radio that the industry was the saving grace for the keystone state – pretty much saving it from financial ruin:

This enormous boom that we’ve sustained over the years in oil and gas may have been the only thing that truly kept us out of falling into a true great depression as opposed to an extended recession.

But the truth? Shale industry folks and supporters like Solobay have grossly overstated the jobs created by drilling according to a new study by the  Multi-State Shale Research Collaborative revealed.

The organization “brings together independent, nonpartisan research and policy organizations in New York, Ohio, Pennsylvania, Virginia, and West Virginia to monitor employment trends, tax policy, economic development, and the community impacts of energy extraction in the Marcellus and Utica Shale” and conducted research and interviews that discovered this:

  • Yes, the shale boom DID help spur some economic growth. But not nearly as much as the industry and its supporters would have you think. The study indicated that between 2005 and 2012, fewer than four new direct shale-related jobs were created for each new well drilled. Industry-funded studies have estimated that as many as 31 jobs were created per well. Indeed, while Pitzarella told KDKA that, “There’s an enormous difference between the growth in the oil and gas industry and the normal private sector,” that isn’t quite accurate, either. The study reported that shale-related employment accounts for only one out of every 794 jobs. “By contrast, education and health sectors account for one out of every six jobs,” according to the Collaborative.
  • That figure from Solobay? He is way off. Here’s a snippet from the study:

Over the last five years, firms with an economic interest in the expansion of drilling in the Marcellus and Utica shale formations — and their allies, supporters, and trade associations — have used a variety of tools and techniques to exaggerate the employment impacts of shale drilling. These strategies have ranged from the use of inappropriate measures, such as data on new hires, to represent job growth to the misleading attribution of all jobs in “ancillary” industries to the shale industry.

A review of statements by representatives of shale drilling firms and their allies makes the motivation for this exaggeration clear — to preclude, or at least to minimize, taxation, regulation, and even careful examination of shale drilling.

An explicit example of this “defense by exaggeration” strategy occurred on July 19, 2012, at a Harrisburg press conference during which the Pennsylvania Chamber of Business and Industry joined the U.S. Chamber of Commerce for the launch of its “Shale Works for US” campaign.

At this event, Karen Harbert, the president and CEO of The Institute for 21st Century Energy, the energy policy arm of the U.S. Chamber of Commerce, said the goal of “Shale Works for US” was to make sure that lawmakers “don’t squander or obstruct this opportunity” and to “ensure no hindrance or regulatory barriers” to natural gas drilling.

As reported in The Patriot-News of Harrisburg, the Chamber’s employment claims exceeded those reported by the Pennsylvania Department of Labor and Industry, whose Secretary shared the stage with Harbert that day. In its release, the Chamber stated that shale gas production “created over 300,000 new jobs in the last two years,” while the most recent Department of Labor and Industry data at the time indicated that, between the 4th quarter of 2008 and 4th quarter 2011, the industry created a total of 18,007 jobs in “core” Marcellus industries, with an additional 5,611 jobs added in “ancillary” industries.

  • The report also indicates that many of the jobs the industry claimed to have created existed before fracking came to town. “Some counties with a long history of mineral extraction have experienced a shift in employment from coal to shale extraction,” the report states.
  • Those jobs? Not sustainable. According to the study, “Direct shale-related employment across the six-state Marcellus/Utica region fell over the last 12 months for which there are data — the first quarter 2012 to the first quarter 2013.”

Could it be that the industry inflated numbers in an effort to avoid those nasty impact fees and severance taxes? Members of the Collaborative said that’s affirmative, pal.

“Industry supporters have exaggerated the jobs impact in order to minimize or avoid altogether taxation, regulation, and even careful examination of shale drilling,” said Frank Mauro, executive director of the Fiscal Policy Institute in New York.

Yes, shale drilling has created jobs in Pennsylvania and West Virginia, “and cushioned some drilling-intensive areas in those states from the worst effects of the Great Recession and the weak recovery.” But “the number of shale jobs created is far below industry claims and remains a small share of overall employment.”

Another member of the Collaborative, Stephen Herzenberg, executive director of the Keystone Research Center in Pennsylvania, said in a statement:

Shale drilling has made little difference in job growth in any of the six states we studied. We know this because we now have data on what happened, not what industry supporters hoped would happen.

Wanna read more? Check out the study by clicking here.

Editor’s Note: On Facebook? “Like” us there by clicking here! -amanda

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One thought on “Study: Industry, Supporters, Grossly Overstated Jobs Created By Marcellus Shale Drilling

  1. […] Study: Industry, Supporters, Grossly Overstated Jobs Created By Marcellus Shale Drilling (marcellusmonitor.wordpress.com) […]

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