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Economy & Business

How Many Jobs Are Created by Drilling in PA?

Many have deemed shale drilling controversial due to concerns with groundwater contamination and even earthquakes, but the shale gas industry says it creates hundreds of thousands of jobs.

However, five research and policy organizations claim the shale industry is overestimating its impact.

According to the Fiscal Policy Institute of New York, the Keystone Research Center and Pennsylvania Budget and Policy Center and the other left-leaning organizations included in the report, the U.S. Chamber of Commerce has said 180,000 jobs are supported by natural gas throughout Maryland, New York, Ohio, Pennsylvania, Virginia and West Virginia.

Frank Mauro, Fiscal Policy Institute in New York Executive Director, said firms with an economic interest in the expansion of drilling in the Marcellus and Utica Shale Formation have used various strategies to "exaggerate" their employment impact.

“These strategies have ranged from misrepresenting the hiring that occurs because of employee turnovers and new jobs to implying that all the jobs — let me repeat that, all the jobs — in industries in which some firms have some relation to shale drilling are somehow the result of the emergence and growth of shale drilling,” Mauro said.

He claimed the industry does this to preclude or minimize taxation regulation and careful examination of shale drilling.

Louis D'Amico, president of the Pennsylvania Independent Oil & Gas Association (PIOGA) issued a counter statement saying the groups "let a political agenda drive" the report.  

"Employment estimates and projections can be calculated in any number of ways, and these groups have cherry-picked various studies to play a game of 'gotcha' that has no bearing on the real-world examples of economic growth and jobs being realized through the production of affordable, American-made oil and natural gas."

Stephen Herzenberg, Keystone Research Center economist and executive director, said the five organizations measured shale-related employment for their report using available government data.

He deemed their process “not controversial” because he said it was “virtually identical” to the Pennsylvania Department of Labor and Industry’s method for estimating Marcellus core employment.

The organizations came to the conclusion there are 33,000 shale-related jobs in the six-state region.

According to Herzenberg, there are 22,000 jobs supported by natural gas in Pennsylvania, 6,000 in West Virginia and 3,000 in Ohio.

The statement from PIOGA President D'Amico said these five organizations re making "a feeble attempt to belittle the number of jobs being created" and the economic impact from the production of shale gas.

"Well over 1,100 jobs have been saved at refineries in Philadelphia and Marcus Hook, thanks to natural gas being produced in counties in the Commonwealth. Williamsport was recently recognized as the country's seventh-fastest growing regional economy, with more than 85 new businesses opening in the area in a span of 18 months. The per capita personal income in Washington County increased from $29,138 in 2001 to $46,237 in 2011, an amount almost 10 percent higher than the state average."

Herzenberg said the Pennsylvania Department of Labor and Industry created a list of 30 “ancillary” industries considered to be “shale-related” by industries that provide a substantial number of goods and services to the drilling companies.

“For example, trucking is one of those industries because lots of trucks take water to drill pads … but the problem is that shale jobs in these 30 industries are a tiny share of the total,” Herzenberg said.

He said many of the industries claimed to be “shale-related,” such as trucking, sewage treatment and commercial and industrial machining and equipment repair, are very broad and serve the entire Pennsylvania economy.

Herzenberg said a vast majority of these jobs existed before fracking — making the industry’s attribution “wrong.”