Groups differ on shale’s job impact on Valley economy

By Tom McParland


As the shale play in Northeast Ohio begins to take off, studies emerging from both sides of the hydraulic-fracturing debate are painting different pictures about the industry’s impact on the local economy.

Debate surrounding a pair of recent studies shows that the position an organization takes on the process known as fracking can influence both the way information is collected and the way it is presented to the public.

One study, a quarterly report released last week by the Ohio Department of Job and Family Services, gauged the number of shale-related jobs created in the state by looking at six “core industries” and a group of 30 “ancillary industries.”

The core industries — extraction, drilling, support, pipeline construction and transportation — have had a 30 percent increase in jobs since 2011, the study found. Those figures represent an additional 1,929 jobs added in the two years since shale drilling began in Ohio.

The report also found a 3.8 percent employment increase in ancillary industries, or the various fields that support fracking and are affected by its success.

Energy In Depth Ohio, the public-relations arm for the state’s oil and gas industry, touted the findings on its website. Shawn Bennett, the group’s field director, posted a blog entry under the heading “New Report Shows Major Growth in Ohio Shale Jobs” and praised the “tremendous 30 percent” bump in core employment.

But not everybody saw those numbers as such a success.

“Thirty percent of a few thousand jobs is not that many,” said Amanda Woodrum, a researcher for Policy Matters Ohio.

Her organization is a part of the Multi-State Shale Research Collaborative, which last month released a report alleging that the fracking industry and its supporters had exaggerated the impact of shale drilling on jobs.

The study looked at job growth for the six states that span the Utica and Marcellus shale formations and accounted only for jobs directly related to shale drilling, excluding figures related to pipeline construction.

Between 2005 and 2012, the study showed fewer than four new jobs were created for each well drilled, compared with some estimates that each well would generate as many as 31 new jobs.

Woodrum said that Policy Matters Ohio puts the number of jobs created directly from shale drilling at about the same level as the ODJFS study.

But given the development in the state, she said, job growth is not as impressive as fracking advocates have proclaimed.

“An increase from [about] 6 to 8 thousand is a 30 percent increase,” Woodrum said. “But that sounds a lot better than it really is.”

The oil and gas industry has purposely overstated the economic impact of fracking to start drilling quickly and avoid regulations and taxes, she said.

Bennett said the scope of the MSSRC study was intentionally narrow, excluding broader economic development related to the shale industry.

“The groups behind that initial study are groups that are vehemently opposed to oil and gas development,” Bennett said. “So they intentionally used a very narrow scope.”

He said local shale drilling is currently in its “exploration portion,” and he expects to see rapid growth by 2015, as drilling ramps up.

That would mean an increase in pipeline construction to move natural gas and other supporting industries, Bennett said.

Woodrum said predictions for long-term support jobs leave too much room for speculation. Instead, she expects direct job growth to mirror neighboring Pennsylvania, where she said drilling resulted in about 22,000 new jobs.

But Dr. Matthew Rousu, an economics professor at Susquehanna University who has studied the economic impact of Pennsylvania’s shale industry, said the direct-jobs estimates in his state range from 30,000 to 200,000. Slightly more than half of all new shale jobs, he estimated, have been directly related to fracking.

“Even the 30,000 is an enormous number for one industry,” he said.

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