HARRISBURG — How many jobs the shale drilling boom has actually created is up for debate, according to a new report issued this week.
The report, released Thursday by the Keystone Research Center and Pennsylvania Budget and Policy Center, claims the previous estimates regarding the number of jobs created by the shale boom are far too generous.
“There are 33,000 shale-related jobs in this six-state region,” said Stephen Herzenberg, executive director of the Keystone Research Center and one of the authors of the report. “This is a far cry from 180,000.”
Estimates about the number of jobs from shale have been lingering around 200,000 in recent months.
Recent data released in September by the Pennsylvania Department of Labor and Industry puts the number at more than 230,000 employed in Marcellus shale-related industries, an estimate that includes jobs from 30 ancillary industries, such as freight trucking, highway construction and real estate.
And, last week, an advertisement for Gov. Tom Corbett’s re-election campaign touted shale jobs to be well more than 200,000.
But the report, “Exaggerating the Employment Impacts of Shale Drilling: How and Why,” says that number is actually much lower.
It found that between 2005 and 2012, employment numbers in the oil and gas sector and supporting industries rose by 22,441 jobs in Pennsylvania; 2,791 in Ohio; 6,022 in West Virginia; 563 in Virginia; 648 in New York; and 324 in Maryland — for a grand total of nearly 33,000 jobs created by the shale gas extraction and supporting industries.
It also says the shale industry actually represents a relatively small section of each state’s total employment, just 0.4 percent of the total workforce in Pennsylvania; 0.85 percent in West Virginia and 0.06 percent in Ohio.
As for the disparity between the two estimates of total job creation, it depends on which supporting jobs are considered to be from shale development — on how big the shale ripple really is.
Herzenberg argues that some of the jobs the Department of Labor counted jobs under the 30 ancillary industries existed long before shale development. He also said that some of these industries are only bolstered by shale development to a small degree.
“Most of those industries are feeding other industries than shale,” he said. “The bottom line is they shouldn’t be counting the vast majority of those 230,000 jobs — most of those jobs are supporting other industries.”
He noted ancillary industry jobs such as those in the trucking and sewage treatment industry as those that existed long before the shale boom in 2005.
But industry group officials say it’s important to consider all jobs — both those directly and indirectly involved with the industry.
“It’s important to take a holistic view of the entire supply chain, rather than just direct jobs. Not every one of these jobs is a well site,” said Marcellus Shale Coalition spokesman Travis Windle. “For example, not every auto industry job is in Detroit. But that doesn’t mean part manufacturers in Ohio and elsewhere, which play a crucial role in Detroit’s supply chain, are not auto industry jobs.”
Frank Mauro, executive director of the Fiscal Policy Institute and one of the report’s authors, called the shale industry “Pennsylvania’s well-hyped boom.”
Representatives from other states acknowledged the industry has helped their respective economies, but warned it was not an economic cure-all.
“While shale development in West Virginia has helped our economic recovery over the last couple of years and offered the potential for future growth… it alone will not save West Virginia from its economic doldrums,” said Ted Boettner, executive director of the West Virginia Center on Budget & Policy. “It’s really important that we look at shale development with clear eyes. This means having a firm grasp on the actual number of jobs created.”
Amanda Woodrum, energy researcher at Policy Matters Ohio, echoed Boettner’s sentiments.
“Shale drilling has definitely helped some communities in Ohio get through the Great Recession, but shale employment in Ohio on the whole has been relatively minor in Ohio,” Woodrum said. “It represents less than one-tenth of 1 percent (of the workforce.) This relatively modest level of expected employment is not worth throwing caution to wind and ignoring cost of industry development.”
The report also calls into question the validity of previous job numbers.
“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,” it said. “These strategies have ranged from the use of inappropriate measures, such as data on new hires, to represent job growth in 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 minimize, taxation, regulation and even careful examination of shale drilling.”
But Herzenberg put it simply.
“We’re not denying that there’s been job creation as a result of extraction of gas from shale,” he said. “There has been. But it’s a much more modest jobs impact than initially was claimed.”
The Associated Press contributed to this report.