WHEELING – Even with all the frackers, pipeliners, truckers, abstractors and others working in the Marcellus and Utica shale boom region, at least two researchers believe the industry’s impact on employment is virtually nil in the states involved.
During the Federal Reserve Bank of Cleveland’s Shale Symposium on Thursday at Wheeling Jesuit University, Keystone Research Center Executive Director Steven Herzenberg and Ohio State University rural and urban policy professor Mark Partridge challenged industry-funded studies that claim shale activity drives significant employment.
“In terms of the overall employment picture in these states, shale doesn’t make much difference,” Herzenberg said.
Herzenberg’s Keystone center is a Harrisburg, Pa.-based think tank. On Thursday, he said shale jobs account for less than 1 percent of West Virginia’s work force, and only about 0.2 percent of Ohio’s labor market.
“The shale industry is important, but it is small,” he added.
However, Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia, disputed the validity of Herzenberg’s statements when contacted following the symposium. He said while he could not speak to the presentation itself, he found the numbers to be “unrealistic.”
“That is an unrealistically small number for me to believe,” he said.
Partridge said only 0.4 percent of the national work force is directly related to the oil and natural gas industry, adding that a substantial number of these employees labor in Harris County, Texas, which is home to Houston.
“It is a very capital-intensive industry,” he said, adding this is contrary to the labor-intensive activity of coal mining.
For example, once a natural gas well is drilled, fracked and hooked to a pipeline, there is not much left for workers to do at that particular site. In contrast, even with modern mechanization, a coal mine requires a constant supply of employees in order to function.
Partridge said one of the main problems he sees in studying the “boom-bust” cycle of oil and natural gas rushes across the U.S. involves the competency and honesty of government officials.
“State and local governments are captured by special interests,” he said. “If you have good, effective government, you tend to have better effects from the boom.”
Both Herzenberg and Partridge admitted their statistics did not account for temporary construction jobs the shale boom creates because they said many of these positions go to people who live in other areas.
Another think tank researcher, Amanda Woodrum of Policy Matters Ohio, said some of the leases signed by mineral owners in Ohio allow drillers to deduct up to 90 percent of the production royalties they would otherwise have to pay to because of clauses for “gathering expenses.” Without knowing to look for it on their lease agreements, she said many Ohio mineral owners fell victim to this upon signing their contracts.
Wetzel County Action Group member Bill Hughes asked Woodrum how researchers could account for the increase in rents across the shale boom areas.
She said it is quite difficult to obtain definitive data on such matters.