AfriForum/Treasure the Karoo Action Group
Job Creation, Environment
American multi-state report shows misleading job figures for shale gas
A recent report, (November 21st) released by a US think-tank of six authors – the Multi-State Shale Research Collaboration (MSSRC) measures US statistics and figures across a broad range of indicators in six States to conclude that shale gas industry employment figures claimed by the oil and gas industry and pro-industry groups in the US have been exaggerated.
TKAG Director of Operations, Jeanie Le Roux, announced today that the organisation had conducted an independent assessment of the circumstances under which the report was produced. “We have reviewed the authors, the organisations involved, funders, sources of data and the methodology employed by the authors to arrive at their conclusions and are satisfied that the report is a fair review of the actual situation in the United States. Given the government’s stance to pursue shale gas, the implications for South Africa are alarming.”
Julius Kleynhans of AfriForum Department of Environmental affairs observed that the manipulation of employment statistics in America manifested in a serious issue for South Africa in that “just as in America, government leaders in South Africa have been influenced by the hype and speculation surrounding shale gas jobs.” Kleynhans argued that “not only is this serious in terms of energy policy, but it is also shocking that unemployed people in South Africa are being promised jobs – to get them to support shale gas – jobs that may never materialize.” Referring to The MSSRC report , Kleynhans asked “If the report counts 8749 wells over the six states from 2005-2012, which is – 7 years of full production and jobs attributed to shale gas for the period are 33 000 or 1 in every 794 other jobs, how many wells will Shell and others have to drill to deliver the promised 300 000 to 700 000 jobs?”
Some key figures and points extracted from the report:
- New York, Ohio, Pennsylvania, and West Virginia have a long history of gas and oil production and a core of extraction-related jobs created well before the emergence of hydrofracking. Together, Ohio, Pennsylvania, and West Virginia had 38% of all producing wells in the country in 1990 and 32% in 2000.
- Some counties with a long history of mineral extraction have experienced a shift in employment from coal to shale extraction.
- Natural gas development has advanced quickly in the Marcellus Shale bringing with it some economic benefit to counties with significant drilling activity. Those impacts helped to insulate those counties from the worst effects of the Great Recession but had little overall impact on the state economy in any state studied.
- Job growth in the industry has been greatest (as a share of total employment) in West Virginia, but shale-related employment is less than 1% of total West Virginia employment and less than half a percent of total employment in all the other states.
- Region-wide, shale-related employment accounts for nearly 33,000 jobs, one out of every 794 jobs. The education and health sectors, by contrast, account for 4.5 million jobs in the region, one out of every 6 jobs.
- Between 2005 and 2012, less than four new shale-related jobs have been created for each new well. This figure stands in sharp contrast to the claims in some industry-financed studies, which have included estimates as high as 31 for the number of jobs created per well drilled. 
- Employment estimates have been overstated, and the industry and its boosters have used inappropriate employment numbers, including equating new hires with new jobs and using ancillary job figures that largely have nothing to do with drilling, even after the flaws in those numbers have been brought to their attention.
- In addition, industry-funded studies, including those by Dr. Timothy Considine and co-authors, have substantially overstated the total jobs impact of the shale industry. With the passage of several years since the earliest Considine studies, we now know that actual Pennsylvania job growth has been much less than his initial estimates for 2011 and 2012.
Finally, employment gains in some counties have already been reversed as drilling activity, which is highly sensitive to commodity prices, shifted to more lucrative oil shale fields in Ohio and North Dakota. In fact, shale-related employment across the six-state Marcellus/Utica region fell over the past 12 months for which data exist, from the 1st quarter of 2012 to the 1st quarter of 2013.
 Gilliland, Donald, “US Chamber of Commerce launches pro-gas campaign with inaccurate jobs numbers,” Harrisburg Patriot-News, July 19, 2012, http://www.pennlive.com/midstate/index.ssf/2012/07/us_chamber_of_commerce_launche.html.
 Figures in this sentence come from Gilliland, Donald, “US Chamber of Commerce launches pro-gas campaign with inaccurate jobs numbers,” July 19, 2012, http://www.pennlive.com/midstate/index.ssf/2012/07/us_chamber_of_commerce_launche.html. As explained in the body of this report, even the 5,611 additional ancillary jobs do not measure drilling-related employment created.
 The exaggerations embodied in this industry-funded study are examined in a later section of this report.
 U.S. Chamber’s Energy Institute Launches “Shale Works for US” campaign in Pennsylvania, July 19, 2012, http://www.energyxxi.org/us-chamber%E2%80%99s-energy-institute-launches-%E2%80%9Cshale-works-us%E2%80%9D-campaign-pennsylvania
 Gilliland, Donald, “US Chamber of Commerce launches pro-gas campaign with inaccurate jobs numbers,” July 19, 2012,http://www.pennlive.com/midstate/index.ssf/2012/07/us_chamber_of_commerce_launche.html.
 “Pennsylvania is already a leader in shale gas production which, by 2012, supported 180,000 jobs and will generate over $2.5 billion in state and local tax revenues.” U.S. Chamber’s Energy Institute Launches “Shale Works for US” campaign in Pennsylvania, July 19, 2012, http://www.energyxxi.org/us-chamber%E2%80%99s-energy-institute-launches-%E2%80%9Cshale-worksus%E2%80%9D-campaign-pennsylvania
 Tom Feran, “Ohio Oil and Gas Association touts 40,000 new Ohio jobs, Truth-O-Meter Says: Pants on Fire,” Cleveland Plain Dealer, April 29, 2013, http://www.politifact.com/ohio/statements/2013/apr/29/ohio-oil-and-gas-association/ohio-oil-andgas-association-touts-40000-new-ohio-/; Whitney Burdette, “Natural Gas Industry Creates Jobs in West Virginia, Pennsylvania, The (Charleston) State Journal (published online by Energy Speaks), June 17, 2011, http://justbeneaththesurfacewv.com/post/Natural-Gas-Industry-Creates-Jobs-in-West-Virginia-Pennsylvania.aspx; Friends of Natural Gas NY, “Jobs,” Friends of Natural GasNY.com, 2011, http://www.friendsofnaturalgasny.com/why-natural-gas/jobs/.
 Amanda Weinstein and Mark Partridge, The Economic Value of Shale Natural Gas in Ohio, The Ohio State University Swank Program, December 2011, http://aede.osu.edu/sites/aede/files/publication_files/Economic%20Value%20of%20Shale%20FINAL%20Dec%202011.pdf
 Timothy Considine, Robert Watson, and Nicholas Considine, The Economic Opportunities of Shale Energy Development, The Manhattan Institute, May 2011, http://www.manhattan-institute.org/pdf/eper_09.pdf
Treasure the Karoo Action Group
Phone Office: 021 824 2935
- Study reveals how badly frackers lie about jobs (grist.org)
- Six-State Study Confirms Job Numbers Exaggerated by Fracking Industry (ecowatch.com)
- Study: Industry, Supporters, Grossly Overstated Jobs Created By Marcellus Shale Drilling (marcellusmonitor.wordpress.com)