HARRISBURG — As executive director of the Wellsboro Area Chamber of Commerce, Julie VanNess was front and center when energy companies descended on Tioga County to secure drilling leases on pristine land around Routes 6 and 660 through Pennsylvania’s Grand Canyon.
“I don’t have a negative feeling for the industry,” VanNess said.
The industry was accommodating and respectful of the community’s needs and understood the importance of its tourism industry, VanNess said. It fixed long-neglected back roads to handle rigs, rerouted drivers away from Wellsboro’s tony downtown and kept trucks away from schools during class time, she said.
“You can’t tell they were even here,” VanNess said. “If you drive through the countryside you will not know something happened. Once the wells are drilled, capped and the pipelines in, you don’t notice them.”
That was about two years ago.
With leases signed and wells operating, the companies have pulled back resources amid what had been until recently a downturn in natural gas prices. Many of the out-of-town workers who filled hotels and restaurants in and around Wellsboro have left, too.
“Right now it’s on kind of a hiatus,” VanNess said. “It’s slowed down significantly here. I expect that will pick back up again. Right now you see very little activity.”
It’s the same story in many of the 32 other counties where drilling began in 2004 to extract natural gas trapped in the underground Marcellus and Utica Shale formations: Fewer jobs and less overall economic activity, despite a record amount of gas — 3.1 trillion cubic feet — produced in 2013.
The industry has declined, Williamsport Mayor Gabe Campana said, but it’s still alive. Without it, the unemployment rate in his third-class city of 35,000 would be 10 percent and he wouldn’t have four new hotels downtown.
“It’s made a difference in the overall economy,” Campana said. “But it has receded. Talk to the guys in the field and they’ll tell you there’s ebbs and flows. It has picked up in the past two, three months and we are encouraged by that.”
Gov. Tom Corbett praises the natural gas industry as a key cornerstone of the state’s economy.
“It’s lifting up entire communities, creating and supporting many thousands of jobs well beyond gas production,” Corbett said in his Feb. 4 budget address.
But state records show the gas industry has not created as many jobs as state officials have claimed. In addition, the state’s estimates of ancillary job growth have been inflated to include employment in places drilling isn’t even taking place, further skewing the impact the natural gas industry has had on employment.
The number of jobs directly associated with Marcellus Shale’s six “core industries,” including drilling, extraction and pipeline construction, declined by 29 percent to 29,926 between the fourth quarters of 2010 and 2013, according to the state Department of Labor and Industry’s January labor report. The report is based on employer surveys collected for federal unemployment data and has been produced using the same analysis since Gov. Ed Rendell‘s administration.
The number of core gas jobs accounts for less than 1 percent of the state’s nearly 5.8 million jobs.
Corbett spokesman Jay Pagni defended the administration’s record on jobs in the shale industry and its training efforts. He said the state and governor support all forms of industry equally, and has numerous programs to help train workers in the event of a downturn in the local economy or job sector.
“The commonwealth and the governor support local communities in not only the Marcellus industry but in all industry,” Pagni said in an email. “Activities abound in attracting new business to the state, ensuring that services are available to companies while they manufacture, produce, create, etc. and support the workforce through job training and retraining efforts should a company choose to leave.”
All industries go through a natural cycle, Pagni said. The workforce and activities associated change and adapt, he said.
“If a well is not being drilled, jobs continue to flourish in the trucking and transport because it is still producing,” Pagni said. “These activities will continue to provide economic benefit to communities as the industry moves from flow to ebb.”
While the core Marcellus Shale jobs are declining, the Labor Department claims the number of ancillary jobs indirectly tied to the natural gas industry has increased 8 percent to 212,000.
But that increase is not based solely on employment trends in the counties where more than 7,000 wells are permitted to be drilled.
The report includes statewide employment trends in trucking, engineering, highway construction and about two dozen other career sectors. So jobs in the Lehigh Valley, Philadelphia and other areas where there are no wells have been counted as ancillary gas jobs.
Labor Department spokeswoman Sara Goulet defended the report, saying the data on core jobs show a concentration of drilling, extraction and construction jobs has increased in the state’s northern tier and southwest corner, where drilling is being done.
But trying to quantify the ancillary jobs data is hard, Goulet said, because the number of ancillary jobs has increased in the drilling regions, too. But since there is no way to determine if the jobs are tied to the gas industry, she said, it makes sense to list statewide employment numbers.
“Employers don’t state, ‘That’s a Marcellus Shale construction job’ in the employer survey that counts jobs,” Goulet said. “It is not a perfect science, but it does give a fair picture of those ancillary industries’ growth as it pertains to [Marcellus Shale] and the time period when those industries started to experience significant growth.”
The shale industry is creating support jobs statewide even if they are in Delaware County, said Kravis Windle, a spokesman for the Marcellus Shale Coalition, a trade group in Pittsburgh.
“As President Obama‘s energy secretary stated last week, responsible shale development is creating ‘economic prosperity’ across Pennsylvania and beyond,” Windle said in an email. “Not only are tens of thousands of good-paying jobs being created at well sites and pipeline construction projects across the commonwealth, but with Pennsylvania now the nation’s second largest shale-producing state — accounting for nearly 20 percent of all U.S. natural gas production — many other support industries are realizing these benefits.”
There is no question the drilling industry has had a positive impact in communities, said Mark Price, a labor economist with Keystone Research Center, an economic policy group with ties to several labor unions. The Labor Department report on core drilling jobs does a good job of capturing that impact through its employment report of the gas industry, he said.
But the ancillary report is bloated and useless, Price said. The shale industry has led to more engineering and trucking jobs, he said. But it’s hard to believe every engineer or trucker in the state is working in the gas industry as the Labor Department reports, he said.
“The ancillary is gobbledygoop,” he said.
The Labor Department cannot publish a county-level jobs report because of privacy issues, Price said. The report would be so narrow it would be easy to identify companies by name, which would violate private unemployment rights, he said. With that legal difficulty, Price said, the state should not publish a statewide ancillary report because it cannot accurately track which jobs support the shale industry.