Group says oil industry is inflating job claims from shale gas


If you ask the oil industry, a boom in extracting gas from dense shale rock formations across the nation is fueling a surge in jobs, with the potential to create tens of thousands jobs in New York, Pennsylvania and other states.

But those job creation claims are wildly inflated, according to the consumer and conservation group Food and Water Watch.

“Shale gas jobs projections do not stand up to scrutiny,” the group concluded in a report released today. “Empirical analyses of the actual economic impacts of shale gas development, not industry-backed projections from economic forecasting models, should be the basis of policy decision making.”

The group takes issue with a 2011 report by the Public Policy Institute of New York State, which looked at shale gas development in Pennsylvania as a model for what could happen in the Empire State. That report claimed that the development of 500 new shale gas wells annually in Allegany, Broome, Chemung, Steuben and Tioga counties over the next seven years could sustain 62,620 new jobs in New York (including 47,120 indirect or induced jobs).

But Food and Water Watch says that is an overly “rosy projection” based on methodological flaws, including the study’s reliance on a lower number of wells in a wells-to-jobs stat from Pennsylvania. The projection also overlooks the number of jobs going to out-of-state workers with shale gas industry experience instead of New Yorkers. Food and Water Watch also says the public policy institute used an inaccurately big multiplier — 3.04 instead of 1.92 — to estimate the number of spillover jobs that would be created for every one direct job tied to new drilling in New York.

A more accurate job forecast might be a tenth of what the public policy institute projected — or a total of 6,656 New York jobs by 2018, according to Food and Water Watch.

That roughly matches an estimate by the New York Department of Environmental Conservation, which concluded in a draft report released in September that natural gas extraction in the state could directly employ 6,198 to 24,795 workers.

The conservationists say the New York and Pennsylvania reports are part of an oil industry trend of inflating potential jobs from oil and gas production, often to counter concerns about the environmental consequences of that work:

“The oil and gas industry, industry-funded academics and ideological think tanks have promoted unfettered expansion of shale gas development as a sure-fire job creator in difficult economic times. However, toxic above-ground spills of fracking fluid and wastewater, water well contamination from methane and fracking fluid migration underground, local and regional air pollution, explosions and the likelihood of accelerated climate change highlight the environmental and public health risks of the practice.”

Hugh MacMillan, a senior research with Food and Water Watch, said the flawed analyses — both by New York’s public policy institute and an underlying Pennsylvania State University study — are a problem, because they are widely cited by policymakers and federal officials. For instance, an Energy Department shale gas advisory board has relied on the Pennsylvania State University report in touting the potential economic benefits of gas production.

The nationwide natural gas boom is being fueled by a surge in hydraulic fracturing, a technique that involves blasting mixtures of sand, water and chemicals deep underground to break up shale rock and unlock trapped oil and natural gas.

Environmentalists have raised concerns that methane could escape from poorly designed and secured wells, contaminating local groundwater supplies. Another problem, they say, is the way the industry manages the high water demands of hydraulic fracturing and how it disposes the fluids it uses on site. In Pennsylvania, wastewater is sometimes trucked to local treatment facilities that are incapable of cleaning out naturally occurring but toxic materials that leach from the ground into those fluids.

Industry officials point to oil and gas companies’ commitments to disclose more information about the contents of the fracturing fluids they use as well as voluntary performance standards for the design and cementing of wells.

Industry representatives also point to the tens of thousands of wells being drilled annually as evidence that there are no systemic environmental problems tied to hydraulic fracturing.

Food and Water Watch’s report comes as officials throughout the Northeast are weighing whether to allow more natural gas drilling and hydraulic fracturing in the region. For instance, on Nov. 21, the five-member Delaware River Basin Commission is set to vote on new rules that would govern natural gas extraction from the Marcellus Shale.

Environmentalists cast the vote as pivotal because the commission’s decision could open areas throughout the watershed to hundreds of natural gas wells.

Separately, regulators in New York state are weighing the economic and environmental effects of natural gas drilling. A public comment period on an environmental impact statement runs through Dec. 12. High-volume hydraulic fracturing permits are on hold until federal regulators prepare a final version of that environmental analysis and issues their findings.

The New York State Department of Environmental Conservation opened a more than 90-day public comment period on its revised draft Supplemental Generic Environmental Impact Statement, DEC Commissioner Joe Martens announced today.

Food & Water Watch Report on Shale Gas Job Claims

Jennifer Dlouhy

10 Responses

  1. Joe says:

    Food and Water Watch…so what do those people produce?


  2. Woodlands Dad says:

    Inflated job numbers? That would be the Obama administration, thank you. Where was this organization when Obama was throwing around all those job numbers? Can you spell “double standard”?

  3. Hatrickwah says:

    I have to add… their conclusion that the work will provide enough jobs for less than the 0.1% of all the jobs in New York is ignorant… Well, if it will only provide enough jobs for .1% of New Yorkers, then why do it?, How about because the .1% potentially could unlock enough resources to provide, heat, electricity, and fuel to burn in SUVs (and yes Electric cars too!) and homes to ALL of those 9 million employed individuals.

  4. Hatrickwah says:

    I want to know where they come up with their numbers as well. I experienced the boom in Rock Springs. Trust me, when they’re drilling as many as 500 wells a year, 6,000 people WON’T cut it. While the oilfield was drilling like crazy, those stuck in town were stuck waiting in long lines EVERYWHERE because no one wanted to stock shelves or flip burgers. Finding a home was like looking for a needle in a hay stack, and when you did find one, ouch. Oil and gas has always had a boom and bust, but right now we need the boom. With any luck, due to the shear area of PA, NY and others, the bust won’t be felt, making it more like Kansas, Texas or Oklahoma, where communities grow, but no single community gets it all.

  5. steve says:

    where do these green-lib, job-killing group members come from? its amazing! during these times, they are able to do this? dont they have family and community to face each day? how do they live with themselves, knowing what they do, to many others?
    sure hope, the financing to effort these studies and reports, time an transportation, communications, and group gatherings, facility rentals or leases, are not supplemented thru our tax dollars? you know? the income tax revenue from what working dogs are left in the united states? green grants?
    would that be insult? to injury? you know it folks!
    thanx for reading, spread the right word. bring business back to america, for americans! we really need it! noticed?

  6. Indianpaintbrush says:

    Love your comment, Houston.
    Food and water Watch are full of hot air.

  7. Jackalope says:

    I find it hard to believe that 3,500 wells (500/yr. for 7 years) would employ only 6,600 people directly and indirectly. Annually, that’s just 13 people per well. As far as the complaint that many/most jobs would go to non-New Yorkers, my experience is NY universities don’t focus much on reservoir management, geophysics, geology, etc.

  8. Mark Miller says:

    There’s always a group determined to pick positive news apart for their own publicity. It’s not about the figures being wrong or inaccurate. It’s about garnering attention for a group that is otherwise unknown. In a world where we seldom get good news, and millions of people are out of work, why do groups like this have to add to the problem? Jobs of any kind and any number are good news these days. Don’t destroy more hope for people. Let the good news be heard.

  9. Trail Tramp says:

    Find out where the members of this group lives and cut the gas off to their homes. Let them chop wood this winter in order to stay warm.

  10. Houston says:

    Part of this is true. The industry has very little demand for pysch majors, community organizers, communications experts, history majors, etc. There is, however, across the board demand for scientists, engineers, mathematicians, etc. (I know those were the hard subjects in school.) There are across the board shortages of field personnel including roughnecks, mud-loggers, service hands, truck drivers, etc. Again not much room for those who are uncomfortable with being uncomfortable (long hours, poor conditions, long distance from home, etc.) But those who can put up with it are handsomely rewarded. Of course this only applies in states where the government hasn’t legislated the industry out of the market.