How New York State Exaggerated Potential Job Creation from Shale ...

Introduction
The oil and gas industry, 5 industry-funded academics 6
and ideological think tanks 7 have promoted shale gas
development as a sure-fire job creator in difficult
economic times. Proponents of shale gas development
have benefited from media 8 and U.S. government 9
reports in which the supposed economic benefits have
gone unquestioned. Food & Water Watch recently
analyzed one industry-backed job projection and found
that it overstated shale gas job creation potential in
New York by a factor of 10, or about 900 percent. 10
New York’s job projection follows a similar methodology
and suffers from similar flaws. A topline claim in
the New York socioeconomic impact analysis is that
53,969 jobs could be created assuming an “average”
scenario of shale gas development. 11 But this is a
30-year projection. 12 It assumes that a total of 42,126
shale gas wells would be developed over 30 years,
including 21,067 in just the three counties of Broome,
Chemung and Tioga. 13
Close examination of this job projection shows that
allowing for such extensive shale gas development
in New York would actually have a minimal impact
on employment in the near term, primarily because
most jobs would go to employees from out-of-state.
Shale gas development would not provide the broadbased
economic growth that New York now needs and
that the industry has promised they could deliver.
Instead, shale gas development would primarily benefit
the oil and gas industry while bringing significant
costs to public health, public infrastructure, and
the environment.
New York’s shale gas job projection
The consulting company Ecology and Environment, Inc.
(E&E Inc.) was hired to conduct New York’s analysis of
the impact that shale gas development would have on
employment in the state. 14 E&E Inc. produced a report
describing their methodology and findings that became,
after minor revisions, Section 6.8 of the New York State
Department of Conservation (NYSDEC) “Revised Draft
Supplemental Generic Environmental Impact Statement”
(SGEIS). 15 Under New York’s “average” development
scenario, A the analysis concluded that 53,969
jobs would be created from drilling and fracking 42,126
shale gas wells over 30 years, compared to the baseline
of no shale gas development. 16
Jobs before production versus jobs during production
New York’s 30-year projection of 53,969 jobs comes
from three separate projections: a projected 17,634
“construction” jobs from the preparing, drilling and
fracking of 1,652 shale gas wells in year 30; a projected
7,161 “production” jobs that have accumulated over
the 30 years as more and more wells are brought into
production; and a projected 29,174 “indirect” jobs created
by the economic spillover effects of construction
and production jobs. 17
A 2009 study by the Marcellus Shale Education &
Training Center (MSETC) on future education and
training needs in Pennsylvania is the basis, in the
New York study, of this distinction between jobs before
production and jobs during production. 18 However, to
make this distinction, MSETC uses the terms “drilling
phase jobs” and “production phase jobs,” even though
some of the drilling phase jobs are associated with
pre-drilling activities. 19 New York’s use of the term
“construction jobs” obscures the fact that the drilling
(and pre-drilling) phase of well development includes
white-collar jobs, such as lawyers, lobbyists, accountants,
engineers and office assistants, in addition to
jobs directly associated with building access roads,
constructing pipelines, clearing land and drilling and
fracking. 20 A more accurate distinction is used in this
report: pre-production phase jobs versus production
phase jobs.
It takes less than one year to prepare a well site and
conduct the drilling and fracking. 21 As a consequence,
the number of pre-production phase jobs increases
from one year to the next only if the number of new
wells developed each year increases; if the number of
new wells drilled and fracked stays constant, then no
new pre-production phase jobs would be created.
A Three development scenarios were developed based on information
from the Independent Oil & Gas Association of New York (IOGA-NY).
The NYSDEC SGEIS only reports the “low” and “average” development
scenarios.
How New York State Exaggerated Potential Job Creation from Shale Gas Development • November 2011 3