Jobs
growing economy of Williamsport, Pa., located in the midst of the Marcellus shale region, which was ranked the thirdfastest growing metro economies by the Bureau of Economic Analysis for 2011.
Continued from A1
has, over the last several years, created employment in Pennsylvania,” said Mark Price, labor economist for the Keystone Research Center. “But it remains the fact that employment overall in that sector — you’re talking about something that is less than 0.5 percent of the workforce … a tiny portion of all the jobs.” Yet industry groups such as the Marcellus Shale Coalition continue to tout the industry’s job creation, citing numbers in the millions for new jobs created by shale. “Employment in the entire upstream unconventional oil and gas sector on a direct, indirec and induced basis will support nearly 1.8 million jobs in 2012, 2.5 million jobs in 2015, 3 million jobs in 2020, and nearly 3.5 million jobs in 2035,” said Marcellus Shale Coalition spokesman Travis Windle. When asked why the unemployment rate is rising despite natural gas development, Windle said that you can’t blame the unemployment rate on just one segment of the economy. “While the natural gas industry continues to grow — and its number of associated jobs will certainly ebb and flow over time — other segments of the Pennsylvania’s economy, like the nation’s, continue to face headwinds,” he said. “So attempting to draw a connection to Pennsylvania’s unemployment rate exclusively to the performance of one industry is misguided, and fundamentally fails to account for the performance of a host of other industries, (such as) agricultural, health care, manufacturing.” Louis D’Amico, president and executive director of the Pennsylvania Independent Oil and Gas Association, echoed Windle’s sentiment. “It is a preposterous conclusion to assume that job creation statistics for the entire state rests on the back of a single industry,” he said. “Given that about 70 rigs are operating in Pennsylvania, construction work continues on pipelines and compressor stations to bring more natural gas to market and the workers are being paid
A3
HERALDSTANDARD.COM | SUNDAY, MAY 5, 2013
Why are the numbers so different?
Roberto M. Esquivel|Herald-Standard
A work truck with a Utah license plate and registered to Rocky Mountain Drilling Inc. is pictured outside of the Holiday Inn in North Union Township.
department says, include crude petroleum and natural gas extraction, natural gas liquid extraction, drilling oil and gas wells, support activities for oil and gas operations, oil and gas pipeline and related structures and pipeline transportation of natural gas. The rest — more than 214,000 employees — were employed by the ancillary industries, which includes jobs with highway, street and bridge construction, environmental consulting services, petrochemical manufacturing, freight trucking services — even iron and steel mill workers. Windle still touts the importance of the nearly a quarter of a million Pennsylvanians who he says may not be employed if it weren’t for natural gas development. “There are roughly a quarter of a million Pennsylvanians who may not be working (and paying taxes) today but for natural gas How many Marcellus jobs development,” he said. “This is a huge number by any measure, are there? especially given the fact that the national economy is still According to the Pennsylvania growing at an anemic rate folDepartment of Labor & Induslowing one of the deepest and try’s Marcellus shale-specific most protracted downturns in a data from April, as of the third generation.” quarter of 2012, there were The same data shows that 245,054 employed as a result of from the third quarter of 2009 to Marcellus development — but the third quarter of 2012, there only 30,752 were directly emwere 19,087 jobs added to the ployed within the Marcellus core industries. So according to industry, or what the department this data, jobs in the Marcellus calls the core industries. core industries added about The core industries, the 6,362 jobs each year. significantly more than the average wage of about $45,000, it is fair to say that the industry is maintaining a very strong economic presence in the state and will continue to do so.” D’Amico also said the low natural gas prices have affected the industry’s growth in the state. “Stubbornly low commodity prices for natural gas, along with other factors, are having a short-term drag on the industry in Pennsylvania,” he said. “Finally, lagging job growth across all economic sectors in the state can be linked to other factors, starting with the fact that Pennsylvania has the highest corporate net income tax in the nation.” Marcellus development is the reason the unemployment isn’t higher, Windle said. “Pennsylvania’s unemployment rate would most obviously be much higher were it not for Marcellus development,” he said.
An economist’s view So where is the industry getting their numbers? “(Groups like) the Marcellus Shale Coalition exists for a booster for the industry, creating a positive public presence and also advocating for industry and state legislators,” Price said. “When you see … estimates, especially when they come from an industry group like this one, they are often done in a way to help with the boosterism, not with an eye of what is going on — more with an eye of we need to sell this industry.” Price doesn’t buy the industry’s moniker of “game-changer” when it comes to Marcellus development. “(Marcellus) is not ultimately going to be a driver in all economic activity in the state of Pennsylvania,” he said. “It’s not something that is going to radically change the course of Pennsylvania’s economy.” But he did say the Marcellus most helps areas with smaller populations and dwindling economies. “It’s important, especially in places where there is drilling, especially if those places are small with a small population, and in particular if those places have been in decline,” he said. “All jobs matter — and if you have a job in that sector, (such as) a truck driver, that’s important to you, that salary is important to you, good for the economy.” Windle agreed, citing the fast
Price pointed out that the industry’s numbers and the Department of Labor and Industry’s numbers also differ because they use different models to calculate them. The department, he said, uses a “jobs you can count” method, while industry groups tend to use an input/output method. “A lot of the industry estimates that you see thrown around come from input/output models, where an economist has been hired to take numbers, run through a model, make a lot of assumptions and trace out how big the industry is,” he said. He also said that even the core industries jobs calculated by the Department of Labor & Industry are really just their “best educated guess about what’s there.” “There’s no way in this data to know for sure whether the jobs are actually related to Marcellus,” he said. “Good sense tells you that the core jobs are more than likely (related to Marcellus) only because we think nothing else is going on. The trouble you have with models is they are models — they aren’t necessarily reality, they are an economist’s best guess.” He also doesn’t put much stock in the jobs created by what the Department of Industry and Labor calls ancillary industries, which accounts for more than 214,000 of more than 245,000 jobs some say the Marcellus has created. “I have no confidence that the ancillary industries are capturing anything,” he said. Even then, Price gives credit where credit is due — namely, the 20,000 jobs that can most likely be attributed to the core Marcellus industries. “(Marcellus development) is definitely creating jobs,” he said. “Twenty thousand jobs is a lot of jobs. I wish it was more. It’s creating opportunities, it’s creating employment and we should recognize that. But absolutely we shouldn’t overstate it.”
Correction/Clarification
Brush fire spreads to house Firefighters from North Union Township, West Leisenring and Hopwood responded to an out-of-control brush fire that spread to the house at 94 Brushwood Rd. around 6:10 p.m. on Saturday. According to North Union Township Fire Chief Jim Marnell, the homeowner had been burning brush too close to his home and the fire spread to the rear of the house. Firefighters were on the scene for several hours.
In a photo published Friday on page B4 about food bank volunteers receiving community service awards, Darlene “Dolly” Jacobs was misidentified. The Herald-Standard apologizes for this error. To request a correction or clarification, please call HeraldStandard.com Executive Editor Mark O’Keefe at 724-439-7569.
State Farm®
Providing Insurance and Financial Services Home Office, Bloomington, Illinois 61710
Chuck Seighman, Agent 1219 National Pike (Rte. 40 E) Hopwood, PA 15445 Bus: 724-437-1591 www.chuckseighman.com
Joel Brewton | Herald-Standard
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