Study: Marcellus Shale a “Strong Engine of Job Growth”

The school of Labor and Employment Relations at  the Univ. of Illinois at Urbana-Champaign recently published a report, which puts the spotlight on how the Marcellus Shale has fueled significant job growth.

The new report is a retrospective analysis of natural gas/Marcellus Shale employment data from 2008-2014 in parts of Ohio, Pennsylvania, Maryland and West Virginia. According to the study:

“A preliminary examination of employment data in states related to the Marcellus Shale Play reveals that natural gas exploration has been a strong engine of job growth.”(p. 8; emphasis added)

Previous studies on employment fueled by Marcellus Shale development have looked only at employment numbers.  This study looked specifically at actual worked hours in construction on oil and gas projects developed because of shale gas exploration. Due to the vast supply chain involved in shale development, the study evaluated everything from industry crane work and installation of underground piping to construction of drill pads. In order to understand hours worked in each of these oil and gas supply chain sectors, the researchers narrowed down specific crafts to look at. From the study:

“This report presents the actual labor hours worked for thirteen trades and the estimated construction workers required for all capital and maintenance activities. The following crafts have been selected for this study: Boilermakers, Operating Engineers, Electricians, Pipefitters, Ironworkers, Plumbers, Laborers, Insulators, Carpenters, Sheet Metal Workers, Painters, Plasterers and Masons and Teamsters.” (p. 4; emphasis added)

According to data collected in the study:

• Construction and maintenance spending associated with Marcellus Shale development reached $5 billion in 2013 – growing by 61 percent from 2012.  The trend continues this year with $6.5 billion already committed.

• Over the last six years, approximately 35.8 million labor hours came from major plant capital and maintenance work in the oil and gas and related indirect industries with an annual growth rate of 30.7 percent. The year 2013 reached an all-time high with over 9 million labor hours recorded. This represents a 40 percent increase over 2012.

• Estimating off the median base wage rates of each craft, over $247 million was paid out to workers in this industry as a result of ongoing construction activities.

• 2008 to the first half of 2014, over 72 million hours of direct and indirect construction labor has been worked on natural gas and oil projects related to the Marcellus Shale. These hours translate to 36,321 actual construction workers (based on a standard 2,000 hours of work) and engaged in oil and gas work that would not have occurred “but for” natural gas exploration in the Marcellus Shale geological footprint. (p. 5; emphasis added)

It’s evident that Marcellus Shale development really is a, “strong engine of job growth.” This is especially true when looking at construction and maintenance outside of the Marcellus Shale industry. As the study explains:

“Conversely, construction activity in non-shale related oil and gas industries has fallen by 53.7 percent since 2008 when it reached its peak of 14.8 million labor hours. Last year, this group of industries only generated 6.6 million hours for the eight trades highlighted in this report. At one time, 7,100 full time construction jobs were created annually. That number has dropped to 3,300 jobs. (p. 5; emphasis added)

At a time when jobs like these were seeing a slowdown, Marcellus Shale development has been able to unlock new opportunities for families living in the Appalachian region. What’s even more promising is that this report didn’t even touch on projected, indirect or induced employment impacts; although, a recent report from the American Petroleum Institute found incredible job growth there as well.

At the Global Frackdown this past weekend, it was interesting to hear those opposed to development put down the job growth in the region, calling it insignificant.  36,321 construction jobs on top of all the other industry jobs and indirect jobs created, hardly seems insignificant.