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Study: Marcellus shale industry has ‘modest impact’ on creating local jobs

Up to half of the drilling jobs associated with the Marcellus shale industry don’t go to local residents, and the industry has had only “modest impact” on overall employment numbers in the state, a new study commissioned by a Penn State University economist suggests.

Tim Kelsey studied tax data from the state Department of Revenue from 2002 to 2011, the last year the data was available. He studied the tax data in an attempt to pin down exactly where Marcellus shale workers lived, and what he found was that many drilling jobs did not go to people already living in counties where drilling took place.

Kelsey cautioned that doesn’t mean the jobs are going to outsiders from far-away states. It does mean, though, that the gas drilling industry isn’t having as big an impact locally as some might suggest, he said.

The numbers in his study show a discrepancy to back up his claim, Kelsey said.

Based on his data, Kelsey said Marcellus development “increased the aggregate employment of local residents between 7,346 to 9,602 jobs” in the average Pennsylvania county, despite Bureau of Labor Statistics information that predicted between 18,761 and 20,385 jobs in the average county.

Furthermore, Kelsey said in an interview, those jobs that are created aren’t necessarily going to local workers.

“We know a lot of workers are from non-Marcellus counties who commute into work, as well as the stereotype of people coming from Texas and Oklahoma,” Kelsey said. “And those folks make up about half the jobs.”

Kelsey admitted his study isn’t sitting well with people in the oil and gas industry, especially because he studied data only up to 2011. He also admits the Marcellus shale industry has changed dramatically since then and said a “good share” of drilling jobs are now taken by Pennsylvania residents.

But he stands by the study, which deduces that “actual employment effects for local residents are far more modest than previously thought.”

In related news, Marcellus jobs report needs work, state researcher says.

The study concluded that “a significant amount of any increase in employment from (shale) development likely comes primarily from nonresidents and/or workers temporarily relocating to (drilling) counties.”

Travis Windle, a spokesman with the Marcellus Shale Coalition, was one of several to challenge Kelsey’s findings this week. He said the coalition’s numbers show that 83 percent of new hires are from the five-state region of Pennsylvania, Ohio, West Virginia, Maryland and New York.

Those numbers reflect local companies’ “commitment to hiring and creating employment opportunities locally,” Windle said.

“While some shale detractors continue to attempt to minimize this industry’s far-reaching economic benefits, particularly as it relates to job creation, the facts tell a very different story,” Windle said in a statement. “According to top regional labor leaders, shale ‘has been a godsend’ and a ‘lifeline to family-supporting jobs.'”

Rob Boulware, a spokesman with gas company Seneca Resources, agreed with that assertion and said the Marcellus shale industry has created a reverse “brain-drain” in the area.

It wasn’t long ago when people eager to pursue opportunities in the oil and gas industry had to leave the region, he said. But the recent boom is allowing those people to return home, and it’s not fair to characterize western Pennsylvanians who left the area and returned as “outsiders.”

Boulware said he has encountered plenty of people who left the area and returned when job opportunities became available. One of his co-workers, originally from the region, had to move to New York and then Texas before returning to find work here, he said.

“Does that make him an outsider, or an insider coming home?” Boulware said.

Boulware questioned Kelsey’s intent with his study and asserted that Kelsey, who has been spotted at anti-drilling events, has ulterior motives. “If you look at the numbers, they’re presented in a manner that’s convenient for his story,” Boulware said.

Even if every Marcellus shale job isn’t going to local people, communities are still seeing an increase in their tax bases, which helps the community at large anyway.

“The more you look at it, the numbers aren’t as bad as someone is making them out to be,” he said.

Jack Manning, chairman of the Beaver County Chamber of Commerce’s economic development task force, agreed that the numbers have changed since 2011, even though drilling activities have subsided a bit this year.

“Some of the drilling has backed off, but I know local companies are doing really well,” he said. “I know those numbers have changed significantly.”

Manning said that also applies to auxiliary construction and other jobs that are an offshoot of the Marcellus industry.

This article was written by Jared Stonesifer from Beaver County Times, Pa. and was legally licensed through the NewsCred publisher network.

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