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Industries tied to fracking

By Tom McParland, The Youngstown Vindicator, Ohio

YOUNGSTOWN — At the Industrial Waste Control Inc. facility in Youngstown, a group of radiological engineers are trying something different when it comes to handling potentially radioactive material generated from shale drilling.

Industrial Waste Control/Ground Tech Inc. received a permit to use a new method, which offers “a better, faster method to test materials prior to disposal in Ohio landfills.”

The testing will be done by the Pennsylvania-based Austin Master Services.

The company uses the high-tech method of “in situ gamma spectroscopy” to scan the outside of entire containers to determine whether radioactivity is present at higher than naturally occurring levels — without even opening the box.

AMS, which specializes in radiological, remediation and engineering services, is the first company in Ohio to apply the technology to the oil and gas industry. Usually, radioactive testing requires workers to take a direct sample of the material, risking exposure.

The standard method, however, samples only a small part the material in the container, and it can take up to three weeks to receive the results.

But AMS’s new technology allows the company to test up to 90 percent of the waste, and the results come within minutes, said Matthew Campbell, CEO of AMS.

“In addition to being a faster test, it’s actually a better and more reliable test,” he said.

The testing can either be done in the field or at the Industrial Waste Control facility at 240 Sinter Court.

Though the company hasn’t yet secured any customers, it has met with major players in the Marcellus and Utica shale plays, including Hess, Chesapeake and Consol, Campbell said.

AMS is just one of many companies in a variety of industries outside of Ohio’s oi and gas industry to benefit from increased drilling within the Utica and Marcellus shales.

Those fields, known as ancillary industries, are not directly related to shale drilling, but they are tied to its success.

Ancillary industries support the six identified core oil and gas fields — natural-gas and petroleum extraction, natural gas extraction, well drilling, operations support, pipeline construction and pipeline transportation. Many were established long before the drillers came to town, but they have benefited from higher demand for their goods and services.

The Ohio Department of Jobs and Family Services’ January “Quarterly Economic Trends for Ohio Oil and Gas Industries” report tracked the growth in ancillary industries and compared it with core-shale-related fields, comparing data from the second quarter of 2013 with the same period two years earlier, before drilling took off.

In two years, the 30 ancillary industries that ODJFS tracked added a total of 4,913 jobs in Ohio, for a 2.9 percent bump in employment. The core industries tacked on 3,876 jobs during the same period, a 56.4 percent increase from 2011.

But the high-percent change in core fields can be misleading because many of those jobs have gone to transient workers brought in to operate wells by out-of-state drillers.

Also, unlike ancillary industries, core-drilling industries are relatively new to Ohio and didn’t have the base to build on, resulting in a huge jump, said Coretta Pettway, chief of the Bureau of Labor Market Information at ODJFS.

Of the supporting fields, remediation services and industrial wholesalers saw the biggest leap in jobs, with more than 1,000 added in each field. Road construction placed third with 987 jobs added from 2011 to 2013.

There was also a geological breakdown when it came to employment, ODJFS found.

Shale-related ancillary industries in Jobs-Ohio’s Nelsonville region — which encompasses the southeastern part of the state, where drilling activity is hottest — spiked 10.5 percent. The Columbus area and the Cleveland region, which includes the Mahoning Valley, saw ancillary employment grow by 4.9 percent and 1.7 percent, respectively. Meanwhile, the jobs in the Cincinnati and Dayton regions decreased.

The average wage for ancillary careers outpaced that of all industries across the state by a significant margin. From the third quarter of 2012 to the second quarter of 2013, supporting industries paid their workers $59,516 on average, compared with $44,532 across all fields.

The highest-paying ancillary fields were fossil-fuel power generation at $99,679 and petrochemical manufacturing at $96,088. General freight trucking and lessor and other real-estate property industries round out the low end of the pay scale at $39,671 and $27,781, respectively.

The core shale-related fields boasted a higher average salary of $70,160 but, again, experts found that number could be misleading in terms of its economic impact.

In Cleveland State University’s Ohio Utica Shale Gas Monitor report, researchers found that employment in some of the state’s most-active drilling overall employment fell because jobs went to workers from outside the county. Still, hotels and restaurants saw an uptick in revenue, and counties, in turn, saw greater sales-tax receipts.

Ned Hill, one of the report’s authors, said he plans to release the next Ohio Utica Shale Gas Monitor this summer.

Meanwhile, ODJFS was set to release its updated report, which would feature a list of “in-demand” careers, based on long-term projections, job-posting trends and a forecasting survey.

The 20 occupations would include chemical engineers, machine engineers, truck and heavy-equipment drivers, Pettway said.

As for AMS, the message was consistent with what other businesses have told Shale Sheet and The Vindicator: They’re glad for the opportunity, and they hope more shale investment comes in the future.

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