Does Shale Gas Drilling Create Jobs for In-State Residents?

There’s no doubt that Marcellus and Utica Shale drilling creates jobs. But one of the criticisms often leveled is that jobs directly related to drilling are given to people from other states, like Texas and Louisiana and Oklahoma—states with experienced oil and gas workers who don’t need extensive training.

Recent employment numbers from West Virginia seem to lend credence to those concerns. The unemployment rate has risen slightly in WV, but more telling, employment of West Virginians who work directly in the oil and gas sector dropped slightly from 2010 to 2011. However, indirect jobs in other industries—like hotels, restaurants and retail businesses—have gone up due to drilling. It seems to be a mixed picture, at least in WV, with respect to job creation.

As West Virginia’s unemployment rate jumps to 6.9 percent, some Mountain State residents believe a hiring boom in the oil and natural gas drilling industry is just around the corner.

However, information from WorkForce West Virginia shows the Marcellus and Utica shale drilling industry has not created much direct employment over the past two years.

"We’ve not seen much change in employment in the oil and gas industry over the past year. Employment in oil and gas in 2010 was 2,244, dropping slightly to 2,179 in 2011," said WorkForce spokeswoman Courtney Sisk.

The presence of the drilling industry does lead to increased employment in certain areas, as restaurant and hotel owners report being very busy these days because of drillers working in the area. There are also companies that supply materials to the drilling industry that may hire more employees to meet these needs, while retailers may also see an upswing in some business because of mineral owners receiving spending money from lease and royalty checks.

However, the WorkForce statistics show that the number of West Virginia residents working directly for gas and oil drillers has not increased over the past two years, despite a continued upswing in drilling and fracking.(1)

At first blush, a little over 2,000 workers in the shale gas industry in West Virginia seems really low. Like, inaccurately low. But the WorkForce West Virginia numbers are for shale gas workers who are residents of West Virginia, not the total employment numbers for the drilling industry in WV.

IHS just released jobs numbers that show total numbers of jobs in the drilling industry for Ohio and Pennsylvania:

In 2010, Ohio had 31,462 jobs attributable to shale-gas production. According to the study, that number is expected to increase to 41,366 by 2015 and 81,349 by 2035.

Meanwhile, Pennsylvania has 56,884 jobs that are part of work in the Marcellus Shale. The study expects that figure to increase to 111,024 in 2015 and 270,058 by 2035.(2)

There’s no breakout (that MDN can find in the reporting) to show how many of those 31,462 Ohio jobs in 2010 were filled by Ohioans, and how many of Pennsylvania’s 56,884 jobs are filled by Pennsylvanians.

One thing is clear: As time goes on and the number of shale jobs increase, so too will the number of jobs going to in-state residents. It takes time to train a work force, and as training continues, “locals” will start filling more and more of the abundant shale gas jobs in the region.

(1) The Intelligencer/Wheeling News-Register (Jun 13, 2012) – Drilling Not Helping Jobless Numbers

(2) Youngstown (OH) Vindicator (Jun 13, 2012) – Shale jobs to multiply for years, study says