Tuesday, June 21, 2011

Politics Trumps All: Fracking Opposition Has Little to do With Water Safety or Public Health

DNC donors laughed at President Obama last night as he delivered remarks claiming he had created 2.1 million jobs over the past 15 months. It is of course a laughable claim as over 2.5 million jobs have been lost during this administration. Maybe he meant that 2.1 million jobs had been created or saved. It is the same thing after all.

Last month, the Pennsylvania Department of Labor and Industry published a report that showed a nearly 1300% increase in core Marcellus industry jobs in the Northern Tier counties of Bradford, Sullivan, Susquehanna, Tioga and Wyoming since 2008." That nearly 48,000 people have been hired in the last year by industries related to drilling in the Marcellus Shale formation, and 71% of those people were Pennsylvania residents".

This report was good news to everyone but the organized opposition to hydraulic fracturing, and confirmed anecdotal evidence from multiple sources that economic activity in the Northern Tier was hopping. This report cut against the meme that was being propagated by the anti-fracking coalitions who claimed that shale gas drilling would not benefit the local economy, that the hires that did occur would be brought in by big oil and that the only jobs that would be produced were those of truck drivers who would tear up the roads and spill brine fluid into pristine streams, lakes and ponds.

It didn't take long for the expected rebuttal was published. Actually it took only about six weeks for the Keystone Research Center (KRC) to crunch their own numbers and come up with a paltry 10,000 jobs created by the mighty Marcellus. In a report published today, Stephen Herzenberg, Executive Director of KRC, this editorial on the full policy brief. (Emphasis mine, for effect)

  • The 48,000 figure refers to “New Hires” — additions to employment. New hires are not the same as jobs created because many new hires replace workers who have quit, been fired or retired. Over the same period that Marcellus industries reported 48,000 new hires (the fourth quarter of 2009 to the first quarter of 2011), there were 2.8 million “new hires” in all Pennsylvania industries but only 85,467 jobs were created. This dramatic difference makes clear that the number of new hires by itself is not a meaningful indicator of job creation.
  • Since the fourth quarter of 2009, Marcellus “Core” and “Ancillary” industries — as defined by the Center for Workforce Information and Analysis (CWIA) of the Pennsylvania Department of Labor and Industry — created 1.7% of all new hires in Pennsylvania, one out of every 59.
  • An accurate picture of the contribution of the Marcellus Shale to recent growth of jobs in Pennsylvania requires the use of a data base that directly measures “employment” and “jobs.” Using such a jobs data base, CWIA finds that Marcellus Core industries in Pennsylvania created 9,288 jobs between the fourth quarter of 2007 and the fourth quarter of 2010. (Note: we use a different time period for the jobs data base than the new hires data base because CWIA does.) Marcellus Ancillary industries actually lost 3,619 jobs in this period so that, taken together, Marcellus Core and Ancillary industries created 5,669.
  • The number of jobs created by Marcellus industries is small — less than 10% — compared to the 111,400 increase in jobs in all state industries since Pennsylvania’s recent employment trough in February 2010.

All right, fair enough, I am not a statistician and haven't seen the numbers and sources of either report, but I do wonder why Mr. Herzenberg would take the exact opposite position in 2010 when his group was busy buttressing the claims of President Obama that the economic stimulus was some sort of success for Pennsylvania. An October press release by KRC stated that "federal action saved thousands of jobs in every region; regional unemployment would be 15% or higher in many parts of the state". You can read the entire press release here, or read the full report entitled, "Getting Pennsylvania's Economy Back on Track: Federal Policies Save Thousands of Jobs and Prevent Much Higher Unemployment Across Pennsylvania", at the link.

In the press release both Stephen Herzenberg and labor economist Mark Price state: (emphasis mine, for effect)

  • 20% in the City of Philadelphia and nearly 15% in the Philadelphia metro area, including Bucks, Chester, Delaware, Montgomery and Philadelphia counties and parts of New Jersey and Delaware (110,000 jobs saved);
  • 17% in the Scranton-Wilkes-Barre metro area (15,000 jobs saved);
  • Nearly 17% in Erie County (5,500 jobs saved);
  • Nearly 16% in Altoona (over 5,000 jobs saved);
  • 15% in the Allentown-Bethlehem-Easton metro area (27,000 jobs were saved by federal intervention);
  • 15% in the Pittsburgh metro area (76,000 jobs saved);
  • 15% in the Reading metro area (9,000 jobs saved);
  • 13% in the York-Hanover metro area (nearly 14,000 jobs saved);
  • Above 12% in the Harrisburg-Carlisle metro area (21,000 jobs saved);
  • Above 11% in Lancaster County (14,000 jobs saved).

So by his own accounting not a single job in Pennsylvania was created by President Obama's economic stimulus boondoggle, but is the veritable savior of the Pennsylvania economy and through private investment, the Marcellus shale creates/saves 48,000 jobs and this is considered tantamount to destroying the middle class while simultaneously polluting all fresh water and poisoning women and children. Not bad for an endeavor that has yet to cost the taxpayer a single dollar.

I have long thought much of the animosity demonstrated to hydraulic fracturing for natural gas in the Marcellus Shale was politically motivated. This adds yet another confirmation to that suspicion.

While KRC continues to publish statistical analysis designed to confirm a desired outcome the mighty Marcellus continues to produce good, high paying jobs to the people and drive Pennsylvania out of recession. Today, the Pittsburgh Post-Gazette reports that "the Pittsburgh metropolitan area is weathering the recession better than many other parts of the country, partly because of Marcellus Shale production"

A report released by IHS Global Insight concludes "that many areas of Pennsylvania, including the Pittsburgh metro area, are benefitting from the Marcellus Shale drilling activity. That certainly is giving Pennsylvania a boost relative to the rest of the country in terms of employment and gross economic output."


It didn't take long for the DRC report to be shredded to tiny bits and pieces.

From Marcellus Fast Facts which gathers most of its data from the Quarterly Census of Employment and Wages (QCEW):

The economic impact of responsible shale gas development is being felt in every corner of the commonwealth:

Family Sustaining Wages

  • “The average wage in the core industries was $73,150, which was about $27,400 greater than the average for all industries.” (Center for Workforce Information & Analysis, June 2011)
  • “The average wage in the ancillary industries was $61,871, which was more than $16,100 greater than the average for all industries.” (ibid)

Employment Impact

  • “Areas with significant Marcellus Shale drilling activity have seen notable decreases in unemployment rates.” (ibid)
  • “The Northern Tier Workforce Investment Areas (WIA) experienced an increase of employment growth of over 1,500%.” (ibid)
  • “The Central WIA was second in terms of employment growth by volume and by percentage with an employment increase of almost 1,000%.” (ibid)
  • “Significant employment gains were seen in each WIA that had substantial Marcellus Shale drilling activity.” (ibid)

Infrastructure Investment

  • “Marcellus shale drillers spent $411 million in the past three years to help rebuild Pennsylvania roads…” (Pittsburgh Tribune-Review, June 21, 2011)
  • “Since 2008, approximately 21% of the payments have been made toward local roads, while approximately 79% went toward improving roads maintained by the state.” (MSC press release, June 21, 2011)

Tax Revenue Generated by Responsible Marcellus Development

  • “Drilling Industry Paid More Than $1 Billion in State Taxes Since 2006, Tax Payments in First Quarter of 2011 Already Surpass 2010 Totals” (Dept. of Revenue press release, May, 2, 2011)
  • “The Revenue Department’s analysis, which breaks out tax payments from oil and gas companies and their affiliates through April 2011, indicates that 857 of these companies have already paid $238.4 million in capital stock/foreign franchise tax, corporate net income tax, sales/use tax and employer withholding to the state in 2011. These figures from the first quarter of this year already exceed by nearly $20 million the total tax payments made in all of 2010.” (ibid)
  • “The data indicate that counties with 150 or more Marcellus wells experienced an 11.36 percent increase in state sales tax collections between 2007 and 2010.” (Penn State University, February 27, 2011)
  • “In counties with ten or more Marcellus wells, returns reporting royalty income increased 44.1 percent and tax income increased 325.3 percent.” (ibid)

Marcellus Shale Coalition president and executive director Kathryn Klaber issued the following statement:

“In the heat of a budget battle in Harrisburg, opponents of responsible natural gas development have launched yet another thinly-veiled, politically-timed attack on an industry that is creating family-sustaining jobs for men and women across the Commonwealth. But families across Pennsylvania are seeing firsthand the reality of Marcellus development: it is fueling economic growth, employment, and investments in roads and infrastructure at rates not seen in decades.

“According to the Department of Labor and Industry, unemployment in counties with Marcellus development remains below the state average. Along Pennsylvania’s Northern Tier, where development is most concentrated, employment has jumped 1,500 percent since the end of 2007. Furthermore, Marcellus operators are investing billions of dollars into Pennsylvania’s economy – from constructing state-of-the-art operating facilities, to building new offices, to leasing land for responsible development and driving economic growth in our rural communities. Take into account the more than $1 billion in taxes generated by Marcellus activity over the past half-decade, stable and affordable energy prices made possible by responsible natural gas development, and the ancillary employment impacts cascading through businesses across the Commonwealth, and only then can the full act of Marcellus development be realized. Once again, the rhetoric of opponents of Pennsylvania’s clean and abundant energy supply is simply not squaring with reality.

“People who were out of work and now have jobs thanks to Marcellus development are more than statistics, and they are proud that they now have jobs. Attempting to trivialize their new employment opportunities simply to fulfill a political agenda not only denies the real economic benefits from Marcellus, but also demeans the very people who are employed.”

If you think opposition to natural gas drilling in New York and Pennsylvania has anything to do with water purity, environmental contamination, or public health just remember it is mostly about politics and a very vocal minority that is willing to sell you out to maintain the status quo.Please bookmark!

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