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New Report Says Oil, Gas Industry Less than Honest About Job Creation

The Multi-State Shale Research Collaborative, a group of nonpartisan, state-level research organizations, has released an economic study showing that far fewer new jobs have been created in states where Marcellus and Utica shale development is underway than previously reported.

The study, released on Thursday, is the latest in a volley of those that contain far different results about the economic impact that the shale boom has had in states such as Pennsylvania, Ohio and West Virginia.

Although the report acknowledges that shale drilling has created a cushion of jobs in those parts of Pennsylvania and West Virginia that were hardest hit by the Great Recession, it says job creation in Ohio has been slow to materialize, while overall employment opportunities across all three states have failed to account for a large share of overall employment.

The research collaborative's study stands in stark contrast to one released last year by IHS Global Insight (see Shale Daily, June 14, 2012) that said the nation's oil and gas industry supported 1 million jobs in 2010, while projecting the number would likely grow to 1.5 million by 2015. In December, IHS put out a separate study that said shale development in Ohio's Utica formation had already created 38,000 jobs. Those studies were funded in part by the U.S. Chamber of Commerce.

But during a conference call to discuss the report, Amanda Woodrum, an energy-researcher at Policy Matters Ohio, said that the state's shale boom has "been relatively minor," with fewer than 3,000 jobs -- or less than one-tenth of the state's total employment -- created to date.

Since 2005, according to the report, shale-related employment in the U.S. has increased by more than 283,000 jobs. During the same time, the report said, employment in the field grew by 2,441 jobs in Pennsylvania; 6,022 jobs in West Virginia and 2,791 jobs in Ohio.

But the report maintains that fewer than four new direct shale-related jobs have been created for each new well drilled across a six-state swath in the Appalachian Basin. The report went on to say that such metrics are far below claims made by the industry in similar studies that have been as high as 31 direct jobs created per well.

"Industry supporters have exaggerated the jobs impact in order to minimize or avoid altogether taxation, regulation and even careful examination of shale drilling," said Frank Mauro, executive director of the Fiscal Policy Institute in New York.

Mike Chadsey, a spokesman for the Ohio Oil and Gas Association, said that claim was bogus and added that the study was questionable.

He noted that it was funded in part through a grant by the Park Foundation, a nonprofit organization that has been a vocal opponent of horizontal hydraulic fracturing. He said the level of taxes paid by oil and gas companies in a number of states, especially in Ohio and Pennsylvania, can't be ignored.

The Multi-State Shale Research Collaborative was established to monitor employment trends and the community impacts of energy extraction in the Marcellus and Utica formations. It counts among its members the Fiscal Policy Institute of New York, Policy Matters Ohio, the Keystone Research Center, the Commonwealth Institute for Fiscal Analysis in Virginia and the West Virginia Center on Budget and Policy.

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