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Direct Employment in Natural Gas Development Declines by One-Third in Pennsylvania

Jobs in Pennsylvania directly tied to natural gas development declined by about one-third in the second quarter, according to data from the state Department of Labor and Industry (DLI).

In a Marcellus Shale update released Thursday, DLI reported that direct employment in natural gas development totaled 19,623 in 2Q2016. The agency added that over the last nine years, with the boom in Marcellus development, direct employment in the sector grew to the current total after starting the period at 9,017 jobs -- an increase of 10,606 jobs overall.

"This increase in direct employment led to an additional estimated 6,284 jobs at suppliers and 9,839 jobs at companies that provide goods and services to the industry's employees," DLI said. The agency added that 52,531 people were employed in either natural gas extraction development, by suppliers to the industry, or at ancillary companies that provide goods and services to industry employees.

But according to StateImpact Pennsylvania, DLI data showed direct employment in the sector totaled 28,926 in 2Q2015, and there were 72,675 jobs in related industries. That means direct jobs and related jobs declines by rates of 32.1% and 27.7%, respectively.

DLI said it calculated the latest employment figures using data from six data classifications at the U.S. Bureau of Labor Statistics -- specifically, the North American Industry Classification System (NAICS) codes for cured petroleum and natural gas extraction (NAICS 211111), natural gas liquid extraction (21112), drilling oil and gas wells (213111), support activities for oil and gas operations (213112), oil and gas pipeline and related structures construction (237120) and pipeline transportation of natural gas (486210). The state agency said it also used IMPLAN, a macroeconomic model that estimates the economic and fiscal effects of investments.

"This new methodology replaces the previous one published in the Marcellus Shale Fast Facts, which sought to track employment change over time through the use of the six core industries and an additional 29 ancillary industries considered to be related to Marcellus Shale activity," DLI said.

"While the majority of Marcellus Shale related employment was found in these core and ancillary industries, not all establishments in these industries were involved in Marcellus Shale, which led to an over estimation of actual Marcellus Shale activity employment levels."

DLI said that under the previous methodology, all workers involved with highway construction, steel mills and coal-fired electric power plants, as well as those classified as truck drivers and sewage treatment plant operators, were included in the Marcellus Shale job figures.

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