While construction projects and jobs in non-shale gas related industries declined sharply from 2008 to 2014, tradesman in five states within or near to the Marcellus Shale worked more hours and benefited heavily from investments in the formation’s development, according to a new study.
The report, commissioned by the Oil and Natural Gas Industry Labor-Management Committee and conducted by researchers at the University of Illinois, set out to take a look back at just one part of the economy in Ohio, West Virginia, Pennsylvania, Virginia and Maryland that benefited from unconventional development in the Marcellus Shale over the six year period.
“A preliminary examination of employment data in states related to the Marcellus Shale play reveals that natural gas exploration has been a strong engine for growth,” the study’s authors wrote. “While employment in non-shale related oil and gas industries sharply declined from 2008 forward, employment activity on natural gas projects in the Marcellus Shale play rose significantly.”
According to data collected for the study, construction and maintenance spending for oil- and gas-related projects reached $5 billion in 2013, growing by 61% from 2012. Last year, those opportunities created 4,600 construction jobs in eight trades across the five states, with spending continuing to rise this year, where it already stands at $6.5 billion.
As a result of shale-related construction work in 2013, more than $247 million was paid out to workers in the construction industry, the study found. The report also said that from 2008 to the first half of 2014, more than 72 million hours of direct and indirect construction labor has been worked on oil and gas projects in the Marcellus. Those hours, the authors said, translate to 36,321 actual construction workers, based on a standard 2,000 hours of work for each employee annually.
More realistically, the study said, the number of actual construction workers employed at oil and gas projects was likely more than 45,000 based on 1,600 annual hours of work.
The study mainly looked at union-related data, which it obtained from the AFL-CIO’s North America’s Building Trades Unions, the market data firm Industrial Info Resource and a collective bargaining entity called the National Maintenance Agreement Policy Committee. The authors examined direct, indirect and unrelated oil and gas industry construction work to get a sense of the opportunities the Marcellus has created for thirteen trades, including boilermakers, operating engineers, plumbers, pipefitters and electricians.
The report primarily examined hours worked on Marcellus Shale projects, such as compressor stations, meter stations and cryogenic processing plants in Ohio, Pennsylvania and West Virginia.
It also found that construction activity in non-shale related oil and gas industries has fallen by 53.7% since 2008, when the jobs examined reached a peak of 14.8 million labor hours. Last year, the report said this group of industries generated just 6.6 million hours for eight of the trades highlighted in the study. At one time, 7,100 full-time construction jobs were created annually in the states included, but that number has since dropped to about 3,300 jobs.
A similar report was released in March by the U.S. Census Bureau, which said from 2007 to 2012, the mining, quarrying and oil and gas industry extraction sector was among the fastest-growing in the nation, with employment increasing by 23% to 903,841 jobs over the period (see Shale Daily, March 27). The oil and gas industry alone, the bureau said, employed roughly 192,000 people for a 27% increase over the five-year period.
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