Calling development of the Marcellus Shale play “a great opportunity” for New York, the Public Policy Institute of New York State Inc. (PPI) said a scenario where 500 gas wells were drilled every year in the state would create 62,620 jobs, $2.7 billion in added value and $1 billion in local, state and federal tax revenue.

Meanwhile, two shale geology experts say three counties in New York’s Southern Tier — Broome, Tioga and Chemung — will produce the most natural gas if the state’s de-facto moratorium on high-volume hydraulic fracturing (fracking) is lifted.

In its July report, “Drilling for Jobs: What the Marcellus Shale could mean for New York,” the PPI announced its support for lifting the moratorium and said it was crucial for New York to consider the economic benefits of developing the Marcellus.

“Significant economic benefits achieved in Pennsylvania provide clear evidence of the investment and job growth related to shale development,” the PPI said, adding that 48,000 private-sector jobs were created in Pennsylvania in 2010.

The PPI found that in Pennsylvania, annual wages in six core Marcellus Shale employment categories — including roustabouts, petroleum engineers, engineering managers and truck drivers — averaged $73,159 in 2010, $27,400 more than the statewide average for all industrial jobs. Oil and gas companies also paid more than $1.1 billion in state taxes since 2006.

If the moratorium is lifted, the PPI estimates 12,524 jobs would be created if 100 wells were drilled every year in New York, adding $546 million in value and $200 million in tax revenue. At 300 wells per year, the number of jobs created jumps to 37,572 with $1.6 billion in added value and $600 million in tax revenue.

Cherie Messore, spokeswoman for the Independent Oil & Gas Association of New York (IOGA), said the group affirmed the PPI’s findings. “It’s always very encouraging to have our beliefs affirmed that economic growth for New York state is just at the tip of our fingers,” she told NGI.

In an interview with the Ithaca Journal, geologists Terry Engelder and Gary Lash said that if the moratorium is lifted in New York, drilling would more than likely start in the three aforementioned counties.

“There are certain geologic parameters that determine the economic qualities of gas shale,” Engelder, a professor at Pennsylvania State University, told the newspaper. “In New York state, the combination of these parameters is optimal under Broome, Tioga and Chemung counties.”

Lash, a geosciences professor at SUNY-Fredonia, concurred. “Broome County should be very productive,” he told NGI on Thursday. “The Marcellus is deep there, especially in the southern part of the county.”

The New York Department of Environmental Conservation (DEC) released its recommendations on fracking on June 30 (see NGI, July 4). Among the recommendations were requiring full disclosure of fracking chemicals and a ban in all primary aquifers, the watersheds of New York City and Syracuse, and all state-owned land, including state parks. The DEC is set to begin a 60-day public comment period on its recommendations this month.

In related news, the natural gas industry in Pennsylvania could need to fill nearly 31,000 jobs to keep up with growing shale development in the state over the next three years, according to a statewide workforce assessment study by the Pennsylvania College of Technology and the Penn State Cooperative Extension. The study projected a 60% increase in new wells through 2014, requiring between 18,596 and 30,684 direct jobs and between 9,800 and 15,900 entirely new positions.

The study only considers the jobs required to develop and bring wells into production, estimating that each well requires a workforce of around 420 people across 150 different occupations. That figure can fluctuate based on development strategies, though, because while multi-well pads reduce surface disturbances, they also require about 25% fewer workers, according to the report.

And because more than 98% of all industry jobs come in the pre-drilling and drilling phases, much of the workforce for any given project won’t be needed once all the wells have been drilled and associated infrastructure is built. However, those jobs could move to new drilling locations.

The study estimated its totals using well and rig count projections gathered from industry surveys, but the groups said they used no industry funds to compile the assessment (see NGI, July 25).

Although the groups have previously estimated workforce needs on a regional level in Pennsylvania, the new study is the first attempt to quantify how many jobs will be needed across the entire state. Still, looking regionally, the study found that early job growth in northeastern Pennsylvania should continue, but at a “relatively moderate rate,” while job growth in southwestern Pennsylvania should be “significant” as companies develop wells and build out the infrastructure for liquids-rich gas processing needed for the Upper Devonian, Marcellus and Utica Shales present in the region.

Northwestern Pennsylvania, home to limited development to date, should see more wells in the next few years, while southeastern Pennsylvania should see an uptick in service industry jobs. And while early employment relied heavily on skilled workers from outside the state, the study found that Pennsylvania residents now make up as much as 75% of all new hires in the industry.

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