Watchdog Study Refutes Natural Gas Economic Outlook
The natural gas industry has been suffering a few black eyes here and there in Pennsylvania and nationwide lately. They’re being protested, there are increasing complaints of explosions, spills, and accusations that their operations have been causing people and livestock to get sick. There’s untold damage to the pristine forests and streams of Pennsylvania, which could get worse if the Delaware River Basin Commission decides on Nov. 21 to allow drilling to go forward and start development in Philadelphia’s drinking water source.
But projected economic impacts have been a real feather in the industry’s cap. The Marcellus Shale Coalition, for example, released a press release this summer entitled “It’s a Ga$.” Natural gas is being heralded as the new gold, and PA Republican Congressman Pat Meehan called gas a “bonanza.”
Reports out of Penn State and the Public Policy Institute of New York project tens of thousands of jobs will be created as a result of natural gas development; the MSC calls for hundreds of thousands. Two reports released today by the watchdog group Food and Water Watch show that those projections are optimistic at best, and based on flawed numbers. They refute the last point the natural gas industry used to defend its practice of drilling wells and releasing underground methane gas using sand, water, and chemicals, in rural and wild areas.
Natural gas executives hone in on two arguments to push natural gas development. First, natural gas would lead to America’s energy independence.
“A Food and Water Watch report released earlier this year refuted this argument, showing that the major players in shale gas are multinational oil and gas companies with plans to export U.S. shale gas outside of the U.S., likely to Asia,” said Emily Wurth, Water Program Director at Food and Water Watch, during a phone press conference today. Secondly, they said gas would lead to billions of dollars in investment and a golden age of job creation.
“Our analysis finds that unlike their claims, shale gas is not a cure-all for our nation’s economic woes. In fact, most of the gains to be made from shale gas drilling will end up as profits in the pockets of oil and gas industry executives,” Wurth said.
“The Public Policy Institute claimed that drilling and fracking 500 new wells every year by 2018 could create about 60,000 new jobs in New York,” said researcher Hugh MacMillan, who has a PhD in applied math. “That’s relative to a baseline of no shale gas drilling and fracking in the state at all. That claim works out to be about 125 jobs per well. Our [Food and Water Watch] report shows, however, how numerous flaws led to this rosy projection.”
The official numbers being bounced around are largely the work of a researcher at Penn State named Timothy Considine, funded by the gas industry. MacMillan said Considine’s reports “exaggerated the projected number of jobs directly related to shale gas development.” He said the reports also “exaggerated the economic spillover effects from these so-called direct jobs.”
“We detailed and corrected the flaws that we found using assumptions generous to the oil and gas industry. Our corrections show that, actually, the economic forecasting models being used only support a claim of 6,600 jobs for New York in 2018 from drilling 500 wells per year,” MacMillan said. “This is a little over one-tenth of the 62,000 jobs the Public Policy Institute claimed.”
He said even 6,000 jobs was an optimistic number.
Helene Jorgensen, a researcher with a PhD in Economics from American University, said industry predictions were “greatly inflated.” Her research looked at five counties in New York where no gas drilling was taking place, due to a moratorium there, compared to five adjacent counties in Pennsylvania where drilling was going full-steam. The counties had similar demographics and economies. Between 2007 and 2010 in Pennsylvania, “private sector employment actually declined by 1500 in the five counties with fracking,” she said.
The Food and Water Watch studies counted jobs that would be created for locals – they didn’t include the out-of-state skilled workers who do most of the drilling and fracking work. The studies also accounted for the negative impacts of drilling on tourism and agriculture.
“Water contamination and air pollution can lower productivity and increase costs in agriculture and lead to bankruptcy,” Jorgensen said. “Noise pollution and landscapes scarred by drilling sites can make an area less attractive to visitors who may choose to vacation elsewhere.”
In the entire state of New York, Jorgenson said the Food and Water Watch analysis predicted only 1,012 jobs to be added if drilling starts at a rate of 500 wells per year until 2018. Added to the rest of the jobs projected to be added to the economy, that means “that jobs created from fracking would increase employment by only one-hundredth of one percent,” she said.
That’s in New York State. In Pennsylvania, drilling has been going on in earnest for nearly five years and counting; Louisiana’s industry has been there for nearly ten, with reports of effects getting grislier. A citizen watchdog in North Dakota has been trying to get the word out about fracking for oil in North Dakota. Same technology, different goldmine. Nasty side-effects.
It’s hard to see how an industry pushing a multimillion dollar public relations campaign touting its benefits to the economy and the environment can outright lie to Americans. It’s even more astonishing that their lies are the basis for the actions of policy makers, who aren’t just letting it go ahead, but are promoting it: an industry that causes sickness, water contamination, forest degradation, traffic, and greenhouse gas emissions, all to get to a fossil fuel that will ultimately be sent overseas.