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160,000 jobs gone

It almost seems like a magic act, but Pennsylvania literally lost 160,000 natural gas industry jobs in a blink of an eye.

For several months now, job cuts have been due to companies scaling back and cutting costs, but this is not the case with Pennsylvania.  The blame can be pointed towards Governor Tom Wolf’s new administration.  Last week, the state Department of Labor and Industry shifted the way it records employment in the Marcellus Shale natural gas industry.  According to Gov. Wolf’s Secretary of Planning and Policy John Hanger, the numbers the department had “were a joke” and “the errors were so glaring, they had to be changed.”

As reported by State Impact Pennsylvania, “Roughly 30,000 people work directly in six ‘core’ oil and gas industry jobs. But starting in 2011, the labor department began publishing a monthly booklet called Marcellus Shale Fast Facts, which showed about 200,000 other jobs in 30 ‘ancillary’ industries. This figure included every road construction worker, trucker, and steel worker in Pennsylvania– whether they had ties to the gas industry or not.”  When people in the industry were referring to the number of jobs in the Marcellus, the core and ancillary numbers were added together, which supports the idea of the Marcellus Shale industry supporting nearly 250,000 jobs in Pennsylvania.  However, that is not true.

According to the labor department’s recent analysis, which was calculated by an economic analysis software called IMPLAN (Impact Analysis for Planning), the Marcellus Shale industry supported 89,314 jobs during 2014’s third-quarter.  This number includes direct jobs and that are industry-related. This newly calculated number clearly proves the industry does not account for 250,000 jobs.  However, Hanger says this number is “important” and it is “an impressive number.”

While having the true number is nice, there are those that feel differently about the labor department’s new accounting method.  David Spigelmyer, the head of the Marcellus Shale Coalition, believes the “the change as being politically motivated,” since drillers are currently trying to battle Gov. Wolf’s proposed severance tax that would replace the state’s current impact fee.  Spigelmyer made the following statement regarding the change:

This administration’s words continue to be detached from its actions as it relates to policy matters and enhancing Pennsylvania’s energy leadership … Why put this important economic analysis in the hands of the governor’s political team rather than relying on career state policy analysts?

In response to Spigelmyer’s opinion, Hanger stated the following:

I think that goes to further proof we were not being political … The career staff over at [Labor and Industry] did this analysis. I didn’t do this. This is an attempt to provide people with good information about this industry. Nothing more, nothing less.

4 comments

  1. I studied these phony jobs projections several years ago as a fractivist in Southern Illinois.

    You are missing another key point. This IMPLAN computer program for projecting jobs is a black box. Last time I looked in Pennsylvania, it was counting hunting, fishing, and tourist jobs as derivative of fracking. As we mathematicians would say Garbage (data) in, Garbage (data) out. But it is difficult to tease out the assumptions of a computer program whose formulae are not revealed.

    There is however one thing we know about IMPLAN. It varies with a range from most labor intensive to least labor intensive types of industry. The industry propagandists classified fracking as most labor intensive and so they said it was going to make 2 million plus jobs nationwide. But actually fracking is a capital intensive business. Coal mining is much more labor intensive. That classification changes the output of alleged jobs created dramatically.

    Finally, one can check IMPLAN hypothetical projections by actually looking at the job counts by County in each of the fracking counties. I did that long ago in W Va. Very few (net) jobs were actually created in the fracking counties of W. Va.

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