WKSU News: Utica Shale by the numbers

Thursday, December 1, 2011 Utica Shale by the numbers Energy companies say they'll need thousands of workers for oil, natural gas production in Utica shale Story by MHARI SAITO

In The Region:

Vast quantities of oil and gas trapped deep under much of eastern Ohio is generating intense excitement. It could bring a jobs bonanza. Energy companies say they'll need tens of thousands of workers to rev up oil and natural gas production in what's known as the Utica shale formation. ideastream's Mhari Saito takes a closer look at the numbers.

Utica Shale by the numbers

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Steve Linsky has been watching Ohio’s oil and gas industry up close. Just a few hundred years yards from his house east of Akron, stands a new oil and gas rig. It belongs to Chesapeake Energy, the nation’s second largest natural gas producer. The exploratory rig inspired Linsky to head to a job fair for Chesapeake, resume in hand.

Steve Linsky: It was like you see this oil derrick go up and then, it was very interesting. I would love to be a part of this.

Linsky and nearly 300 job seekers packed the Akron Holiday Inn Express last month hoping to find new futures in oil and gas. Technological gains now allow drillers to access resources deep under Ohio previously thought unattainable. The practices of horizontal drilling and hydraulic fracturing, also known as fracking, have its critics who argue the techniques endanger drinking water. But energy companies disagree. Chesapeake’s CEO Aubrey McClendon has been investing heavily in land rights in Ohio’s Utica Shale. At an energy summit in Columbus this fall, McClendon estimated the value of the Utica’s oil and gas reserves at half a trillion dollars.

Aubrey McClendon: If you begin to think about spreading that kind of wealth across five or six counties and east central Ohio, I think you begin to see that this will be the biggest thing, I think, to hit the state of Ohio economically since maybe the plow.

Politicians are thrilled about the possibility of jobs, especially if they go to Ohioans. Here’s how Governor John Kasich put it at that same energy conference.

John Kaisch: I tell people that we don’t want any foreigners working on those well heads. To me, a foreigner is somebody from Kentucky, Pennsylvania, West Virginia, Michigan and Indiana, OK? (laughter)

The projections of shale-related jobs and who fills them is a hot issue, but only part of the picture. Growth in domestic natural gas production has boosted jobs in other states. For example, demand shot up this year for freight cars to haul sand used in hydraulic fracturing. That’s created hundreds of jobs in Arkansas and Missouri where those cars are made.

In shale states, an estimate of how many jobs are produced really depends on who’s doing the asking. An industry-funded analysis says Utica Shale development will create over 200,000 jobs by 2015 in Ohio alone. Some economists aren’t buying it. Ohio State University Professor Mark Partridge says shale job projections could turn out to be like “green” energy projections.

Mark Partridge: I think your listeners would be aware that industries and politicians typically exaggerate their job impacts.

Partridge says its helpful to look at jobs studies in neighboring Pennsylvania’s Marcellus Shale. Two separate Penn State studies, issued a year apart, came up with dramatically different job creation numbers:

One analysis was funded by the oil and gas industry. It credits Marcellus drilling in 2009 with creating about 44,000 jobs in Pennsylvania. The other study of the same year came in at about half that number - about 23,000 jobs. Penn State economist Timothy Kelsey says his team differed from the industry-funded group because they found that not all the jobs and money related to drilling are staying in-state.

Timothy Kelsey: People who are living and working in the community tend to spend more than the people who are here temporarily, holding the jobs and yet spending their money back home. And when you take into account that leakage, the estimate, it’s still 23,000 jobs. It’s still a lot of jobs, but it’s nowhere near the large numbers that have been hyped here.

Whatever the number of jobs created in Ohio turns out to be, it’s bound to help the state’s unemployment rate. Sue Thomas Sikora says her government -funded employment agency, the Guernsey County Opportunity Center in southeastern Ohio, has been flooded with calls from oil and gas companies. On one day she had as many as seven companies call looking for hires and even leads on office space.

Sue Thomas Sikora: For so long we have worked with companies who have been laying off or closing and so in the past year to have witnessed this complete 180, with companies now needing people, we’ll do whatever it takes to fulfill their needs.

Since July, Sikora says her office has referred about 700 Ohioans for interviews. Sikora says at least 100 of those referrals now have jobs with energy-related companies.

Listener Comments:

Rail cars were mentioned guess what Columbus castings makes components for rail cars and are hiring.
I after seeing the economic impact of the Ohio Smoking Ban that was done by a Ohio State researcher that had received funding from anti smoking cartel members makes me highly suspect in the results of the study.
For a spread between 200,000 to only 20,000 jobs is a staggering amount. To me it would only make sense that with a spread so large perhaps a meeting is in order to validate the far more accurate numbers.
If the the Utica come in as hoped for there will be new jobs created due to the new found wealth. From new homes, the schools will want new schools with swimming pools, new cars, farm equipment school the whole nine yards. I myself will tend to believe the Oil and Gas Industry as to many Colleges have been taken over by special interest.

Posted by: Billy (Ohio) on December 22, 2011 9:12AM

I left my home state of Ohio in 1997 and moved to what I was told was wealth and joys Wisconsin alls its been for me is poverty not being able to eat and im making $17 and hour with high taxs and price goughing to make wisconsin rich by stores and employers who intentionally cheat you out of hours and make you pay bak unemployment cuz they the employer reported you hours wrong im done here and I will be returning home to Ohio I have 18 yrs of oil

Posted by: Victor Neville (ashamed to say Wisconsin) on December 3, 2011 4:12AM

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