Appalachian Shale Revolution Delivers Real Growth and Great Jobs

Tom Shepstone
Natural Gas NOW

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The Appalachian shale revolution has been an astounding event. It has lifted up a region often thought to be synonymous with poverty, creating opportunity.

The U.S. Bureau of Labor Statistics has come out with an knock ’em dead report on the sheer magnitude of the Appalachian shale revolution. The boring title — “Shale gas production and labor market trends in the U.S. Marcellus-Utica region over the last decade” — distracts from the power of the data in illustrating what natural gas development has done economically for the region. It has created huge numbers of jobs in not only producing the gas, but also building the pipeline infrastructure required to deliver this clean fuel to urban consumers who save thousands of dollars annually in energy costs as a result.

Although the BLS report doesn’t use the term, it is essentially an analysis of the impact of the Appalachian shale revolution. It maps the region by county and also shows how much natural gas each produced in 2016:

Marcellus–Utica shale gas production of Ohio, Pennsylvania, and West Virginia by county in 2016 (in million cubic feet)

The original map is interactive and yields the exact amount of gas produced in each. Here are the top 10 and Susquehanna is at the top of the heap, followed by Washington, Bradford and Greene Counties in Pennsylvania:

And, here’s how Appalachian shale revolution has evolved state by state as production has soared since 2007:

Shale gas production was only 0.001 Tft³ in Pennsylvania in 2007. Yet, by 2015, the Commonwealth, with 4.6 Tft³  of production, had overtaken Texas (4.4 Tft³) as the leading state in U.S. with respect to shale gas. That’s the Appalachian shale revolution by the numbers. “By 2016, Pennsylvania shale gas production had grown to 5.10 Tft³, compared with 1.21 Tft³ in West Virginia and 1.39 Tft³ in Ohio,” according to the BLS.

This production has transformed into real jobs and look where they’re being created; in pipeline construction and operation, support industries and extraction activities following drilling. The actual drilling of wells is the least of it, contrary to much of public opinion. All those jobs hire Pennsylvanians and hire local. They declined slightly in 2015 and 2016 due to low prices and efficiency gains but look at the long-term trend and realize not only that the pace of activity picked up significantly in 2017, but also that the job is shifting toward more and more permanent jobs.

Also realize there are a lot more pipelines needed and those workers, the bulk of whom come from the region and are members of local unions, have made great lives for them selves working one construction job after another over decades. There is nothing temporary about construction, only the individual projects.

There is also very encouraging growth in the number of business establishments with the Pennsylvania numbers doubling over a decade:

Once again, notice how important those pipeline jobs are and how drilling represents the smallest part of the picture.

Then, there are the wages, which is the big story. Here is the 2016 data and it reveals shale gas jobs in the Appalachian region yield wage premiums over and above all industries that ranges from 37.9% to 114.9%.

There’s really nothing more to say; the Appalachian shale revolution has delivered.

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