If you ask the oil industry, a boom in extracting gas from dense shale rock formations across the nation is fueling a surge in jobs and has the potential to create tens of thousands more in New York.
But those job creation claims are wildly inflated, according to the consumer and conservation group Food and Water Watch.
“Shale gas jobs projections do not stand up to scrutiny,” the group concluded in a report released today. “Empirical analyses of the actual economic impacts of shale gas development, not industry-backed projections from economic forecasting models, should be the basis of policy decision making.”
The group takes issue with a 2011 report by the Public Policy Institute of New York State, which looked at shale gas development in Pennsylvania as a model for what could happen in the Empire State. That report claimed that the development of 500 new shale gas wells annually in Allegany, Broome, Chemung, Steuben and Tioga counties over the next seven years could sustain 62,620 new jobs in New York (including 47,120 indirect or induced jobs).
But Food and Water Watch says that is an overly “rosy projection” based on methodological flaws, including the study’s reliance on a lower number of wells in a wells-to-jobs stat from Pennsylvania. Food and Water Watch says the projection also overlooks the number of jobs going to out-of-state workers with shale gas industry experience instead of New Yorkers. And the group also argues that the public policy institute used an inaccurately big multiplier — 3.04 instead of 1.92 — to estimate the number of spillover jobs that would be created for every one direct job tied to new drilling in New York.
A more accurate job forecast might be a tenth of what the public policy institute projected — or a total of 6,656 New York jobs by 2018, according to Food and Water Watch.
That roughly matches an estimate by the New York Department of Environmental Conservation, which concluded in a draft report released in September that natural gas extraction in the state could directly employ 6,198 to 24,795 workers.
The conservationists say the New York and Pennsylvania reports are part of an oil industry trend of inflating potential jobs from oil and gas production, often to counter concerns about the environmental consequences of that work:
“The oil and gas industry, industry-funded academics and ideological think tanks have promoted unfettered expansion of shale gas development as a sure-fire job creator in difficult economic times. However, toxic above-ground spills of fracking fluid and wastewater, water well contamination from methane and fracking fluid migration underground, local and regional air pollution, explosions and the likelihood of accelerated climate change highlight the environmental and public health risks of the practice.”
Hugh MacMillan, a senior research with Food and Water Watch, said the flawed analyses — both by New York’s public policy institute and an underlying Pennsylvania State University study — are a problem, because they are widely cited by policymakers and federal officials. For instance, an Energy Department shale gas advisory board has relied on the Pennsylvania State University report in touting the potential economic benefits of gas production.
A nationwide natural gas boom is being fueled by a surge in hydraulic fracturing, a technique that involves blasting mixtures of sand, water and chemicals deep underground to break up shale rock and unlock trapped oil and natural gas.
Environmentalists have raised concerns that methane could escape poorly designed and secured wells, contaminating local groundwater supplies. Another problem, they say, is the way the industry manages the high water demands of hydraulic fracturing and how it disposes the fluids it uses on site. In Pennsylvania, wastewater is sometimes trucked to local treatment facilities that are incapable of cleaning out naturally occurring but toxic materials that leach from the ground into those fluids.
Industry officials point to oil and gas companies’ commitments to disclose more information about the contents of the fracturing fluids they use as well as voluntary performance standards for the design and cementing of wells.
Industry representatives also point to the tens of thousands of wells being drilled annually as evidence that there are no systemic environmental problems tied to hydraulic fracturing.
Food and Water Watch’s report comes as officials throughout the Northeast are weighing whether to allow more natural gas drilling and hydraulic fracturing in the region. For instance, on Nov. 21, the five-member Delaware River Basin Commission is set to vote on new rules that would govern natural gas extraction from the Marcellus Shale.
Environmentalists cast the vote as pivotal because the commission’s decision could open areas throughout the watershed to hundreds of natural gas wells.
Separately, regulators in New York state are weighing the economic and environmental effects of natural gas drilling. A public comment period on an environmental impact statement runs through Dec. 12. High-volume hydraulic fracturing permits are on hold until federal regulators prepare a final version of that environmental analysis and issues their findings.
The New York State Department of Environmental Conservation opened a more than 90-day public comment period on its revised draft Supplemental Generic Environmental Impact Statement, DEC Commissioner Joe Martens announced today.