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Report: Shale will bring growth

December 12, 2011
Morning Journal News

WARREN - Natural gas drilling in area Marcellus and Utica shale rock formations will fuel dramatic growth for local economies and the entire nation in coming decades, a report released last week says.

It also is energizing regulators and environmental groups who are sharply critical of the controversial hydraulic fracturing process used to crack shale rock and release gas.

Workers will benefit by the creation of nearly 270,000 jobs in the coming four years, according to a study done by IHS Global Insight and released last week by America's Natural Gas Alliance.

The report projects the number of jobs supported by shale gas to rise to almost 870,000 from 600,000 now. IHS said the number of jobs linked to shale gas development will surpass 1.6 million by 2035.

Jobs will be relatively well-paying at an average of $23.16 per hour, the study showed. Many of the 350 permanent positions projected at V&M Star's new pipe mill, plus another 100 at the recently announced pipe finishing mill, are expected to pay $50,000 to $80,000 a year.

Government, schools and other public bodies will benefit from more than $940 billion in federal, state and local taxes, along with royalty revenues, in the coming 25 years.

Sales tax receipts in Columbiana County, which already is seeing considerable shale drilling, have climbed 5.6 percent for the year through September to $10 million at its 1.5 percent rate.

Carroll County, another drilling hotbed, has reaped 7.4 percent more in sales tax to $1.46 million at 1 percent.

Both counties are well ahead of the statewide gain of 4.6 percent.

In addition, the percentage gain in new car and truck sales at Columbiana County's nine dealers that belong to the Automobile Dealers Association of Eastern Ohio is far outpacing other member dealers this year through November.

Those dealers have sold 3,785 new vehicles, 42.5 percent more than in the same period of 2010. By comparison, Trumbull County has seen a 27 percent gain, and Mahoning County 22.6 percent.

"It's great for people to have some money to spend. We've been down for quite a few years," Columbiana County Commissioner Jim Hoppel said.

Consumers stand to see an average increase of $926 a year per household in disposable income between 2012 and 2015 due to lower gas prices. Savings will increase to $2,000-plus by 2035.

Major natural gas using industries, such as steel companies, will benefit from lower gas prices, the study said. It predicted low gas prices will boost industrial production by 2.9 percent by 2017, and by 4.7 percent by 2035, stimulating job creation and output.

Regina Hopper, president and chief executive officer of America's Natural Gas Alliance, said the study shows shale exploration can help address the nation's job worries, while being conscious of environment concerns.

"Whether it is through job creation, economic stimulus, or government revenue, shale gas has provided and will continue to provide numerous benefits for Americans," she said in a statement. "And our commitment to safe and responsible development means communities don't have to choose between their economic well being and the protection of the environment, they can have both."

Environment watchdogs like the the Sierra Club of Ohio are waiting for proof of that.

"What worries people the most are actual and potential pollution effects of water and air," Cleveland resident Dave Simons, who chairs the club's energy committee.

Risks of groundwater contamination gets much of the pollution publicity, but Simons said air pollution is a concern where large scale hydraulic fracturing is done.

"There's a lot of leakage of methane," he said.

Simons noted the oil and gas industry in 2005 received exemptions from Clean Water, Clean Air, Superfund and other major national environmental laws.

"Regulation is in the hands of the states," he said.

Besides pollution and land-use concerns, Simons said financial rewards may not be so great for neighbors of people who lease their land for thousands, even hundreds of thousands, of dollars.

"Your neighbor may make a great deal of money, but it may affect your ability to sell your land for what it's worth. It may also be hard to get a mortgage because banks are worried about the loss of property value," he said.



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