With all the talk of fracking in Pennsylvania during this presidential race, it’s worth looking at what is at stake for workers, leaseholders and residents who live near oil and gas operations.
One quick but important reality check — a president cannot ban fracking in Pennsylvania. Only an act of Congress can prohibit fracking on a national level on private and state land, which is where fracking occurs in Pennsylvania.
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As a comparison, direct construction jobs account for about 260,000 jobs in the state, while manufacturing currently provides 566,800 jobs
So why are we hearing in political ads and from some national journalists that fracking in Pennsylvania accounts for about 120,000 jobs?
The number stems from a 2023 report by the industry that takes a very different approach to counting employment and reported 123,000 jobs were related to fracking in Pennsylvania — a year when the federal Bureau of Labor Statistics listed direct oil and gas jobs in the state at about 12,000.
The Marcellus Shale Coalition surveyed companies in 2022. Its report states that the 123,000 figure includes direct jobs, as well as those “generated through the supply chain and employee spending across different sectors of the economy.”
But the methods used in the industry job study are very different from those used by academics and financial analysts, and as a result, cast a very wide net. The report’s job numbers are about 10 times the number of direct fracking jobs reported in the state for 2022.
“Typically anything over [twice] the number of direct jobs is looked at as unreasonable by economists who do this type of economic impact analysis,” said Tim Kelsey, a professor of agricultural economics at Penn State who also co-authored the 2016 job study.
Indirect jobs could include a warehouse job related to oil and gas drilling, for example, or a factory job that makes parts for a drilling rig.
“There are of course going to be some indirect jobs, but to go from [16,800 direct] jobs to 123,000 total, that’s a stretch,” said Kenneth Gillingham, professor of economics at the Yale School of the Environment.
“Induced” jobs refer to spending by gas workers creating a lunch rush at a local pizza shop, for example, and potentially leading the owner to hire extra workers. It could also count increased spending by local residents who get royalties from a gas lease.
Gillingham said most of the country is experiencing full employment right now, meaning jobs are “just moving from one place to the other.” There may be areas of rural Pennsylvania that are economically depressed, he said, but the bulk of the “indirect” or “induced” jobs will likely be low-paying.
Jeremy Weber, a professor at the University of Pittsburgh specializing in energy and environmental policy, agreed that the multiplier typically used to calculate “indirect” jobs is rarely more than two or three.
He said the numbers of jobs in the Marcellus Shale Coalition report are often misinterpreted. “These numbers are not how many more jobs we have today in Pennsylvania because of shale gas development,” said Weber.
He used the example of how the 2023 industry report counts the increased use of natural gas as a source of electricity generation in the state.
“And they attribute all of that natural gas employment associated with power generation to the shale gas industry,” Weber said. “Well, in Pennsylvania, we’re producing roughly the same amount of electricity today as we did before there was any shale gas development. So the total number of people employed in the electric power sector probably hasn’t changed hardly at all. We’ve just shifted the chairs, so to speak, and are now drawing more [electricity from] natural gas.”
The industry calculation also includes jobs associated with natural gas distribution, which Weber said “makes no sense.”
“In Pennsylvania, we’re consuming in our homes and businesses about the same amount of natural gas today as we did 15 years ago before shale took off. And yet, their methodology and study includes all of the jobs associated with providing natural gas to homes and businesses as attributable to shale development.”
Weber said it’s unclear what assumptions were made regarding spending by leaseholders.
“We know that from surveys of lenders, [the leaseholders] don’t spend all of it right away,” he said. “They save a lot of it, and they spend it differently than other sources of income. So how are the modelers treating that?”
Fracking proponents also point to the decrease in utility bills due to the shale gas boom. Weber said there’s no dispute about that.
“The explosion of natural gas production from the Appalachian Basin and from other parts of the country resulted in a game-changing downward shift in price,” Weber said.
Although it may be lower in Pennsylvania, the average national price of natural gas now hovers around $2.33 cents per MMBtu. In any given year, it can fluctuate around that figure, but in 2022, it averaged $6.45, largely due to the war in Ukraine.
The number of newly fracked gas wells drilled in the state has decreased, which could be a factor in the decrease in the number of jobs.
An analysis from the state’s Independent Fiscal Office says Pennsylvania companies drilled 63 new wells between April and June — the lowest quarterly number since 2008. Natural gas production also dropped by 4.8%, the lowest quarterly production volume since 2020 during the early days of the pandemic. But over the past 20 years, the laterals, meaning the horizontal parts of the wells that travel far from the wellhead, have increased in length, allowing each individual fracked gas well to be more productive.
Twenty years after the state’s first shale gas well was drilled, Pennsylvania remains the second largest natural gas producer, behind Texas.
The drop in the number of natural gas wells drilled meant that 2023 was the lowest year yet for impact fees paid to state coffers. That is because the impact fee is not based on production volumes, but is a fee per well that also takes into account the price of natural gas.
Environmental impact of fracking
Almost immediately after the shale gas boom began in about 2008, reports of fracking in Pennsylvania had residents witnessing dramatic well blowouts and reporting damaged well water, unexplained health issues and, in one famous case, the explosion of a drinking water well that had a build up of methane.
The lack of regulation of shale gas production led to the adoption of Act 13 in 2012, which also established an impact fee. The law was updated in 2016.
- A new report compiles years of data about the health risks associated with fracking
- Pitt researchers find higher risks for lymphoma and asthma for those near fracking
- Study finds radioactive materials in waterways near treatment plants associated with fracking waste
Former Department of Environmental Protection Secretary Dave Hess, who writes the Pennsylvania Environmental Daily newsletter, pours over the well inspection reports issued by the DEP.
“What I see is the issue of polluted water supplies, of people being impacted by the air pollution around these facilities, people looking out their bedroom windows and 500 feet [away] is a flare shooting 25 feet up in the air, burning off excess natural gas,” said Hess. “All those issues are still there.”
Hess raised alarms in a recent post that listed, in the course of one week in September, 62 notices of violations of conventional wells and seven for fracked wells, bringing the total year-to-date violations to 721 for fracked shale gas wells, and a whopping 5,857 violations for the more shallow conventional wells. The state has had conventional wells, which don’t use fracking to tap the reserves, for more than 100 years. While there are a lot more conventional wells, they do not produce nearly as much oil and gas as the deeper fracked wells.
From Pennsylvania Department of Environmental Protection’s 2022 Oil and Gas Annual Report
The chart above illustrates DEP violations between 2015 and 2022 for both conventional and unconventional wells. While violations for fracked wells have grown, those for the conventional wells have increased more dramatically.
One of the more dramatic incidents this year was the leak of more than 12,600 gallons of fracking wastewater from a pipe in Greene County. It’s unclear if the spill impacted any nearby private water wells. Private water wells are not regulated in Pennsylvania.
Still, DEP spokesman Neil Shader said the agency does contact nearby residents whose private water wells may be impacted if the agency knows they are there. The state does hold drillers responsible for damaged drinking water supplies if the well lies within 2,500 feet of a fracked gas well or 1,000 feet from a conventional oil and gas well.
Reports of water catching fire continue, and in one case, a shed door exploded in September 2023 in McKean County. Several months later, it happened again and was described to a DEP inspector by the resident, Helen Dragonette, as a “dragon fire” coming from the shed that housed the water well. Poorly constructed gas wells cause the methane to “migrate” into the aquifer, and if a water supply contains a certain level of methane it can be combustible.
The DEP has issued 452 enforcement actions so far this year and 91 for shale gas wells.
“We’ve got to do more to protect the water supplies around these facilities,” Hess said. “I don’t think we can continue to pretend that … our regulations are adequate.”
In Cecil Township, Washington County, conditions have deteriorated to the point where the commissioners will vote in November on an ordinance that will expand the residential setbacks of oil and gas wells to 2,500 feet, and 5,000 feet for schools and hospitals, a similar recommendation by a grand jury report on fracking in 2020. State regulations continue to mandate 500-feet setbacks.
“I think this is an opportunity to rethink how we regulate this industry … because we’ve learned a lot over the last 20 years, the last 15 years, the last 10 years,” Hess said.
“I think this whole discussion about whether fracking should be banned or not is really a diversion by the industry and others from what they should be talking about, which is how can we do this safely so it doesn’t have a negative impact on health and the environment,” said David Hess, former Department of Environmental Protection secretary who served under former Gov. Tom Ridge from 2001 to 2003.
How many fracking jobs are there in Pennsylvania?
Job creation is touted as the most significant benefit of the fracking boom, especially in the more rural parts of the state where good-paying jobs can be scarce.
One of the first job creation reports painted a rosy picture. Published in 2010 by Penn State University and paid for by the industry, it predicted fracking the Marcellus Shale formation would support 200,000 jobs by 2020. Six years later, another Penn State study with different authors reported about 26,000 direct jobs in the industry, half of which were filled by out-of-state residents.
Today, that number is even smaller. In March of 2024, the state reported 16,831 direct jobs in the industry, less than one-half of 1% of all jobs.
As a comparison, direct construction jobs account for about 260,000 jobs in the state, while manufacturing currently provides 566,800 jobs
So why are we hearing in political ads and from some national journalists that fracking in Pennsylvania accounts for about 120,000 jobs?
The number stems from a 2023 report by the industry that takes a very different approach to counting employment and reported 123,000 jobs were related to fracking in Pennsylvania — a year when the federal Bureau of Labor Statistics listed direct oil and gas jobs in the state at about 12,000.
The Marcellus Shale Coalition surveyed companies in 2022. Its report states that the 123,000 figure includes direct jobs, as well as those “generated through the supply chain and employee spending across different sectors of the economy.”
But the methods used in the industry job study are very different from those used by academics and financial analysts, and as a result, cast a very wide net. The report’s job numbers are about 10 times the number of direct fracking jobs reported in the state for 2022.
“Typically anything over [twice] the number of direct jobs is looked at as unreasonable by economists who do this type of economic impact analysis,” said Tim Kelsey, a professor of agricultural economics at Penn State who also co-authored the 2016 job study.
Indirect jobs could include a warehouse job related to oil and gas drilling, for example, or a factory job that makes parts for a drilling rig.
“There are of course going to be some indirect jobs, but to go from [16,800 direct] jobs to 123,000 total, that’s a stretch,” said Kenneth Gillingham, professor of economics at the Yale School of the Environment.
“Induced” jobs refer to spending by gas workers creating a lunch rush at a local pizza shop, for example, and potentially leading the owner to hire extra workers. It could also count increased spending by local residents who get royalties from a gas lease.
Gillingham said most of the country is experiencing full employment right now, meaning jobs are “just moving from one place to the other.” There may be areas of rural Pennsylvania that are economically depressed, he said, but the bulk of the “indirect” or “induced” jobs will likely be low-paying.
Jeremy Weber, a professor at the University of Pittsburgh specializing in energy and environmental policy, agreed that the multiplier typically used to calculate “indirect” jobs is rarely more than two or three.
He said the numbers of jobs in the Marcellus Shale Coalition report are often misinterpreted. “These numbers are not how many more jobs we have today in Pennsylvania because of shale gas development,” said Weber.
He used the example of how the 2023 industry report counts the increased use of natural gas as a source of electricity generation in the state.
“And they attribute all of that natural gas employment associated with power generation to the shale gas industry,” Weber said. “Well, in Pennsylvania, we’re producing roughly the same amount of electricity today as we did before there was any shale gas development. So the total number of people employed in the electric power sector probably hasn’t changed hardly at all. We’ve just shifted the chairs, so to speak, and are now drawing more [electricity from] natural gas.”
The industry calculation also includes jobs associated with natural gas distribution, which Weber said “makes no sense.”
“In Pennsylvania, we’re consuming in our homes and businesses about the same amount of natural gas today as we did 15 years ago before shale took off. And yet, their methodology and study includes all of the jobs associated with providing natural gas to homes and businesses as attributable to shale development.”
Weber said it’s unclear what assumptions were made regarding spending by leaseholders.
“We know that from surveys of lenders, [the leaseholders] don’t spend all of it right away,” he said. “They save a lot of it, and they spend it differently than other sources of income. So how are the modelers treating that?”
Fracking proponents also point to the decrease in utility bills due to the shale gas boom. Weber said there’s no dispute about that.
“The explosion of natural gas production from the Appalachian Basin and from other parts of the country resulted in a game-changing downward shift in price,” Weber said.
Although it may be lower in Pennsylvania, the average national price of natural gas now hovers around $2.33 cents per MMBtu. In any given year, it can fluctuate around that figure, but in 2022, it averaged $6.45, largely due to the war in Ukraine.
The number of newly fracked gas wells drilled in the state has decreased, which could be a factor in the decrease in the number of jobs.
An analysis from the state’s Independent Fiscal Office says Pennsylvania companies drilled 63 new wells between April and June — the lowest quarterly number since 2008. Natural gas production also dropped by 4.8%, the lowest quarterly production volume since 2020 during the early days of the pandemic. But over the past 20 years, the laterals, meaning the horizontal parts of the wells that travel far from the wellhead, have increased in length, allowing each individual fracked gas well to be more productive.
Twenty years after the state’s first shale gas well was drilled, Pennsylvania remains the second largest natural gas producer, behind Texas.
The drop in the number of natural gas wells drilled meant that 2023 was the lowest year yet for impact fees paid to state coffers. That is because the impact fee is not based on production volumes, but is a fee per well that also takes into account the price of natural gas.
Environmental impact of fracking
Almost immediately after the shale gas boom began in about 2008, reports of fracking in Pennsylvania had residents witnessing dramatic well blowouts and reporting damaged well water, unexplained health issues and, in one famous case, the explosion of a drinking water well that had a build up of methane.
The lack of regulation of shale gas production led to the adoption of Act 13 in 2012, which also established an impact fee. The law was updated in 2016.
- A new report compiles years of data about the health risks associated with fracking
- Pitt researchers find higher risks for lymphoma and asthma for those near fracking
- Study finds radioactive materials in waterways near treatment plants associated with fracking waste
Former Department of Environmental Protection Secretary Dave Hess, who writes the Pennsylvania Environmental Daily newsletter, pours over the well inspection reports issued by the DEP.
“What I see is the issue of polluted water supplies, of people being impacted by the air pollution around these facilities, people looking out their bedroom windows and 500 feet [away] is a flare shooting 25 feet up in the air, burning off excess natural gas,” said Hess. “All those issues are still there.”
Hess raised alarms in a recent post that listed, in the course of one week in September, 62 notices of violations of conventional wells and seven for fracked wells, bringing the total year-to-date violations to 721 for fracked shale gas wells, and a whopping 5,857 violations for the more shallow conventional wells. The state has had conventional wells, which don’t use fracking to tap the reserves, for more than 100 years. While there are a lot more conventional wells, they do not produce nearly as much oil and gas as the deeper fracked wells.
From Pennsylvania Department of Environmental Protection’s 2022 Oil and Gas Annual Report
The chart above illustrates DEP violations between 2015 and 2022 for both conventional and unconventional wells. While violations for fracked wells have grown, those for the conventional wells have increased more dramatically.
One of the more dramatic incidents this year was the leak of more than 12,600 gallons of fracking wastewater from a pipe in Greene County. It’s unclear if the spill impacted any nearby private water wells. Private water wells are not regulated in Pennsylvania.
Still, DEP spokesman Neil Shader said the agency does contact nearby residents whose private water wells may be impacted if the agency knows they are there. The state does hold drillers responsible for damaged drinking water supplies if the well lies within 2,500 feet of a fracked gas well or 1,000 feet from a conventional oil and gas well.
Reports of water catching fire continue, and in one case, a shed door exploded in September 2023 in McKean County. Several months later, it happened again and was described to a DEP inspector by the resident, Helen Dragonette, as a “dragon fire” coming from the shed that housed the water well. Poorly constructed gas wells cause the methane to “migrate” into the aquifer, and if a water supply contains a certain level of methane it can be combustible.
The DEP has issued 452 enforcement actions so far this year and 91 for shale gas wells.
“We’ve got to do more to protect the water supplies around these facilities,” Hess said. “I don’t think we can continue to pretend that … our regulations are adequate.”
In Cecil Township, Washington County, conditions have deteriorated to the point where the commissioners will vote in November on an ordinance that will expand the residential setbacks of oil and gas wells to 2,500 feet, and 5,000 feet for schools and hospitals, a similar recommendation by a grand jury report on fracking in 2020. State regulations continue to mandate 500-feet setbacks.
“I think this is an opportunity to rethink how we regulate this industry … because we’ve learned a lot over the last 20 years, the last 15 years, the last 10 years,” Hess said.
