Tuesday, July 26, 2011

Texas-Sized Job Growth In PA

There is a lot of fuss about the Marcellus Shale gas job numbers. Once again, Chris Briem (Null Space) offers a grounded analysis. The time series data are one way to provide context for all the hype. I prefer a geographic comparison. The Texas energy industry rebound:

Employment in Texas’ oil and gas industry rebounded to its pre-recession highs while oil production solidified its return to the top of the fossil fuel ladder for the first time in more than a decade, according to an index of state energy activity.

The Lone Star State employed 224,200 workers in exploration and production in June, according to the Texas Petro Index — more than the 223,200 at the height of the last energy boom in October 2008 and nearly 15 percent more than in June 2010, said Karr Ingham, the Midland economist who created and maintains the index. ...

... The oil and gas industry only accounts for about 2 percent of the state’s entire workforce payroll, Ingham says, but it tends to have an oversized impact on the entire state economy because it is so capital-intensive. By some estimates, as much as two-thirds of Texas’ job creation in the past year could be tied directly and indirectly to the oil and gas exploration business.

I will highlight two pieces of information that help to illuminate the Pennsylvania shale gas jobs picture. A bit further on in the article, the journalist explains the reason for the last energy boom that peaked in 2008: Shale gas. Texas provides an excellent template to temper job expectations in Pennsylvania.

On that last point and the second piece of information, notice the small share that the oil and gas industry has in the overall Texas workforce. It is just 2%. But the impact on the economy is "large". Then why is the Marcellus Shale Coalition (MSC) focusing on job numbers?

From the start of the drilling boom, the natural gas industry has done a lousy job of public relations. That's been a problem long before the Marcellus play arrived on the scene. But the gaffes haven't mattered because the Shale Coalition has been able to curry favor with the right politicians.

I'm no energy industry expert. But picking apart the pro-industry propaganda couldn't be easier. From what I can ascertain using some basic geographic analysis, there is a strong case to be made. I'm perplexed as to why the MSC isn't pushing that agenda. The long sordid tale strikes me as gross incompetence.

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