Marcellus Shale Development Creates Thousands of Skilled Craft Jobs

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The boom in the Marcellus Shale has led to billions of dollars of capital investment and millions of hours of work for craft laborers that would not have taken place absent oil and gas development, according to labor researchers at the University of Illinois.

Their report, "Study of Construction Employment in Marcellus Shale-Related Oil and Gas Industry, 2008-2014," was prepared by Robert Bruno and Michael Cornfield, using data from Industrial Info, among other sources. It says that between 2008 and the first half of 2014, "natural gas exploration has been a strong engine of job growth" in five states: Maryland, Virginia, Pennsylvania, Ohio and West Virginia.

Over that six-and-a-half-year timeframe, workers logged more than 72 million hours of direct and indirect construction labor in oil and gas projects in that five-state region. These hours translate into between 36,321 and 45,402 actual construction jobs, depending on how many hours a worker puts in each week. None of these jobs would have been created if development of that shale formation did not take place. The study covered 13 skilled builder trade jobs, including:

• Boilermakers
• Operating engineers
• Electricians
• Pipefitters
• Ironworkers
• Plumbers
• Laborers
• Insulators
• Painters
• Plasterers and masons
• Sheet metal workers
• Carpenters
• Teamsters

If anything, Bruno and Cornfield said their study underestimates the total labor impact of oil and gas development in the Marcellus, as it did not include jobs related to state road construction for natural gas development, or hours worked as part of local union agreements.

In terms of job creation, the trades benefitting the most from Marcellus Shale development since 2008 have been operators, laborers, pipefitters, electricians and iron workers.

In 2013, construction and maintenance spending in the Marcellus reached $5 billion, a 61% increase more than 2012, the authors said, citing Industrial Info's data. Those investments created more than 4,600 construction jobs in eight different trades. The torrid pace of spending continued through the first half of 2014, with $6.5 billion of spending commitments made through the first six months of the year.

Construction workers reaped about $247 million in paychecks from the oil and gas build-out in the Marcellus in 2013, the study estimated.

The surge of work in oil and gas projects came as work in the region was drying up for projects unrelated to shale development, the study noted. Construction activity in the five states under review fell about 54% between 2008 and the first half of 2014: In 2008, the five-state region logged 14.8 million labor hours of construction activity that was outside the Oil and Gas Industry. But by June 30, 2014, that fell to 6.6 million labor hours.

"The expansion of natural gas development first beginning in 2006 and accelerating during the recessionary 2008-2013 period, has repositioned construction employment in the (region's) Oil and Gas Industry," Bruno and Cornfield wrote. "While employment in non-shale-related oil and gas industries sharply declined from 2008 forward, employment activity on natural gas projects in the Marcellus Shale Play rose significantly."

The study includes direct and indirect jobs associated with oil and gas development. An example of "direct" jobs are people working in oil and gas production, pipelines, storage terminals and processing plants. "Indirect" jobs refer to people working at plants that rely of natural gas as a feedstock, such as steel mills, pulp and paper mills, chemical processing plants and natural gas-fired power plants.

"This report shows how the shale revolution has benefitted workers, companies and entire industries across a five-state region," said Tony Salemme, Industrial Info's vice president for craft labor. "It is truly heartening to see how many jobs have been created by the shale revolution, particularly given that some states, such as West Virginia, are going through a wrenching downsizing due to environmental regulations."

For more information on Industrial Info's Labor Study and Analysis email Don Cotchen at dcotchen@industrialinfo.com or call 1-202-429-2720.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.