Surging Energy = Surging Investment and Jobs
Posted October 15, 2014
Natural gas production in the Marcellus Shale continues to surge – and with it, industry spending on construction and maintenance, according to a new study.
The latest drilling productivity report from the U.S. Energy Information Administration (EIA) projects Marcellus natural gas output will hit 15,828 million cubic feet per day (mcf/d) or about 37.1 percent of production from the major U.S. shale plays. EIA expects Marcellus output will top 16,000 mcf/d in November. EIA’s chart of Marcellus production back to 2007:
The production gains are reflected in industry spending on workers in construction and maintenance from 2008 to 2014 – the subject of the new study by the Oil and Natural Gas Industry Labor-Management Committee. The study showed spending grew more than 60 percent between 2012 and 2013, reaching $5 billion, resulting in a 40 percent increase in jobs in eight trades (union and non-union members included). Another $6.5 billion already is committed for 2014, the study reports. Key data points:
- Over the past six years about 35.8 million labor hours came from major plant capital and maintenance work in oil and natural gas-related industries. An all-time high of 9 million labor hours were recorded in 2013, a 40 percent increase over 2012.
- More than 45,000 cumulative construction jobs in all trades based on 1,600 hours worked on direct and indirect oil and natural gas projects, 2008-2014.
- Build-out of the oil and natural gas industry in 2013 created an additional 5,500 craft worker jobs, representing an estimated $247 million paid out to workers because of ongoing construction.
- More than 72 million cumulative direct and indirect labor hours worked by all trades in connection with Marcellus oil and natural gas operations.
The study concludes that “natural gas exploration has been a strong engine of job growth” and that without energy activity a number of construction jobs might have been lost:
The transformation of employment in the oil and gas industry has had an additional virtuous effect. An examination of national and relevant state unemployment data for the construction industry indicates that “but for” natural gas projects the region would have experienced substantially higher incidences of construction industry job displacement.
API Executive Vice President Louis Finkel said the study shows that safe, responsible energy development is a significant economic driver and that policy choices are needed to sustain and grow the country’s energy revolution:
“The U.S. energy boom is lifting up the middle class and lowering costs for American families. Workers in our industry are earning about seven times the federal minimum wage. These are good paying jobs and we need more of them. We must seize this great American made opportunity by enacting smart energy policies. Energy is not a partisan issue; Washington needs to reject duplicative regulations, open the door to US energy exports, and eliminate counterproductive fuel mandates.”
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.
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