In Appalachia, fracking is not the job creator the industry claims
This story was originally published by Canary Media.
As the Trump administration aims to bolster fossil fuels at the expense of clean energy expansion, new research shows the oil and gas sector has so far failed to become a major jobs creator for heavily fracked areas of northern Appalachia.
“To the degree that we allocate resources to help develop that industry, we’re diverting those resources from other industries that actually could deliver” more jobs and higher per-capita incomes, said Sean O’Leary, author of the recent report from the Ohio River Valley Institute.
The report uses the term “Frackalachia” to describe 30 top oil- and gas-producing counties in Ohio, Pennsylvania, and West Virginia. As a group, the counties have smaller populations and a net loss in the number of jobs compared to 2008, just before Appalachia’s shale-gas boom began.
The counties’ growth in per-capita income also has lagged behind the national average, even as their nominal gross domestic product nearly doubled, increasing their share of the country’s GDP by 6%. Basically, comparatively high economic output from the counties did not produce higher-than-average incomes for their residents.
“Despite immense economic growth as measured by GDP, Frackalachia is in a position of actually having lost jobs since the beginning of the natural-gas boom,” O’Leary said. In his view, the numbers contradict pro-industry pitches for more oil and gas development.
“Whatever else it is, the natural-gas boom is not an engine for economic prosperity,” O’Leary said. He thinks the gas industry is “structurally incapable” of delivering lasting growth in jobs and income for the people living in heavily fracked areas. The Frackalachia counties have also seen relatively few jobs from “downstream” industries, such as the production of plastics, he added.
Oil and gas development is “highly capital-intensive, but not very labor-intensive,” O’Leary explained. Most earnings go to shareholders, investors, and suppliers based far from where fossil fuels are extracted, so only a small share of project income stays in the community to stimulate more economic activity.
Completed wells don’t need many permanent employees, O’Leary said. And many people who work in drilling and fracking come from outside the local area.
Canary Media’s review of data from the Ohio Department of Job and Family Services is consistent with that observation. From 2012 through 2022, the agency issued annual reports about the economic impact of the state’s oil and gas industry, including data for both “core” jobs and “ancillary” industries, which support oil and gas development.
More than half of the new hires for the core industry jobs in 2021 came from outside Ohio, according to the state data. Even in ancillary industries, nearly four-tenths of new hires were from other states.
Meanwhile, the state holds clean energy companies to higher standards when it comes to sourcing local labor. Solar developers who want to qualify for certain property tax relief must provide at least 70% of a project’s jobs to Ohio residents.
Not so great expectations?
Canary Media drilled further into the figures from the Ohio Department of Job and Family Services to see how employment numbers compare to those touted by fossil-fuel industry organizations.
As of 2024, the core shale-industry sectors employed almost 9,100 people. The net gain compared to 2012 was about 860 jobs. Employment in those sectors peaked in 2017 at about 16,400.
Roughly 199,000 people worked in the industry’s ancillary sectors in 2024, for a net gain of about 30,000 jobs compared to 2012. However, the Department of Job and Family Services’ reports note that those ancillary sectors support other industries as well, such as engineering services, iron and steel mills, and construction of highways, streets, and bridges.
The Ohio agency numbers fall short of the 204,000 new jobs that an industry-funded report forecast oil and gas businesses might create or support. That analysis was published in 2011, in the lead-up to the 2012 law that set up the state’s current regulatory scheme for drilling and fracking of horizontal wells.
The agency numbers are also far lower than the 79,000 direct and 375,00 total jobs the American Petroleum Institute cited in a 2021 report based on data from 2019.
A communications representative for the American Petroleum Institute declined to answer Canary Media’s questions about that report or the new research from the Ohio River Valley Institute.
A spokesperson for the Ohio Oil and Gas Association did not respond to a phone call and emails seeking comment for this story.
The cyclical boom-and-bust dynamics that often characterize oil and gas development also impact jobs, said Gilbert Michaud, an assistant professor of environmental policy at Loyola University Chicago. In contrast, utility-scale solar could be built out over time, to offer “opportunities for a more stable and consistent workforce,” he said.
An analysis prepared by Michaud and others in 2020 estimated that utility-scale solar development could provide tens of thousands of jobs over the course of a few decades if the state encouraged it. That study came out before Ohio lawmakers added extra hurdles for most utility-scale solar and wind projects in 2021.
Now federal policy has also shifted away from renewables and in favor of fossil fuels.
“While this might spur some jobs in oil and gas, it will also take jobs away from renewables, which can be built nearly anywhere, not just in places like eastern Ohio that have shale resources,” Michaud said. “It will threaten a big renewable energy pipeline that has developed over the past decade or two.”
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