Economists at The Ohio State University conclude that while widespread fracking of the Utica Shale gas deposits in Ohio will create jobs in Ohio, the actual number is more likely one-tenth of the numbers cited by the gas industry and its proponents like Governor Kasich:
"Previous studies on the economic impacts of natural gas appear to have widely overstated the economic impacts," the new OSU report notes.
"This is not surprising, as these studies are typically industry-funded, and industry-funded studies are usually not the best sources of information for economic effects," regardless of the industry, according to the 38-page analysis written by a team led by economist Mark Partridge, the Swank Chair of Rural-Urban Policy at OSU.
[Source: Cleveland Plain Dealer (Dec. 16, 2011)]
Yes, I know, it’s stunning that a study commissioned by the Ohio Oil and Gas Energy Education Program, funded by the oil/gas industry, might overstate the economic benefits of drill, baby, drill.
Specifically, the economists criticize the methodology used by the gas industry:
"Impact studies are not viewed as best practice by academic economists and would be rarely used . . . by urban and regional economists," Partridge wrote.
Those exercises don’t consider what jobs will be lost because of the new industry nor how a regional economy might have developed without the new industry. And job projection estimates often do not differentiate between short-term and permanent jobs, the study notes.
Hey, how many times has Governor Kasich mentioned some of the jobs created by fracking are only short-term gains? (Zero.)
Given the anticipated size of the boom, Ohio is expected to follow Pennsylvania’s experience. We believe 20,000 jobs would be a more realistic starting point for what to expect in Ohio over the next four years and is in line with what other independent assessments have suggested."
"However, our 20,000 job estimate does not account for displacement losses in other industries such as tourism, and we also note that local economic effects could appear larger in heavily impacted areas."
The study also notes that gas drilling is "capital intensive" rather than job intensive in the long run, meaning after the wells are drilled and pipelines laid, there are not as many jobs as the industry and governments had hoped.
Yeah, the economists pointed out that it’s hard to believe that Ohio would see 200,000 jobs when Pennsylvania, a State similar to Ohio, hasn’t come close to those numbers. Kind of embarrassing that nobody pointed that out until now.
Fracking has been Kasich’s only plan for economic development for much of Appalachia in southeastern Ohio. It’s all he’ll talk about for the region.
I know it’s incredible to think that the enormous amount of money the oil and gas industry has spent on lobbyists and television ads tells us the benefits of fracking for years here in Ohio turns out to totally bunk.