The Shale Game Part 3: Jobs
Tuesday, September 28th, 2010
Pennsylvania's natural gas rush has environmentalists and residents worried about contaminated drinking water wells, increased truck traffic, exploding well heads and potentially toxic spills. But the counterpoint all along has been jobs, jobs, jobs.
A study funded by the natural gas industry says drilling the Marcellus Shale could bring 100,000 jobs to Pennsylvania.
As part of our series, The Shale Game, WHYY's Susan Phillips takes a look at how gas drilling is changing the economic landscape upstate.
This part of Pennsylvania was primarily farmland and it's still dotted with dairy farms. It also survives on timbering and blue stone quarries. Manufacturing plants have packed up and moved overseas.Sitting on Andy Henry's porch in Elk Lake, Susquehanna County, surrounded by his wind chime collection, it's hard to argue against the economic change natural gas is bringing to this part of the state.
Henry: It's definitely been a lot of jobs, that's for sure. But I think we're learning along with everyone else it's all pretty new to us.
Henry lives just about five miles from the town of Dimock, where some residents are able to set their tap water on fire because poorly constructed natural gas wells leaked methane into their water supply.
Henry: And I know there's a lot of fear, Dimock has made the national news with the water, there's a lot of problems there. but from what I'm learning, we're all learning together what's actually under us.
About a mile underneath Henry's home lies what some consider the second largest natural gas deposit in the world. Henry decided to lease his small piece of land for $2,500 an acre plus 16 percent royalties. A well head on his neighbor's property drills down about 8000 feet and then branches off horizontally — think of it as an underground fountain that uses high-pressured water, sand and chemicals to loosen up the gas.
Henry's water well sits just 600 feet from the drilling site. He has mixed feelings about how this could affect his tap water.
Not to mention the trucks that rumble down the road past Henry's house all day long.
Henry: You don't play in the road…laughter…and today is a quiet day I'll tell ya…that's a 17 acre field and there's about 15 acres tore up there…and they hauled for days…and the water trucks and the sand trucks, it's like non-stop trucks all day.
Millikan: In truth, although water made the big headlines, and it's what people are most fearful about the greatest environmental impact to rural Pennsylvania has been trucks.That's Larry Millikan — who took me on a tour of this part of the Marcellus Shale that sits under Henry's porch, and all of Susquehanna County. Millikan runs the newly created natural gas technology degree program at Lackawanna College. The first class of 19 students will graduate with an associate's degree next spring with hopes of getting good paying jobs.
Millikan: We're seeing an awful lot of jobs from surveyors and engineers to roughnecks and workers on the rigs….and a lot of truck drivers. In fact they can't hire enough licensed and certified truck drivers to handle the demand for all the work up here. The good thing is there's a lot of jobs, the bad thing is there's a lot of trucks.
Millikan says the stone quarries are back to crushing rock for the drill pads, and access roads. Each day, loaders, and trucks are moving thousands of feet of pipe and millions of gallons of water up and down these rural roads.
Millikan is a big advocate of developing the Marcellus Shale — the rock formation that contains natural gas. He says each new drill site brings lots of work.Millikan: There's 25 people probably working on this rig, and they make anywhere from $60,000 to $100,000 to $130,000 a year depending on their job and they're going to have a job as long as they want to do it.
Millikan is a geologist who has worked for the oil and gas industry. Driving in his truck, he says the ecological fears are overblown.
Millikan: This is the biggest thing in Pennsylvania in a century. In the end I think the gas industry will be more beneficial in terms of revenue and economics and jobs and benefits to the state than coal was.
Millikan's students include a 24-year-old waitress, a laid off draftsman and a few soldiers who recently returned from war. They're all locals he says, and with their two-year degree they'll start at $40,000 a year — a significant wage for this area.
Close by in South Montrose, Pennsylvania, "gas men" as they're called, line up for sandwiches at Lockhart's Deli and gas station. Owner Don Lockhart says the industry has turned his failing business into a goldmine. The increased traffic has tripled the amount of gasoline he sells and he now checks the paper each day for the price of natural gas.
Lockhart: It was $4.59 this morning..
Lockhart's business used to depend on two local factories, which closed taking 1,400 jobs away with them.
Lockhart: So the gas coming in here, was like you needing a transfusion, and they come along and give it to ya. And that's basically what they done for us.
A map on the deli wall is dotted with colored push pins, showing all the different places where the gas men have come from, places like Texas and Arkansas. And although Lockhart is proud to show off the map, it illustrates one of the criticisms held by drilling opponents that many skilled jobs go to workers from out of state.
For Don Lockhart, drilling means a windfall for him and his neighbors.Lockhart: I have some neighbors of mine that live down the road from me that just got a $178,000 royalty check. Their house needs repair, the barn fell down, they quit farming because they couldn't make any money at it. One of them went out and bought a $50,000 car and wrote a check for it, God that's got to be an amazing feeling, I can't imagine doing that.
The economic benefits are spreading. Hotels are booked months in advance, a local construction company says it has doubled its workforce to keep up with the demand for new pipelines.
But across the border in Wayne County, life is different. Although there's plenty of gas beneath the Wayne County dairy farms, there's no new drilling. That's because the Delaware River Basin Commission has put a temporary moratorium on drilling until it develops its own regulations.
Marybeth Wood is the executive director of Workforce Wayne. She is trying to transform the county's job market. The number one industry in Wayne is retail, followed by the local hospital, and seasonal tourism.
Wood: There is no one that I know of that wants to have anything happen to the water here to the beauty here. It is a good income generator for the accommodation and hospitality industry…but it pays half of what you would find with the natural gas industry.
Wood carries around a chart that shows how wages in Wayne County are much lower than the wages of other down-river counties in the Delaware River Basin — including Bucks, Montgomery and Philadelphia.
Wood estimates that natural gas drilling will create about 1,200 jobs, making it one of the top employers in a county with a population of just 50,000 people.
Meanwhile, back in Elk Lake, Susquehanna County, Andy Henry still wonders if he and his neighbors did the right thing by leasing the mineral rights and allowing industry to come in hauling their truckloads of water and mud.
Henry: Me I sit here and benefit . It's a temporary inconvenience, but I'll be drawing royalties. I just hope that down the road my water is fine, I really do.