Report Claims Gas Industry Boom Hasn't Led To Promised Growth in Shale Communities

A recent Ohio River Valley Institute report titled “Appalachia’s Natural Gas Counties: Contributing more to the U.S. economy and getting less in return” claims the natural gas boom in Marcellus and Utica shale fields has failed to deliver promised economic growth to local communities in Pennsylvania, West Virginia and Ohio.

The report says despite producing 90% of the region's natural gas, jobs in the 22 counties studied rose just 1.6% as compared to national growth of 9.9%. The report goes on to say economic output in those counties grew by 60% (three times the national rate) but their share of the nation's personal income fell by 6.3% and share of population fell by almost 11%.

According to the report, Pennsylvania's eight primary gas-producing counties, including Washington and Greene counties, fared better, gaining 4.6% in jobs from 2008-2019, while Ohio's seven gas-producing counties fared the worst with a net job loss of 8%. Washington County, which has by far the largest population among all Pennsylvania gas-producing counties, was the best performing, with a rate of personal income growth that slightly exceeded that of the nation. Tioga, Susquehanna, and Sullivan counties in northeast Pennsylvania also exceeded the state, but not the national, average.

West Virginia's natural gas counties did outperform the rest of the state for personal income and job growth, but the report states that growth was less than half the national average. Study author Sean O'Leary said in a press release, “What’s really disturbing is that these disappointing results came about at a time when the region’s natural gas industry was operating at full capacity.”

The report cited data from both the U.S. Bureau of Labor Statistics and the Bureau of Economic Analysis.

The Marcellus Shale Coalition issued a response to the report disputing the data and labeling the institute as an activist organization. “The report cherry-picks specific counties to focus on very narrow population subsets, ignoring broader regional job and economic indicator,” MSC President David Callahan said in the response. The statement says the report was purposefully selective in its statistics and ignored key indicators such as impact fee disbursements, state tax revenues, lease royalty payments and consumer energy savings.

OVRI is a think tank that generates research aimed at moving the region's economy toward clean energy and away from extractive industries. Its report states although gross domestic product growth rose in the gas-extracting counties from 2008-2019, communities largely failed to reap the benefits because materials, labor and equipment were often outsourced.