Oct 16, 2014 3 min read

A recent study concludes the oil and gas industry is building up the building trades.

“This study confirms what trades have known for some time: The shale industry leads to many construction and maintenance jobs, and that this started happening during a depression, not a recession,” said Scott McGarvey, president of North America’s Building Trade Unions.

McGarvey addressed the media Tuesday morning during a teleconference about the findings in “Study of Construction Employment in Marcellus Shale Related Oil and Gas Industry.” He was joined by Robert Bruno, the primary author of the study and a professor at the University of Illinois at Urbana-Champaign.

Bruno is director of the school’s Labor Education Program, which this summer analyzed Marcellus Shale and natural gas employment data from 2008 through the first part of this year. It included all counties in Pennsylvania and West Virginia, eastern Ohio counties. and three counties in Maryland and five in Virginia.

Marcellus is in those five states plus New York, which does not allow fracking. Neither does Maryland, where the shale formation exists in only the westernmost tip.

Data from workers in 13 crafts – union and nonunion – were examined: boilermaker, carpenter, electrician, ironworker, insulator, laborer, operator, painter, pipefitter, plasterer and mason, plumber, sheet metal worker and Teamster.

Figures specific to Southwestern Pennsylvania were not available. “We were not looking county by county or at a certain region,” Bruno said. “That would be a good followup.”

McGarvey, however, said his trade union’s organization could provide a barometer for this region. “We can dig down through our data from local unions and pinpoint how many hours people have been working on certain projects.”

The authors – Bruno and research assistant Michael Cornfield of the University of Illnois at Chicago – reported some interesting findings:

• “Construction and maintenance spending reached $5 billion in 2013, growing by 61 percent from (2012). In that year alone, the industry created over 4,600 construction jobs in eight trades… In 2014, $6.5 billion has already been committed.”

• From 2008 to 2014, “about 35.8 million labor hours came from major plant capital and maintenance work in the oil and gas and related indirect industries with an annual growth rate of 30.7 percent.”

• “The build-out of the oil and gas industry in 2013 resulted in an additional 5,500 craft worker jobs.”

• “Conversely, construction activity in nonshale related oil and gas industries has fallen by 53.7 percent since 2008, when it reached its peak of 14.8 million labor hours.”

McGarvey, who also is chair of the Oil and Natural Gas Industry Labor-Management Committee, said oil and gas enabled the Marcellus region to outlast the Great Recession, which officially ran from December 2007 to June 2009, but which is still being felt in many areas.

Actually, he contends, this area has done better than outlast a severe economic downturn.

“Thousands of people kept their jobs and kept their health care in Marcellus Shale, whereas this didn’t happen in other areas of the country,” McGarvey said.

A reporter from Eastern Pennsylvania queried McGarvey on a hot issue: the lack of a state severance tax on gas and oil. Pennsylvania is the largest natural gas-producing state without one.

“I think a severance tax would be a deterrent,” he said. “It’s a fledgling industry and we have to make sure investments come to fruition. We don’t want to kill this industry before it can have a maximum impact.”

The study’s conclusion was simple, yet definitive – and no surprise in Marcellus country. “Natural gas exploration has been a strong engine of job growth.”