Flashback to 2021. Self-proclaimed economists at the Ohio River Valley Institute (ORVI) are once again perpetuating false claims that natural gas production hasn’t created the job or economic benefits in key shale producing counties.
Repeating the same methodology that omits important economic indicators, including the impacts COVID-19 had on economies worldwide, it makes sense this update still relies on cherry-picked data and ignores very real benefits communities, members of the building trades, business leaders, and workers have realized from natural gas’ growth in the region.
“For our people to be able to take paychecks home every week, put food on the table, and actually have a good life for their family – it’s unbelievable,” Patrick Dolan, Business Manager, United Association Local 524 told a group of business and industry leaders in Wilkes-Barre this spring.
“So where would we be without [natural gas] over the years? I’d say some of us would have lost membership, but instead we have a steady increase in membership.”
The Marcellus Shale Coalition covered ORVI’s inaccuracies extensively when ‘Frackalachia’ debuted in 2021 (see below). Doubling down on their process of hand-selecting data to fit a pre-written narrative, the report wrongly claims production is stagnant. More, the report excludes impact fee disbursements, state tax revenues, public and private leasing and royalty payments, and energy savings – all of which contribute to community wellbeing and economic prosperity.
In 2022, for example, revenues from taxes paid by Pennsylvania natural gas operators reached $2.5 billion in as little more than a decade.
“Writing from Washington state, the report’s author – a playwright – has said ‘the natural gas boom has manifestly failed to deliver jobs and prosperity.’ We’d strongly encourage the ‘researcher’ to visit Washington or Lycoming County and talk with the building trades members and small businesses who’ve benefitted from reliable, energy-sector work,” MSC President David Callahan told reporters.
The author, a playwright, admits “no math going on here” in deeply inaccurate so-called economic analysis
Despite a decade-plus record of supporting tens-of-thousands of jobs, bringing union halls to full employment, and driving community growth across the region, a recent report from a newly activist group – the Ohio River Valley Institute – claims natural gas development has “failed to deliver jobs and prosperity.”
That sure comes as a surprise to many Pennsylvanians who’ve experienced the very real, game-changing economic benefits tied to safe, responsible natural gas development. When asked this fall on CBS This Morning, for example, what “fracking” has meant to the region, Allegheny County Executive Rich Fitzgerald (D) didn’t hesitate: “It’s huge,” Fitzgerald said.
Across the political spectrum, among business and labor communities, farmers and suburbanites, there’s agreement – natural gas is essential to Pennsylvania’s economy.
“I can tell you, in 2010, my local was at about 10% unemployment,” Jim Kunz, International Union of Operating Engineers Local 66 business manager told the New York Times last year. “Natural gas started to come here in about 2010. Within a year to a year and a half, we went from 10% unemployment to actually over employment. I had to look for people. We went to full employment, and we’ve been at or near full employment, and occasionally over employed, since.”
In northeastern Pennsylvania, Larry Allison, Jr., co-owner of a crane company, shared with the New York Times in 2020 that the natural gas sector “created high-paying jobs” with local crane operators “making $10 per hour more than they were before” shale development took off.
Yet, dubbing the region “Frackalachia”, the self-described “independent” Ohio River Valley Institute uses cherry-picked data and omits key economic indicators for a junk science report that’s hardly reflective of what our communities have experienced.
These deeply inaccurate findings should come as no surprise, though. The report’s author, who lives in Washington state, even admitted to the Post-Gazette that “there is almost no math going on here” in the so-called economic report.
The news outlet also reports ORVI, which formed a handful of months ago and refuses to transparently disclose its funders, “advocates…to shift away from fossil fuel extraction” and “has received funding from the Heinz Endowments,” a group with a long history of bankrolling anti-natural gas activism.
Further, the organization’s staff and advisory board is as a “who’s who” of well-known activists who’ve spent more than a decade trying to ban safe, responsible, job-creating shale gas development.
“We understand that some activist organizations and their allies across the country seek to advance a narrative aimed at marginalizing and undercutting these tens of thousands of family-sustaining jobs as well as the natural gas industry’s community benefits,” Marcellus Shale Coalition president David Callahan said.
“Writing from Washington state, the report’s author – a playwright – has said ‘the natural gas boom has manifestly failed to deliver jobs and prosperity.’ We’d strongly encourage the ‘researcher’ to visit Washington or Lycoming County.”
Let’s take a look at what we know about this newly formed activist group and how their latest “research” misses the mark.
Bankrolled by Heinz Endowments
While claiming to be “independent,” ORVI does not transparently disclose its funding sources. While the group says they’re based in Johnstown as a project of the Community Foundation for the Alleghenies, four of the five listed ORVI staff live out-of-state in Washington (see here, here, here) and West Virginia.
It’s not clear why ORVI is not transparent about its funding sources, but according to the Post-Gazette, ORVI has received Heinz Endowments funding. Heinz records don’t show direct grants to ORVI, rather, the endowments gave nearly $1 million to the Community Foundation for the Alleghenies in 2020 “to advance sustainability in the region through protection of environment, health and climate.” The foundation, which has a long history of bankrolling anti-natural gas organizations, also supported three groups in the tri-state area – Keystone Research Center, Policy Matters Ohio, and the West Virginia Center on Budget and Policy (the group ORVI staff member Ted Boettner founded and previously led) – with $150,000 in grants to “advance a sustainable economic vision for the Ohio River Valley.”
The New York-based Park Foundation, another notable foundation for their funding of anti-natural gas activities, also gave $70,000 to the Community Foundation for the Alleghenies in 2020 for an “environmental health project and policy development.”
Activist Leadership, Board
From its staff to the advisory council, ORVI’s team is a list of notable, well-known environmental activists with a long, clear record of trying to ban shale development. Consider Joanne Kilgour, the group’s executive director, who previously led up the Pennsylvania Sierra Club and Center for Coalfield Justice. Kilgour has actively campaigned to stop natural gas development and repeatedly called for a “complete ban on fracking.”
Anthony Ingraffea, who identifies as an anti-fracking activist and sits on ORVI’s advisory board, has produced a number of scientifically debunked studies related to shale development, and is affiliated with well-known groups such as “Artists Against Fracking”, the Park Foundation, and PSE.
Others on the advisory board are associated with Heinz Endowments-backed groups such as Matt Mehalik, executive director of the Breathe Project, who has promised to make the region “off limits to fracking” and Dr. Jill Kriesky, previously with the Southwestern Pa. Environmental Health Project, a group opposed to shale development.
“No Math Going On Here”
The author’s admission that “there is almost no math going on here” is a stunningly candid admission for a so-called economic report. The report cherry picks specific counties to focus on very narrow population subsets, ignoring broader regional job and economic indicators. For example, the economic and job multiplier tied to shale gas extends across the Commonwealth, not just the handful of counties they selected.
In fact, according research from PwC for API, the natural gas and oil sector supports 300,000 jobs in Pennsylvania, ranging from “rig hands” to truckdrivers, to utility workers and other service personnel. And if the U.S. were to “ban fracking,” as some politicians push, Pennsylvania would lose more than 600,000 good-paying jobs and have a $23.4 Billion hit to state and local tax revenue – among other crippling impacts, the U.S. Chamber of Commerce reported in 2019.
The report purposefully ignores this broad job multiplier by excluding counties surrounding Washington and Greene. This exclusion skews the data by assuming that an individual must live in the county where he or she works to be counted as a shale-related job. This is an objectively false assumption and ignores a significant part of the population who live in Allegheny County, for example, but drive a couple miles south to Washington County for work. Or people who live in Uniontown, Fayette County – which is omitted from the report – and drive a few miles west to work in neighboring Greene.
Similarly, the report dismisses the petrochemical manufacturing facility under construction in Beaver County, which represents the largest private investment in Pennsylvania since WWII and created upwards of 7,000 good-paying jobs, including many union, during its construction. That plant in Beaver County, which the report completely ignored, wouldn’t be possible without local ethane production and has driven employment growth across the tri-state region.
Ignores Key Indicators of Economic Prosperity
While ORVI was purposefully selective in its statistics, the group also ignored key indicators that contribute to community wellbeing and economic prosperity. Factors such as impact fee disbursements ($2 billion since 2012), state tax revenues (more than $5 billion), public and private lease and royalty payments ($10 billion), or the ~$1,200 average household consumer energy savings are objective, important facts in driving local economic gains.
Each of these factors has a significant economic impact on its own, but are pushed aside because they don’t fit ORVI’s pre-determined anti-natural gas narrative.
Consider this fact. The Independent Fiscal Office reported last year that personal income growth from 2016-2018 was the highest in counties with shale development. Greene County had the highest growth rate in the Commonwealth, with a 7.5% increase. Susquehanna County also made the top five list with a 6.7% growth rate. The trend continues with Washington (6.3%), Bradford (5%) and Lycoming (4.6%) all beating the state average.
What’s more, Pittsburgh was recognized as the “most successful” Rust Belt city comeback, with the 2019 acknowledgement citing the “steady supply of well-paying, blue-collar jobs” from the Marcellus shale industry as a primary driver.
“Our region’s diverse and broad-based energy workforce, and the significant economic, environment, and climate benefits that clean natural gas continues to deliver for consumers, is without question,” MSC’s Callahan said. “We’re proud of this work and committed to advancing a fact-based dialogue on policies to move Pennsylvania forward.”
