Top Union Official: New Energy “Taxes Will Stifle Growth” for Region’s Workforce

Clean-burning natural gas development across the Appalachian Basin, driven by Pennsylvania’s Marcellus Shale, continues to surge, according to data issued by the U.S. Energy Information Administration (EIA) this week. In fact, according to EIA – thanks to advanced technologies and drilling efficiencies [watch this EIA video to learn more] – “Marcellus Shale gas production will exceed 16 billion cubic per day in November,” as the Pittsburgh Business Times reports.

Historic levels of responsible American natural gas production are great news for students, families and communities, small businesses, manufacturers, air quality and our nation’s security – and it’s also helping to create tens of thousands of “well-paying, middle-class careers” for our region’s workforce and labor unions.

A new study released this week – Study of Construction Employment in Marcellus Shale Related Oil and Gas industry [pdf.] – highlights the clear job-creating benefits tied to safe shale development across our labor force. As the North America’s Building Trades Unions notes, “The study found that the Marcellus Shale Play has led to the creation of more than 45,000 jobs in the construction industry – jobs that would not have been created ‘but for’ the development of these oil and natural gas resources.”

Here are key study 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 non-shale related oil and gas industries has fallen by 53.7 percent since 2008, when it reached its peak of 14.8 million labor hours.

Speaking to the report’s positive findings and addressing calls from some for even higher energy taxes in Pennsylvania, Sean McGarvey, president of the North America’s Building Trades Unions – an alliance of 14 national and international unions – tells the Wilkes-Barre Times-Leader this:

McGarvey rejected the idea of an extraction tax on natural gas aligning himself with the argument that more taxes will stifle growth. Lawmakers need “to make sure that they don’t kill this industry before it has the chance to make the largest impact in Pennsylvania and across the country,” McGarvey said. “I wouldn’t want to be on the wrong side of history.”

Here’s what they’re saying about this new study:

  • “Study finds Marcellus a Foundation for Building Trades”: 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. … “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. … “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.” (Washington Observer-Reporter, 10/16/14)
  • “Gas Industry in Marcellus Shale Saved Labor Force”: Sean McGarvey, president of North America’s Building Trades Unions, boasted if not for the boom that started in 2006, thousands of skilled tradesmen like carpenters, plumbers and pipe fitters would still be out of work. “One of the few, if only, bright spots was the jobs created by oil and gas industry,” McGarvey said. … University of Illinois, labor expert and professor Robert Bruno looked at a wide and varied selection of job types that are directly connected to the industry. He examined trades including boilermakers, engineers and pipefitters. Painters, carpenters, masons and others also were included in his report. No other industry has brought such an influx of work for skilled laborers for more than 100 years, McGarvey said. … Further, McGarvey said the report does not mention the long-term manufacturing jobs that the industry brings. Fertilizer and chemical plants that use natural gas as a raw material are in the works for the Marcellus region, he said. (Wilkes-Barre Times-Leader, 10/17/14)
  • “Study: Marcellus Shale Created 45,000 Trade Jobs”: Those in the building trades — local plumbers, boiler makers, pipefitters and electricians — say the Marcellus Shale has been a godsend. “I’ve actually used those words myself. It’s been a real blessing for our members,” said Chris Petrone, of the International Union of Operating Engineers. A new study by the University of Illinois at Urbana-Champaign puts definitive number of the building trade jobs generated directly or indirectly from Marcellus drilling. Totaling the number of hours worked, the study states that some 45,000 new building trade jobs have been created in Pennsylvania, Ohio and West Virginia as a result of the boom. … The building trades are bullish on the future of the Marcellus, believing that shale gas development will be a steady and sustainable source of jobs for years to come. (KDKA-TV, 10/17/14)
  • “Study: Marcellus Shale Created 45,000 Construction Jobs”: Natural gas exploration in the Marcellus shale formation has created just over 45,000 construction jobs, a new study has concluded. The study looked at a 13 trades related to natural gas exploration from 2008 through the first half of 2014. … “A preliminary examination of employment data in states related to the Marcellus Shale…reveals that natural gas exploration has been a strong engine of job growth,” the researchers with the University of Illinois concluded. … The boom in Marcellus Shale production came in recent years thanks to the rapid expansion of unconventional drilling techniques like hydraulic fracturing and horizontal drilling. It has led to historically high natural gas production for the United States and turned the country into a net exporter of gas. (The Hill, 10/14/14)

Agree with these key labor officials, small businesses, local government officials and the clear majority of Pennsylvania voters that we need more jobs, not new job-crushing taxes? Take action today and let our elected officials hear from you.