Ilya Marritz covers business for WNYC.
Study Suggests Controversial Gas Drilling Method Could Add Jobs
Wednesday, September 07, 2011
Aggressive development of Upstate New York's natural gas resources could create tens of thousands of jobs and draw large numbers of people to live in economically depressed communities that have been losing population for decades, according to a study commissioned by the state's Department of Environmental Conservation.
The study, prepared for the DEC by the private firm Ecology and Environment, is the final piece of the new draft supplemental environmental impact statement on high-volume hydraulic fracturing and horizontal drilling.
Starting Wednesday, members of the public were invited to comment on the full document.
When the review is finalized, it will become the basis for new rules and regulations on the controversial drilling technique known as hydraulic fracturing or fracking.
The fierce debate over natural gas drilling has long pitted potential economic benefits against environmental hazards. The study released Wednesday focused largely on jobs, land values and tax revenue. Those are the same areas where pro-drilling advocates see the biggest potential benefits of drilling.
Some key findings:
THE SCALE OF DRILLING
• The study's authors envision a 30 year development period: 10 years of "ramp up," and two decades of healthy well production. If New York has as much gas as the optimists say, and regulators approve most permit requests, that could mean as many as 63,000 wells drilled over 30 years. If conditions don't favor the industry, as few as 11,00 wells might be drilled.
• The authors make a mid-range assumption of 1,700 wells drilled every year, on average. Ninety percent would be so-called "horizontal" wells, which are more labor intensive to establish, and may carry more risk.
• As many as 81,000 full-time jobs could be created if natural gas development proceeds quickly. That would include 26,000 jobs in construction and 44,000 indirect jobs in retail and services.
• Because it is impossible to predict the pace and scope of well development, the study authors also predict job growth could be as little as 13,000.
• The study notes that the vast preponderance of jobs will be temporary. While construction of a horizontal well may require more than 400 workers over several months, just one worker is needed to maintain approximately six completed wells.
• These additional jobs could result in anywhere from $121 million to $732 million in new individual annual earnings, in the peak year of natural gas development.
• Anywhere from 15,000 to 91,000 individuals could migrate to New York because of new work opportunities in the state.
• However, it is difficult to predict in advance what locations would draw the most new residents, and some places might gain no population at all.
• While the DEC has largely placed state-owned land off limits for drilling, the industry could still increase year-end revenues by $31 million to $185 million, at the peak.
• The boost to local goverment revenues may be proportionally greater because of property taxes. A single producing well in Broome County could yield $380,000 in new tax revenues in its first year of production, while decreasing steadily after that.
• Land values could go up significantly for properties with extensive mineral rights, but some property owners may see their values decline. A host of impact studies from around the country show damage to roads, air and the visual enviroment may depress land values.
It's now up to the people of New York to share their input on the review with Albany regulators. Citizens can comment through DEC's website or by mail, through December 12, 2011.