The Leaflet: Appalachian Communities Could Benefit Significantly from Hydraulic Fracturing

Published June 1, 2017

According to a report released in May 2017 by the American Chemistry Council (ACC), the Appalachian region of Kentucky, Ohio, Pennsylvania, and West Virginia is on its way to becoming a petrochemical and plastic-resin manufacturing hub. ACC projects the region will experience a $35 billion increase in investment spending and the addition of 100,000 permanent jobs by 2025. All this is due to the hydraulic fracturing, commonly called “fracking,” revolution, which has made the region’s massive shale gas deposits available for development.

Of the 100,000 new jobs that are projected, 25,000 are in “chemical and plastic products” manufacturing, 43,000 in “supplier industries,” and another 32,000 are in “‘payroll-induced’ jobs in communities where workers spend their wages.” The study also estimates federal, state, and local tax revenues would increase by $2.9 billion over the same period.

“The Appalachian region has distinct benefits that could make it a major petrochemical and plastic resin-producing zone,” said ACC President and CEO Cal Dooley in a press release accompanying the study. One of these benefits being its “proximity to a world-class supply of raw materials from the Marcellus/Utica and Rogersville shale formations.”

paper from the National Bureau of Economic Research (NBER), also released in May 2017, has found “the fracking boom of the post 2005 period led to sizable improvements in the earnings potential of non-college educated men in counties located over geological shale plays.” Specifically, $1,000 per capita of fracking production causes a 6 percent increase in average earnings for males employed outside of the oil and natural-gas industries, including a 2.9 percent increase for non-college-educated men, as well as a 2 percent increase in the total number of jobs for both college-educated and non-college-educated men.

The NBER report reinforces the findings made by researchers from the University of Chicago, Princeton University, and Massachusetts Institute of Technology (MIT) in 2016. In their study, communities near shale basins were examined, and the researchers found hydraulic-fracturing activity brought $1,300 to $1,900 in annual benefits to local households, including “a 7 percent increase in average income, driven by rises in wages and royalty payments, a 10 percent increase in employment, and a 6 percent increase in housing prices.” 

According to Heartland Policy Analyst Tim Benson’s recent Research & Commentary on hydraulic fracturing, the fracking process has transformed the energy outlook of the United States over the past decade, and the rise of shale gas as a replacement for coal has been primarily responsible for the “United States now enjoying its lowest level of carbon-dioxide emissions since 1989. According to the U.S. Energy Information Administration (EIA), fracking now accounts for 51 percent of all U.S. crude oil production. EIA also estimates the continuing switch of electricity-generation fuels to fracking-produced natural gas is responsible for 63 percent of the drop in U.S. energy-related carbon-dioxide emissions over the past decade.”

Of course, the benefits of fracking, including those projected by ACC in its study, can only exist if the fracking industry is protected from misguided and shortsighted attempts to ban it or overregulate it out of existence – attempts based completely on unscientific claims about fracking’s alleged environmental dangers.

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