Going All 1099 On Your Shale Gas

Does drilling in the Marcellus Shale benefit Pennsylvania at all? I ask that question because the pro-industry camp, according to David Passmore, has "puffed" up the employment numbers. On the other side of the debate, environmentalists are waging their own propaganda war. In the middle are state residents who aren't getting enough (if any) information useful for deliberation.

I have no doubt that the job creation numbers floated via the press are dubious, at best. That suggests that the Marcellus Shale Coalition (MSC) doesn't have a case to make. Obfuscation is the public relations strategy of choice.

No one should be excited about the core jobs associated with extraction. A recent NPR story about the nascent tourist industry in South Sudan reminded me of the perils of a resource economy:

South Sudan could certainly use the tourists: The economy is based entirely on oil, which doesn't create lots of jobs.

"As much as we are fortunate to have the oil wealth, the oil wealth may not be there for life. But these animals will be there for life if we manage them well," says Daniel Wani, an undersecretary in South Sudan's Ministry of Wildlife Conservation.

Look no further than revenue rich, jobs poor Nigeria. How a government invests that cash flow is critical to the prosperity of a country awash in high-demand resources. The golden egg the goose is laying concerns money, not employment.

The MSC is puffing up the job creation numbers to scare off a tax, the main means for Pennsylvania to benefit from the Marcellus. The workforce here today, such as it is, could (likely will) be gone tomorrow. That's the nature of the boom of 1099 workers that Passmore discusses in this report:

From these observations and the workforce data we analyzed, we conclude provisionally that the number of Pennsylvania residents in “1099” employment is increasing in Marcellus Shale core industries. More decisive information could be available soon, however. In December 2010, the Center for Workforce Information and Analysis indicated that reporting information about “1099” employment and place of residence of Pennsylvania workers in Marcellus Shale core industries is part of its research priorities.

Remember the EMSI report I blogged about almost two weeks ago? 1099 employment is mushrooming in energy states such as Texas and Oklahoma. Skilled workers in core industries go wherever the rush is. That's part of the job description. All the current workforce development going on Pennsylvania in response to shale gas extraction will benefit the global labor force. That's a positive development, but one that won't steer voters away from a higher tax on the industry.