An analysis of natural gas production in the Ohio Valley finds that the biggest gas producing counties in the region suffered economically over the past decade compared to the rest of the country, although natural gas production was high.
The report released Wednesday by the Ohio River Valley Institute, a nonprofit think tank, shows that 22 counties in Ohio, West Virginia, and Pennsylvania produced more than 90% of the region’s natural gas, but saw declines in their share of income, population, and jobs between 2008 and 2019. Personal income and job growth in those counties lagged far behind the national average, and population declined.
The report includes Belmont, Carroll, Guernsey, Harrison, Jefferson, Monroe, and Noble Counties in Ohio. The West Virginia counties include Doddridge, Harrison, Marshal, Ohio, Ritchie, Tyler, and Wetzel. Eight Pennsylvania counties are also included.
Over 10 years ago, studies from industry and supporters said that natural gas production would boost local economies by providing new jobs and revenue. But according to the report titled, “Appalachia’s Natural Gas Counties: Contributing more to the U.S. economy and getting less in return”, job growth in the 22 counties only increased by 1.7%. Nationally, job growth grew by 10%.
Sean O’Leary is the principal author of the report. He said some economists that have been keeping up with the production of gas by hydraulic fracturing, or fracking, for years were surprised by the results of the study.
“It’s quite evident that not only among the public but even among policy makers, people in a position to know, they really don’t,” O’Leary said. “They really do imagine that there are more jobs and more development going on out there than in fact is the case.”
Economic output in the 22 counties increased by 60%but there was little input into local economies. Jobs decreased by 7.5%, population fell by 9.6 %, and personal income decreased by 6.3%.
O’Leary said that while money is being invested in the counties to produce gas and gas is being sold to produce revenue, very little of that is landing in the 22 counties.
“While the facilities are located in these counties, the people who build them, the material with which they are built, various professional services that are required to do all this, are for the most part acquired from outside of the region,” O’Leary explained.
A lot of the investments is money that is being paid to workers and service providers from outside the counties and it never reaches the local economy.
Joanne Kilgour is the executive director of the Institute. She said in a press release that it’s disappointing that the report was necessary. “You only have to look at what has happened to the downtowns in Bellaire, Steubenville, Wheeling, and Waynesburg to know that jobs and incomes haven’t been growing,” she said.
O’Leary explained that the natural gas industry is in a very vulnerable and risky place because of competition from renewable energy sources. He said it would be wise of policy makers to start exploring other options.
“We have a great opportunity as a region to participate in the efforts to switch to clean energy for a variety of reasons. Some of which are resources that we have locally that can be used in the development of renewable resources,” he said.
President Joe Biden plans to invest billions in clean energy innovation.