The Utica Shale Effect

The latest report from the Ohio Department of Jobs and Family Services confirms what everyone living in eastern Ohio already knows:  the development of the Utica Shale formation far underground is producing an economic boom.

Although the just-released information is, inexplicably, almost a year old, it tells a powerful story about what the discovery and extraction of natural resources can do.  In the first quarter of 2012, jobs produced in the oil and gas industry increased 17 percent over jobs created in the same period in 2011.  There were more than 5,800 jobs in core industries like pipeline construction and oil drilling and ancillary businesses like freight trucking and environmental consulting.  Moreover, the jobs paid well:  the core industry jobs averaged annual salaries of almost $74,000 and the ancillary industry jobs paid, on average, almost $59,000 a year. Equally important, these are jobs that won’t be moved overseas, and they will last as long as there is shale oil and gas to extract, which is expected to be decades.

Those good-paying jobs were created by private companies footing the bill to collect a commodity that has a proven market, without the need for government programs or government direction.  If we want to grow our way out of our economic doldrums, we’d be well advised to pay attention to what is happening in eastern Ohio and in the Dakotas and letting private companies focus on finding, developing, and selling our natural resources — and employing our workers as they do so.

Coal Curse

The tragic mine accident that has killed 25 West Virginia miners and left another four unaccounted for and trapped far below the surface is just another reminder of the curse of coal.

In southeastern Ohio, eastern Pennsylvania, and West Virginia, coal is an abundant natural resource that has been a staple of the economy for more than a century.  It can provide power and heat and light and can help to reduce our dependence on foreign oil.  It can provide steady, good-paying jobs that cannot be exported overseas for people who do not have college degrees.  It can help to bring needed cash and investment to poor areas.

And yet, the curse of coal is that it is challenging to extract.  Underground mining poses risks of mine explosions, floods and collapses.  The linked CNN article includes a sobering chart of death tolls in American mining disasters, accidents,  and collapses.  Even more appalling is the coal mining safety record in China, where accidents seem to happen routinely.  Indeed, last year 2,631 coal miners died in mining accidents in China. Surface mining, which used to be called strip mining, poses its own challenges.  That method of removal of coal has had a profound environmental impact in southeastern Ohio, where strip mining — particularly in areas where early methods were used — left behind a grim, scarred, denuded landscape with tremendous erosion and surface water problems.  Many strip-mined areas have not fully recovered, years later, and many look as though they never will.

In Appalachia, coal is a blessing and a curse.