Tribune Chronicle
Housing rentals in Monroe County in southeastern Ohio have rocketed to between $1,500 and $2,000 a month from between $300 and $350.
Visitors to Carroll County can probably get a motel room ... about three years from now.
Article Photos
A local contractor closes a valve on his tanker truck at a Range Resources hydraulic fracturing operation in Claysville, Pa. The company is one of the many using the fracking process to extract natural gas from deep wells drilled into the Marcellus Shale.
New and used car and truck sales in those two counties, plus three nearby counties, rose 11.3 percent in 2011 from 2010, outpacing the 9.4 percent gain statewide and 9 percent in Trumbull, Mahoning and Columbiana counties. Jobless rates are improving faster than many other counties around the state.
The thread tying those counties together is the booming natural gas drilling industry. Despite some skepticism and worries, the economic impact from leases worth millions of dollars to landowners and spending by experienced drilling workers coming from the Texas area already is beefing up business and county coffers, as well providing jobs in areas long known for high unemployment.
''This is just in its infancy,'' said Glenn Enslen, director of economic development for Carroll County. ''I'm visited weekly by folks who talk about results similar to the boom in North Dakota. They have a half-percent unemployment rate there, and the population of the county has doubled in three years.''
Fact Box
An in-depth look at the shale boom's economic impact in nearby counties; Part 2 in a three part series
Shale expected to bring jobs
By LINDA HARRIS
Special to the Tribune Chronicle
STEUBENVILLE - Mike McGlumphy is the first to admit there are jobs to be had in Ohio's shale fields.
He's just not convinced there will be as many as some early estimates had suggested, particularly entry-level positions.
''In my case, I'm looking at 6,000 known (entry-level) jobs statewide, those are entry-level jobs companies told us they'd be hiring for,'' said McGlumphy, director of the Jefferson County Workforce Investment Act One-Stop Center. ''This was no scientific survey, just us picking up the phone and asking the companies, but I didn't know what else to do. We're just trying to get ahead of it, and that was the best way to do it.''
Competing studies, one by an Ohio State University economics professor, the other commissioned by the Ohio Oil & Gas Energy Education Program, or OOGEEP, offer widely disparate projections. OOGEEP's study, conducted by Cleveland research firm Kleinhenz & Associates, predicts more than 204,000 jobs, direct and indirect, will be created by the shale drilling boom; the Ohio State study, however, pegs the number at around 20,000.
''I think, to be realistic, it will be somewhere between (those two), said Laura Jones, communications director for JobsOhio. ''But it's hard to say. We like to look at all the studies because more information is always better.''
Jones said the best indicator is probably to look at areas like Pennsylvania and West Virginia, where shale drilling is more advanced. ''I think we have to look at what's going on there, they're farther into the process than we are.''
The numbers out of Pennsylvania are encouraging. Fact sheets compiled by the Pennsylvania Department of Labor show strong job growth across the commonwealth in drilling and ancillary industries. The strongest gains (1,928 jobs) are in the Northern Tier (Bradford, Sullivan, Susquehanna, Tioga and Wyoming counties) where drilling activity is strongest over a three-year period beginning with the second quarter of 2008.
Drawing on data compiled between the third quarter of 2010 through the same quarter in 2011, the state also pegged the average wage in the core drilling industries at $76,918 and the average wage in ancillary industries at $63,155, both significantly higher than the average across all industries ($46,559).
Officials in nearby Shale hotspot Washington County, Pa., say the numbers don't lie.
''I can think of no greater statistic on the impact of Marcellus Shale in Washington County than back in October, the U.S. Department of Commerce Bureau of Labor Statistics ranked Washington County as No. 3 in the nation in terms of employment growth,'' said Jeff Kotula, director of the Washington County Economic Development Partnership.
And West Virginia University researcher Tom S. Witt said Marcellus development created 7,600 jobs and generated $2.35 billion in business volume in the Mountain State in 2009 alone.
Witt, director of WVU's Bureau of business and Economic Research and co-author of a study examining the impact of the shale play on the Mountain State, said the potential exists ''for upwards of nearly 20,000 jobs by 2015 if drilling grows at a 20 percent rate each year.''
Dan Alfaro, communications director for Energy In Depth-Ohio, said shale jobs to date show every promise of living up to the hype.
''This is the opportunity of generations, and we're still in the regional development stage,'' he said, suggesting the Buckeye State has already reached the 20,000 benchmark. ''We're at the very onset of this, and we're already starting to see thousands of jobs and investment ... we're seeing a resurgence in steel industry in Youngstown because of this, we haven't seen that in years, and it's just started.''
But McGlumphy points to an OOGEEP report identifying 70 occupations the oil and gas industry will need in the field jobs ranging from derrick hands, equipment operators and facility operators to floor hands, pump operators, pumpers, roustabouts and welders.
Of the 70 occupations, McGlumphy said 57 require an associate degree or better.
''That leaves just 13 positions, and about 10 of those require credentials - Class A CDLs, heavy equipment certifications, welding certifications, water certifications. That leaves basically three entry-level occupations that require high school degrees or the equivalent,'' McGlumphy said.
Linda Harris is business editor for the Herald-Star / The Weirton Daily Times.
Carroll County's unemployment rate fell to 8.5 percent in November from 11.2 percent a year earlier and the rate is on track to fall more. Enslen said Texas based Select Energy Services is gearing up to hire 200 people to repair drilling equipment, haul water and provide other services to drillers. He said those and other shale jobs are seen as long-term.
''Young folks who go to work for Select will probably retire from Select,'' he said.
The result is a boom for places to sleep, restaurants and other businesses.
''Our motels are full. You can probably get a reservation in three years,'' Enslen said.
Other counties have done even better. Jefferson County's jobless rate tumbled 26.8 percent to 9.3 percent in the same period. Harrison County's rate improved 26.3 percent to 8.4 percent.
The Appalachian counties along the Ohio River outperformed counties with traditionally strong economies. Cuyahoga County posted a 19.8 percent drop in unemployment to 7.3 percent, while Franklin County's rate improved 15.2 percent to 6.7 percent.
The counties even are outperforming Trumbull and Mahoning counties, where the shale boom is only starting. Trumbull had a 22.6 percent improvement and Mahoning a 17.8 percent gain in their jobless rates for the November periods.
Job gains at the GM Lordstown Complex, RG Steel and other large employers drove the improvement more than shale drilling, but the nascent industry did add about 1,000 jobs, with more expected in coming years.
For now experienced workers from Texas, Oklahoma and other long-time energy states make up a significant number of the new residents. The rush is creating a shortage of motel rooms, apartments, even campsites and is jacking up rent.
Sam Moore, owner of Swiss Lands Realty LLC in the Monroe County seat of Woodsfield, said places that have rented for $300 to $350 a month now go for $1,500 to $2,000.
''I heard of people getting $600 a month for a spot to park a camper'' across the Ohio River in West Virginia, he said.
Land and house sales haven't dramatically increased, however, because owners can make more money through gas leases on land or by renting their houses, he said.
The exception has been cases where people buy a house with the intention of renting it to shale gas workers.
Richard Kiko Jr., chief executive officer of Kiko Auctioneers & Realtors in Carroll County, expects homebuyers to emerge as the shale gas rush matures.
''The first wave is a lot of out-of-state workers who live out of hotels and rentals. The second phase will be people hired for long-term jobs, a lot of engineering and monitoring,'' he said.
With predictions of 100 wells being drilled a year, Kiko sees mid-priced houses in the $50,000 to $150,000 range as being in the most demand as workers advance from motels to rentals, then to permanent housing.
He said he's not concerned about overly rosy drilling projections, largely due to a housing shortage.
''We're lucky in northeast Ohio because we have a reduction in supply because of no construction in recent years, then you add this demand, and we'll have a double effect,'' he said. ''Even if they drill 50 wells a year, that's more jobs.''
More jobs means more spending on vehicles and other items that generate sales tax revenue for counties.
Harrison and Carroll counties, at 8.7 percent and 8.6 percent respectively, surpassed the statewide increase of 8.4 percent when comparing October 2011 to October 2010.
Monroe County did even better, posting a 12.2 boost in sales tax receipts to $1.38 million for the two months.
''We've seen years where we had a carryover from year to year of less than $20,000. We'd have to go to the bank and borrow to make payroll at the end of the year. This year, we have over a $300,000 carryover,'' Monroe County Auditor Pandora Neuhart said.
New and used vehicle sales fueled much of the sale tax gains. New-vehicle registrations in title offices of the five counties hit 3,808 in 2011 from 3,179 in 2010, a 19.8 percent increase.
New-vehicle sales in Monroe County surged 37 percent for the period to 259, while Carroll County saw a 30.3 percent gain to 580.
Stronger sales will prompt Mike Knowlton to add a mechanic at his Knowlton Ford Mercury in Woodsfield.
''People in the county are starting to get money from land leases. People are buying trucks and things they normally wouldn't have bought,'' he said. ''There's more optimism. We feel we're on the front end of this. We think it'll get better.''
Despite the glowing optimism, skepticism remains.
A study commissioned by an Ohio oil and gas group that forecast 200,000 Ohio shale jobs by 2015 was countered by an Ohio State University study that predicted 20,000 jobs.
Residents are concerned about contamination of their water well, as well as damage to their roads and land.
Monroe County's Neuhart noted the Environmental Protection Agency came in on one drill site because the driller let some runoff go into a creek.
Others question whether the gas boom will be real.
''Everyone seems to be waiting to see if the well comes in,'' he said of well-drilling that ended the week of Jan. 8.
Workers are tearing down the rig and equipment, which Neuhart said required 70 semi-trucks to haul to the site, but the well has yet to be ''fracked,'' in which millions of gallons of water, sand and chemicals are forced into the bore to fracture the shale and release gas.
''A lot of people are still skeptical, but we can't stop drilling. We have to learn to work together, and I think we can,'' she said.