WV Center on Budget and Policy > Blog > Economic Development > IHS Study Shows Mountain State’s Small Share of Shale Boom

IHS Study Shows Mountain State’s Small Share of Shale Boom

Last Wednesday, Jared Hunt with the Daily Mail reported that a new study by IHS Global Insight projects that West Virginia will see a huge boom in economic growth from unconventional oil and gas activity over the coming decades.

According to an IHS Global Insight study, West Virginia’s oil and natural gas industry accounted for 11,900 direct and indirect jobs in 2012. By 2035, the firm projected employment could grow to more than 58,000.

The amount the industry adds to the state economy is also projected to grow nearly six-fold.

Last year, the oil and natural gas industry boosted the state’s economy by $1.6 billion. By 2035, that impact is expected to grow to nearly $9.4 billion.

As we’ve pointed out before, there is little doubt that the state is seeing a surge in economic activity from the development of the Marcellus Shale. However, what I found interesting about the study was the small share of projected unconventional oil and gas activity in West Virginia compared to Ohio and Pennsylvania. All together these three states are projected to contribute $93.7 billion in total (direct, indirect, and induced) value-added economic activity by 2035. As mentioned above, West Virginia’s share of this activity is $9.4 billion or only about 10 percent.

This disparity can also be seen on the number of jobs projected to be created from shale development. Of the 712,228 projected in employment by 2035 by IHS from unconventional oil and gas activity, West Virginia only accounts for about 8.1 percent. Looking at just direct jobs, by 2035 West Virginia is expected to have only 10 percent (21, 559 of 216,542), of the jobs among the three states by 2035.

Studies like this one should always be taken with a grain of salt. After all, there are no facts about the future and there are way too many moving parts to make a reasonable assessment of how the shale play in our region will play out. It is also important to recognize that studies like this fail to account for the costs that drilling imposes on citizens, the environment, and state and local communities.

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