Abstract
Advancement in drilling technology has increased natural gas extraction activities from the Marcellus shale deposit resulting in a shale gas boom in many regions, including West Virginia. This boom has created a significant labor demand shock to local economies experiencing the boom. A number of studies have shown that a shale gas boom directly increases employment and the income of those working in the industry. However, the boom can also have an adverse impact on other sectors through the resource movement effect and intersector labor mobility, pulling workers away from a related sector like forestry. Thus, an econometric model of employment in the forestry sector was developed to investigate the impact of the Marcellus shale gas boom in West Virginia. There is evidence of a labor movement effect with forestry employment negatively affected by the Marcellus shale boom. Specifically, the overall marginal effect of the shale boom on forestry employment is approximately 435 fewer jobs. However, the extent of the decline is slightly moderated by a higher relative wage between gas and forestry, perhaps suggesting diminishing returns and overall slack in the local labor market.
Study Implications
Although a Marcellus shale gas boom directly increases employment and the income of those working in that industry, it can have an adverse impact on other sectors by pulling workers away from a related sector like forestry. This study showed that employment in the West Virginia forestry sector was negatively affected by the shale gas boom. An important policy issue is how to manage the cyclical nature of shale gas booms and the negative impacts on other industries with long-term growth potential, like the forestry sector. This sector does not suffer through boom-and-bust cycles, making it important for long-term economic stability.
Variations in Produced Water Chemistry and Relation to Regional Geology and Production in the Marcellus Shale, Northcentral West Virginia
