Section 5.2: Money talks

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Clarification: The jobs estimate in the report is based solely on the Sanford sub-basin. This post was amended from the original to clarify that information.

Jobs. It’s one of the main buzzwords in conversations about bringing the natural gas industry to North Carolina.

According to the draft study, drilling activities in the Sanford sub-basin alone would sustain 387 jobs a year during the seven-year drilling period. This includes jobs created on-site at wells, known as direct jobs, in addition to indirect jobs, which are created by the demand to produce certain materials needed at drill sites. It also includes induced jobs, which are created by the increase in spending on goods and services in the area.

The top five industries expecting to see job creation, in order, are drilling and gas — with a whopping 65 percent of the jobs — followed by food service and bars, real estate, wholesale trade, and health practitioners.

This number is not static, though. Employment numbers will vary year to year, based on all the other variables related to drilling for natural gas: actual shale gas reserves, number of wells drilled, length of time spent per well, etc. This particular estimate is based solely on the Sanford sub-basin, and the assumption that there will be 386 wells drilled there. So while one year there could be as many as 858 jobs provided for, in another year as few as 59 could be sustained.

And yes, that means exactly what it looks like: all jobs created by drilling for natural gas also end when the drilling is finished. That means these short-term jobs will have short-term effects on economic stimulus — about 7 years worth of effects, to be as exact as we can without good data on gas reserves.

The draft report states: “Each year, as long as the drilling activities continue to occur, the state’s economy will experience positive economic benefits” (196).

Here’s a chart with some potential numbers:

As you can see, 2013 to 2019 is estimated to be the time frame of this economic stimulus. According to the draft report, by the end of 2019 our state will have increased its gross domestic product by $292 million.

According to this model, though, after 2019 our estimated gas reserves are up, meaning drilling stops, meaning the created jobs can no longer be sustained. What about the induced jobs that were created in the community, then? What happens after the wells are dry, and the money spent? And what does our state look like during those seven years?

Next time, I’ll wrap up section 5 with a look at some answers to these questions, as well as a discussion of how our state plans to make its own money off the gas industry, and what that money will go toward.

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