Energy jobs come with hidden costs

no jobs tar sandsAt the air quality hearings last week jobs, jobs, jobs was a steady refrain from the oil & gas industry and their supporting organizations, including government officials. In the latest issue of High Country News, Dr. Theo Colborn tells a different story about jobs in the gas patch. The sub-contractor underworld was news to me. Be sure to read the entire article to get the whole employment picture.

Jobs in the oil patch – a realistic look
Many gas patch jobs aren’t high paying once you know the facts
By Theo Colborn

… Extraction companies routinely contract with other companies to provide auxiliary services, creating sub-sub contract and sub-sub-sub contract workers.

Their jobs include driving tanker trucks and heavy equipment, welding, cleaning the inside of fracking tanks, working around compressors and toxic solvents, and maintaining and repairing the vast pipeline infrastructure that delivers the methane. These workers are often the first to get to a spill in order to shovel dirt and apply dispersants. The work they do can expose them to toxic volatile compounds that, when inhaled, can have both immediate and long-term, delayed health impacts.

Employees work long hours, take physical risks and receive little protection. Many subcontractors, for instance, make their workers incorporate themselves and paint the name of their corporations on the sides of their trucks, in order to make it look as though they are self-employed. Yet since these workers usually work for just one subcontractor, they should be considered its employees, entitled to all the benefits that are supposed to come with employment.

When companies pull up stakes and move, these “self-employed” folks end up with no unemployment benefits, because self-employed people are also not required to pay workers’ compensation. But the drilling companies assume no responsibility for them; the workers have to cover their own taxes, health insurance and medical bills, and when the companies decide to drill elsewhere, they’re just out of luck …

One thing that wasn’t said often enough during the air quality hearings is that more than anyone, the new air quality regulations will benefit workers in the field. And because we all know workers in the gasfields, past and present, we care about their health and well-being, too.

A recent study by Headwaters Economics supports Dr. Colborn’s analysis:  Long-Term Energy Development Has Negative Impacts on Western Counties

I posted this a few weeks ago but it’s worth a re-run. According to this study, long-term oil & gas production is more like a curse to local economies because counties tend to sacrifice other business interests at the altar of oil & gas development. It’s called specialization. We suffer from it here in Garfield County.

Even though the oil and gas boom in western states has increased the number of jobs in rural counties there is a distinct downside. Those same counties that reap the economic benefits of oil & gas production also have a decrease in per capita income, an increase in crime rates, and fewer adults with college educations.

Researchers reviewed data from 1980 to 2011, focusing on Colorado, Montana, New Mexico, North Dakota, Utah, and Wyoming, which produce “more than 75 percent of crude oil and more than 95 percent of natural gas in the contiguous West,” according to the study. Researchers looked at the boom period from 1980 to 1982 “because it contained the highest share of personal income from oil and gas for each of the six major oil- and gas-producing states in the U.S.,” and compared those counties changes in per capita income, crime, and education from 1980 to 2011.

In counties that got more than 8 percent of their personal income from oil or gas in the 1980-82 boom and specialized in the field for more than 10 years, compared to similar counties with only one year of specialization, per capita income decreased by as much as $7,000. Those same counties saw a decline in educational attainment as the percentage of adults with a college education decreased by 2.5 percent. The longer the duration of oil and gas specialization, the higher the crime rate.

“These findings are consistent with other research that shows diminished socioeconomic benefit of resource extraction at the local level over time,” the researchers wrote. “The findings also support the theory that a resource curse has affected local areas that are specialized in oil and gas in the six energy-producing states in the U.S. West.”

personal income chart

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2 Comments on “Energy jobs come with hidden costs”

  1. Laurie DeMent Says:

    I have been noticing recently how the two different sections of Rifle appear to have drastically different economies. Downtown Rifle has more storefronts sitting empty than filled while buildings in South Rifle (the airport business area) are filled up with oil and gas industry businesses. Jobs are good, but diversity is important. Since Garfield County’s energy economy is known to boom and bust, perhaps we shouldn’t have all our eggs in one basket as they say.

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