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Oil, gas industry disputes report about economic gains from shale drilling being overstated

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The oil and gas industry disputes a multi-state research team's claims that the economic gains from shale drilling are being significantly overstated by the industry as well as government.

Charlie Burd, president of the Independent Oil & Gas Association, said the report, released Nov. 22 by the Multi-State Research Collaborative, portrays "blanket assumptions" as fact.

In a study released Nov. 22, the Multi-State Shale Research Collaborative said real job growth "remains small relative to overall state employment" and said supporters "fail to mention the costs imposed by drilling on communities, local governments, and the environment."

"A review of statements by representatives of shale drilling firms and their allies makes the motivation for this exaggeration clear — to preclude, or at least to minimize, taxation, regulation, and even careful examination of shale drilling," the collaborative said. 

But Burd questioned the validity of the group's claims, saying suggestions that jobs numbers are being inflated for tax reasons "couldn't be further from the truth."

"We've never shirked our responsibility to pay our fair share of taxes," he said. "Here in West Virginia, we pay a 5 percent gross sales tax, a severance tax. On top of that, we pay a fee of 4.7-cents per million cubic feet of production -- that's $20 millionth of $25 million annually that goes to pay down unfunded workers compensation.
"And on top of that, we pay property taxes on our reserves. Add to that the sales taxes we pay for all the services, payroll taxes on wages ...(their) statement is just inaccurate."

Burd insists shale development is boosting employment, saying it's clear "more people are working now than there were five years ago."

"I just read an article earlier in the week about how West Virginia Department of Highways needs drivers because theirs are leaving to take jobs in the industry, and that's just one facet of it," he said. "A lot of people are benefiting from shale oil and gas development, a lot of wealth is being created."

But the research collaborative insists shale "is simply not a significant driver of job growth or the overall economies of the six states with major deposits," a list that includes West Virginia. They also suggested a dip in the number of wells drilled as well as jobs in 2012 "raises questions about the stability and permanence of even the small number of jobs that have been created."

Ted Boettner, executive director of the West Virginia Center on Budget & Policy, said policymakers "need to make the important public investments in higher education and workforce development that will diversify our economy and make it stronger over the long-term."

WVCBP is a member of the Research Collaborative.