Advances in horizontal drilling and hydraulic fracturing techniques have revolutionized the fossil fuel industry, and they have prompted dozens of companies to set up operations in states with large reserves of natural gas like West Virginia. Community leaders welcomed this economic boom despite harboring reservations about the environmental impact of fracking, but very little of the money generated by extraction operations in the Utica and Marcellus shale formations has found its way into the pockets of local residents.
Meager job growth
That was the conclusion researchers from a Pennsylvania-based think tank reached after studying the economic impact of natural gas extraction on local economies. They discovered that these operations have been extremely profitable for fossil fuel companies, but they have created few local jobs and very little population growth. The American Petroleum Institute made bold claims about a flood of new jobs in a 2010 report that was seized on by local officials, but government data reveals that job growth in the 22 counties that account for about 90% of natural gas production in West Virginia, Pennsylvania and Ohio has been a paltry 1.7%. This is well below the 10% job growth in the country as a whole.
Ritchie, Wetzel and Tyler counties had better jobs and personal income growth than other parts of West Virginia thanks to natural gas extraction, but they still lagged far behind the rest of the country and experienced noticeable population declines despite the energy boom. The prospect of fracking riches and an eagerness to attract investment-led lawmakers in states with newly accessible fossil fuel reserves to revise oil and gas laws, but the prosperity they hoped for has yet to materialize at the local level.
Corporations have a duty to make as much money as they can for their shareholders, so they cannot be blamed for placing profits over the local interests. It is up to government officials to ensure that businesses are run in a way that benefits local communities, but this can be difficult to do in areas that are desperately looking for ways to arrest economic decline and turn their fortunes around.