By Jason Fincke, Executive Director
Builders Guild of Western Pennsylvania, Inc.

Perhaps no industry in Pennsylvania presents more opportunities for employment and economic growth than the energy industry. The discovery of the Marcellus Shale and ways to remove its natural gas has attracted national, if not worldwide, attention. Thousands of jobs and millions of dollars in new revenue are being forecasted by economists and scholars from across the state. In fact, according to various reports, more than 200,000 jobs will be created or supported by this emerging industry, and energy and utility companies will invest some $20 billion in Pennsylvania over the next two years.

Unfortunately, those forecasts do not necessarily translate into jobs or tax revenues for Pennsylvanians. Reports are surfacing that migrant workers from throughout the country (particularly from Louisiana, Arkansas and Texas) are swarming into the area, some being housed in temporary facilities and working long shifts for up to 25 consecutive days. Wages are substandard with little, if any, health or pension benefits provided. Neither the companies that employ them nor the workers themselves are expected to make any long term, meaningful investment in this region, nor are they contributing to the local tax base as anticipated. In fact, many drilling companies are not paying the state’s Corporate Net Income Tax, but instead are paying the much lower Personal Income Tax rate, resulting in significantly lower tax revenues than forecasted.

Should this continue to be the case and if this industry in not regulated properly, the drilling and transportation of the natural gas in the Marcellus Shale could very well generate additional costs for the state and create environmental havoc on our lands and citizenry. The recent failures of gas drilling operations in Clearfield County and in West Virginia are stark indications of what can happen when things go awry.

Rather than being an economic boom for Pennsylvania, the practices being employed by some drilling companies and developers operating in the Marcellus Share are in reality undermining the local workforce, circumventing the use of local contractors, damaging the infrastructure, threatening the local environment and negatively impacting this region’s quality of life. Studies on the impacts of natural gas drilling in other parts of the country have shown that with a migrant workforce, crime increases, infrastructure costs soar, traffic citations and the need for emergency medical services increase, and inflation rates increase disproportionately. This can not be allowed to occur in Pennsylvania.

While the Commonwealth of Pennsylvania issues natural gas drilling permits, there is insufficient oversight of this industry, and companies are given little, if any, incentive to use local labor. While some companies are choosing to use their own migratory workforce, others are claiming that the area does not have sufficiently trained workers willing to travel as is necessary in the natural gas drilling industry. Such claims are unfounded.

Local building trade unions operate some of the nation’s best training centers and have a highly skilled workforce ready to travel throughout southwestern Pennsylvania. Such working conditions are in fact standard operating procedures for local union building trades workers.

As such, to maximize the opportunities that Marcellus Shale drilling is presenting for Pennsylvania, the Builders Guild is reaching out to responsible natural gas drilling companies to help educate them about the quality of the local building trades workforce and the exceptional training facilities and programs that are already in place. Natural gas companies and their contractors need not worry about where they can find a trained, disciplined workforce that focuses on productivity and safety. They are already here, only a phone call away, poised to perform whatever work is necessary for Pennsylvania to responsibly take advantage of drilling opportunities in the Marcellus Shale.

As the debate continues on how to safely and responsibly remove this natural resource, the Builders Guild calls upon the Commonwealth’s elected officials to enact legislation that will protect Pennsylvania and help ensure the use of local union contractors and local union labor to meet the demands of the natural gas industry. Specifically, the Guild supports the enactment of:

• A gas severance tax to provide state funding for the remediation of the environmental impacts caused by the drilling and for the repair of Pennsylvania’s transportation infrastructure damaged as a result of drilling operations. Of the top 15 natural gas producing states, Pennsylvania is the only one without a severance tax;
  
  
• Tax credits for companies which employ Pennsylvanians to work at drill sites, on transmission pipelines and in the construction of compressor stations and other industry related facilities; and
  
  
• Other legislation which supports the use of local contractors and local workers.

The Guild does not support:
The issuance of any state or federally funded grant which is to be used to develop new training centers or facilities to train potential workers for any construction-related work associated with the drilling of natural gas in the Marcellus Shale. Pennsylvania building trades unions already have the training curriculum and facilities in place throughout the commonwealth to train the necessary workforce at no cost to taxpayers. These facilities are jointly funded by building trades unions and their affiliated contractors.

Natural gas drilling in the Marcellus Shale has the potential to be the kind of economic generator and employer that Pennsylvania needs, but it must be regulated appropriately and its developers must be accountable for their actions. That means that they must recognize the value and importance of investing in local labor and providing the necessary means for Pennsylvania to accommodate this emerging industry.

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