Speaker 1: If you live in the region, you only have to
Speaker 1: walk through the downtowns to see what I'm saying. Whether
Speaker 1: it's you know, Steubenville, Ohio, Balero, Ohio, Wheeling, West Virginia, Waynesburg, Pennsylvania,
Speaker 1: all of those downtowns are hollowed out shells of what
Speaker 1: they once were.
Speaker 2: Hey, there, this is drilled. I'm Amy Westervelt and that
Speaker 2: was Sean O'Leary from the Ohio River Valley Institute. O'Leary
Speaker 2: is a native West Virginian who's watched firsthand what first
Speaker 2: coal and then gas did to his community. He doesn't
Speaker 2: live in West Virginia anymore, and that has become a
Speaker 2: topic of criticism from people who did not appreciate some
Speaker 2: of his recent work. Last month, a leary and the
Speaker 2: organization he works for released a report that really made
Speaker 2: the oil and gas guys mad. It takes on a
Speaker 2: simple question, did the fracking boom actually deliver all those
Speaker 2: economic benefits we've heard the industry talk so much about.
Speaker 2: The report specifically looks at the region O'Leary has dubbed Frakalacia,
Speaker 2: encompassing parts of the Ohio River Valley in Ohio, Pennsylvania,
Speaker 2: and West Virginia. As you might recall from every election
Speaker 2: cycle in the last decade, whenever people start talking about
Speaker 2: the environmental impacts of fracking or the potential of a
Speaker 2: fracking ban, the industry has the same response.
Speaker 3: The amount of jobs that are created by this technology
Speaker 3: cannot be overstated. The United States Chamber of Commerce, for instance,
Speaker 3: tells me doing a way with this one technology would
Speaker 3: lead to the loss of nearly nineteen million jobs here
Speaker 3: in the United States.
Speaker 2: The US is now the leading producer in the world
Speaker 2: of natural gas and of oil, and that has powered
Speaker 2: benefits in our economy.
Speaker 3: Tens of thousands of jobs paying an average salary of
Speaker 3: fifty thousand dollars. That's what the Ohio Shale Coalition says
Speaker 3: is coming to Ohio.
Speaker 2: But O'Leary and his colleagues analyzed economic data from before, during,
Speaker 2: and after the fracking boom in the Ohio River Valley
Speaker 2: and found something else.
Speaker 1: Measures of local economic prosperity, starting with jobs, also personal income,
Speaker 1: and finally population were underwhelming to the point of being
Speaker 1: non existence.
Speaker 2: Oleary joined me to explain the report, the research behind it,
Speaker 2: and what it means for the region and for other
Speaker 2: oil and gas regions. That conversation coming up right after
Speaker 2: this quick breaking I'd love to have you just kind
Speaker 2: of give people a little bit of the lay of
Speaker 2: the land. You know, what is this report that you
Speaker 2: just wrote and what were the key findings from it?
Speaker 1: Yeah, the report was an analysis of the economic impacts
Speaker 1: of the natural gas fracking boom in Appalachia on particularly
Speaker 1: the counties in the region, the twenty two counties in
Speaker 1: the region from which over ninety percent of the gas
Speaker 1: is being produced. Because there have, as anyone who's paid attention,
Speaker 1: for instance, in the recent presidential campaign knows a number
Speaker 1: of claims about a huge number of jobs associated with fracking,
Speaker 1: and so we went in specifically for the purpose to see,
Speaker 1: in fact, how many jobs has fracking created and what
Speaker 1: other economic benefits has fracking helped produce in those counties,
Speaker 1: and what the report discovered. What we found was that
Speaker 1: despite an immense increase in economic output is measured by GDP,
Speaker 1: which was roughly three times the rate of growth in
Speaker 1: the American economy as a whole, despite that immense spike
Speaker 1: in productivity, the measures of local economic prosperity, starting with jobs,
Speaker 1: also personal income, and finally population were underwhelming to the
Speaker 1: point of being non existence. And so the conclusion the
Speaker 1: report came to was that there's virtually no correlation between
Speaker 1: economic growth as driven by the natural gas industry and
Speaker 1: actual prosperity positive economic outcomes on the ground. And yes,
Speaker 1: that has stirred up quite a bit of controversy in
Speaker 1: the region.
Speaker 2: That's super interesting. The big cell for fracking forever has
Speaker 2: been this idea that the jobs it creates outweighs the
Speaker 2: impacts that it might have on the environment, or on water,
Speaker 2: or on communities and things like that. What are you
Speaker 2: hearing from, especially the people who have been pushing that
Speaker 2: idea both kind of you know, oil and gas executives
Speaker 2: and politicians in some states.
Speaker 1: Well, when they're not calling me names. Basically, the reactions
Speaker 1: so far, you know, have been pretty fervent. A couple
Speaker 1: of congressmen have issued press releases and others basically attempting
Speaker 1: to refute the findings of the study. The problem is
Speaker 1: that none of them yet have actually contested any of
Speaker 1: the quantitative findings in the study. Instead, what they've done
Speaker 1: is point to other statistics in an effort to basically
Speaker 1: offset what the study found. And so, for instance, there
Speaker 1: are probably the three statistics that they point to most
Speaker 1: often are that the unemployment rate in much of the
Speaker 1: region that we've been talking about has declined significantly in
Speaker 1: the last decade. They also point to the level of
Speaker 1: investment that the fracking industry has made in the region,
Speaker 1: the billions of dollars of investment. And finally, they point
Speaker 1: to what they say is the total number of jobs
Speaker 1: provided in the states of Ohio, Pennsylvania, and West Virginia,
Speaker 1: those who are both jobs that are directly attributable to
Speaker 1: the industry and also indirect and induced jobs, which they
Speaker 1: say in those states number in the hundreds of thousands. That, however,
Speaker 1: has been even before our report, a subject of considerable
Speaker 1: contention in the area for quite some time. The problem
Speaker 1: with the statistics that they cite, in addition to the
Speaker 1: pre existing dispute about the total number of jobs, is
Speaker 1: that the unemployment rate figures that they cite, and also
Speaker 1: the investment dollar figures that they cite, are immensely misleading.
Speaker 1: In a sense, you really shouldn't have needed this report
Speaker 1: to understand that there is no huge boom in jobs
Speaker 1: or economic revival going on in northeastern Pennsylvania or in
Speaker 1: the greater Ohio Valley, because all you have to do
Speaker 1: is walk through the downtowns and you see it. The
Speaker 1: downtowns there are greatly reduced from what they were, certainly
Speaker 1: at the time that I was growing up years ago.
Speaker 1: And it's really sad to see for those of us
Speaker 1: who are from the area and who have hopes that
Speaker 1: the area can be revived and can prosper again. And
Speaker 1: I despair that so many policymakers and leaders in the
Speaker 1: area are continuing to go down the line of pursuing
Speaker 1: the petrochemical industry and possible fuel industries as means to
Speaker 1: get there.
Speaker 2: Yeah, I wanted to ask you about the petrochemical build out.
Speaker 2: I saw that that release today about the fact that,
Speaker 2: you know, one of the major companies looking at building
Speaker 2: an ethane cracker in this region is delaying once again,
Speaker 2: and you know, talking about needing to make it makes
Speaker 2: sense economically. But I feel like you're also seeing this
Speaker 2: repeat right of the same kind of overblown jobs numbers thing,
Speaker 2: when I don't know, it seems to me that they
Speaker 2: often include temporary jobs in that and not and are
Speaker 2: misleading about how many permanent jobs any of these things create.
Speaker 1: Well, and that's why I mean, one of the points
Speaker 1: that I'm making is that the report I said in
Speaker 1: an interview that there's not much math going on here,
Speaker 1: which is a statement for which I've since been dinged
Speaker 1: by those who won't approve of the report.
Speaker 2: But I like to just say the math math in Yeah.
Speaker 1: But the point that I was trying to make was
Speaker 1: that the report that we issued is not the product
Speaker 1: of an inferential model. We aren't predicting, you know, we
Speaker 1: aren't using statistical techniques to predict what has happened or
Speaker 1: may happen. We literally just went to the numbers as
Speaker 1: reported to the quarterly senses of employment and wages. These
Speaker 1: are the numbers. And for that reason, it makes the
Speaker 1: report pretty difficult to criticize because there aren't any assumptions
Speaker 1: being made. There aren't any inferences being made. It's simply
Speaker 1: reporting the facts. Now, the you know, the question the
Speaker 1: challenge for the industry is, Okay, well, how do we
Speaker 1: how do we counter that? And so, for instance, you know,
Speaker 1: they have been saying they've pointed to the unemployment rate
Speaker 1: in particular, which has in fact gone down, And in
Speaker 1: pointing to the unemployment rate, they usually start with the
Speaker 1: year twenty and ten, which is a couple years after
Speaker 1: the fracking booms started in the region, at least in
Speaker 1: most parts of the region. But it also happens to
Speaker 1: be the bottom of the Great Recession in terms of
Speaker 1: employment and the unemployment rate in the US nationally, and
Speaker 1: so that, you know, puts them somewhat at an advantage
Speaker 1: with that number. But there's a more insidious thing that
Speaker 1: they're doing and citing that number, which is that there
Speaker 1: are two ways that you can make your unemployment rate
Speaker 1: go down. There's the good way, and that is you
Speaker 1: can add more jobs to your economy. But there's also
Speaker 1: a bad way, and that is you can reduce the denominator,
Speaker 1: you can get rid of workers, can lose workers from
Speaker 1: your economy even faster than you lose jobs, in which
Speaker 1: case your unemployment rate will go down as well. And
Speaker 1: that the latter is what has happened in this region.
Speaker 1: And so even though they do have a declining unemployment rate,
Speaker 1: it's not because they've added jobs. It's because they've lost workers.
Speaker 2: What does that mean when you say they've lost workers.
Speaker 1: People have moved out of the region or dropped out
Speaker 1: of the labor pool. When the unemployment rate, you know,
Speaker 1: when we hear the unemployment rate on a monthly basis
Speaker 1: announced from the Bureau of Labor Statistics. The unemployment rate
Speaker 1: is literally the number of people who are in the
Speaker 1: job market and without a job, divided by the total
Speaker 1: number of people in the job market who The people
Speaker 1: who are excluded from that are people who are not
Speaker 1: looking for jobs. And that's why occasionally you'll hear reports
Speaker 1: about the workforce shrinking or declining, and in this case,
Speaker 1: we're talking about an area in which the workforce has
Speaker 1: shrunk even faster than the number of jobs has So
Speaker 1: it's really a case of addition by subtraction.
Speaker 2: What kind of positive attention have you gotten?
Speaker 1: Well, positive attention, and there has been quite a lot,
Speaker 1: because I don't know that it comes through to folks
Speaker 1: who live outside the region, but it would be difficult
Speaker 1: to exaggerate just how ambivalent people in the region are
Speaker 1: about fracking and frankly, how opposed to it many of
Speaker 1: them are. And from that sector, we're getting a lot
Speaker 1: of people who are basically responding with thank god, I
Speaker 1: knew it, and I'm glad someone is finally saying it,
Speaker 1: because as I said before, if you live in the region,
Speaker 1: you only have to walk through the downtowns to see
Speaker 1: what I'm saying, whether it's you know, Steubenville, Ohio, Balero, Ohio,
Speaker 1: yel In West Virginia, Waynesburg, Pennsylvania, all of those downtowns
Speaker 1: are hollowed out shells of what they once were, and
Speaker 1: people know that, and so for them, they at least
Speaker 1: feel validated by this because there is another hope out there,
Speaker 1: and the hope is that you know, policymakers, political leaders
Speaker 1: in the area well hopefully begin to recognize that the
Speaker 1: fossil fuel industry is a pretty lousy foundation upon which
Speaker 1: to try to build economic growth and prosperity, and that
Speaker 1: this area, above perhaps all areas in the country, desperately
Speaker 1: needs to turn its attention to the energy transition and
Speaker 1: to the opportunities that are offered by the transition, which
Speaker 1: are considerable.
Speaker 2: Yeah, could you talk about that a little bit about
Speaker 2: you know, maybe some sectors that are potential job creators
Speaker 2: that get a lot less attention for.
Speaker 1: So it might help to understand a little bit about
Speaker 1: why all the money spent to pump all of the
Speaker 1: gas and all of the revenue that's been generated from
Speaker 1: the sale of that gas, why so little of that
Speaker 1: money has actually hit the ground locally and entery local economies.
Speaker 1: Because then we can contrast that with energy transition related
Speaker 1: opportunities and understand I think a little better about why
Speaker 1: there in fact are better and more promising and also
Speaker 1: cleaner opportunities to get out there. Yeah, because you know
Speaker 1: the real mystery. I mean, first we have to kind
Speaker 1: of step back and say, well, wait, you know, did
Speaker 1: the gas get pumped? Right? I mean the ten years
Speaker 1: ago there were economic impact studies from the American Petroleum
Speaker 1: and Institute and others saying that this is going to
Speaker 1: create and I'm not exaggerating when I say this, this
Speaker 1: is going to create in the states of Ohio, Pennsylvania,
Speaker 1: and West for Rginia somewhere in the neighborhood of four
Speaker 1: hundred and fifty thousand new jobs. I mean, that's an
Speaker 1: immense number. And the irony is that the amount of
Speaker 1: natural gas that has been produced in the period in
Speaker 1: the ten years since those studies is actually even greater
Speaker 1: than the studies themselves assumed, which means that, if anything,
Speaker 1: the number of jobs and the level of economic activity
Speaker 1: should have been greater than were projected in those studies.
Speaker 1: And so the point is that the gas got produced,
Speaker 1: the money was invested, The industry came to Appalachia, it
Speaker 1: drilled thousands and thousands of wells, it produced an immense
Speaker 1: amount of gas that's now almost forty percent of all
Speaker 1: the natural gas produced in the United States, and that
Speaker 1: gas got sold. And so there's a lot of money
Speaker 1: going on here, literally tens of billions of dollars. And
Speaker 1: so the real question is, since the money happened, why
Speaker 1: didn't it hit the ground at least locally in these economies?
Speaker 1: Where did the money go? And so we haven't quantified
Speaker 1: this yet, but we know having gone through at least
Speaker 1: what the leakage or potential leakage points are, both from
Speaker 1: the front end of the process when we're talking about
Speaker 1: companies investing in the region, going through to the back
Speaker 1: end when the gas is actually pumped and sold. And
Speaker 1: so what we see on the front end when companies,
Speaker 1: you know, when an executive shows up in a county
Speaker 1: commissioner's office and says, hey, I want to invest a
Speaker 1: billion dollars in your county, to which you know, any
Speaker 1: rational county commissioner who has been through three decades of
Speaker 1: economic decline is probably going to respond with gee, tell
Speaker 1: me how I can help you. And so what happens
Speaker 1: is that drilling rigs come in and crews start sinking
Speaker 1: wells throughout the area, and that is all money that
Speaker 1: is invested in the area in a sense. And in
Speaker 1: addition to that, processing plants get built and other forms
Speaker 1: of infrastructure get built, and that's all characterized at least
Speaker 1: as investment in the area that adds to GDP. The
Speaker 1: problem with it is that much of the investment actually
Speaker 1: goes to suppliers and to service providers and to workers
Speaker 1: who are from outside the region. And so, for instance,
Speaker 1: many of the crews that came into the region came
Speaker 1: up from the Gulf Coast in the Southwest, where many
Speaker 1: drilling companies are located, because there isn't a heritage of
Speaker 1: fracking or drilling in the Northeast, and so many of
Speaker 1: them brought in lots of workers from out of state
Speaker 1: and outside the region. The second thing is that of
Speaker 1: course there are many you know, they need raw materials,
Speaker 1: they need equipment and parts to do all of this stuff.
Speaker 3: Well.
Speaker 1: Again, similarly, there is an entire ecosystem in the Southwest,
Speaker 1: in states like Texas, Louisiana, and Oklahoma of companies that
Speaker 1: provide support services to drilling, and so again they relied
Speaker 1: heavily on those services to come into the region and
Speaker 1: do the work that needed to be done. And you
Speaker 1: can make the same observation with respect to professional services,
Speaker 1: whether it's you know, finance, real estate, insurance. In other words,
Speaker 1: there's a great deal on the front end that ostensibly
Speaker 1: was investment quote unquote in the region or in the county,
Speaker 1: which in fact was the acquisition of services from sources
Speaker 1: that were far outside the county, and so that portion
Speaker 1: of them money would never have hit locally. But then
Speaker 1: even when you kick through to the backside of this, Okay,
Speaker 1: we've sunk the well and we're now producing gas and
Speaker 1: we're going out and selling it in the marketplace. Well,
Speaker 1: you know, part of the promise of economic prosperity was
Speaker 1: based on the notion that there were going to be
Speaker 1: a lot of property owners in the region who were
Speaker 1: going to get quite wealthy as a result of royalties
Speaker 1: and lease payments from the companies for the gas that's produced.
Speaker 1: And that between you know, that income on the backside
Speaker 1: and lots of new workers having jobs and money to
Speaker 1: spend locally, that it was going to create this immense
Speaker 1: surge in employment in the region as those dollars filtered
Speaker 1: their way through the economy and the multiplier effect kicked in.
Speaker 1: The problem was on the backside, on the revenue side.
Speaker 1: That first of all, the price of gas that was
Speaker 1: anticipated back in two thousand and nine and twenty ten,
Speaker 1: even after the fracking boom took place, was never expected
Speaker 1: to fall below about four and a half dollars per
Speaker 1: million BTUs, And I'm quoting now, by the way, from
Speaker 1: the Energy Information Administration, And at that time the EIA
Speaker 1: expected that after kind of bottoming out at about four fifty,
Speaker 1: gas would prices by the end of the decade or
Speaker 1: now essentially, would generally return to anywhere between about six
Speaker 1: and seven and a half dollars per million BTUs. Well,
Speaker 1: the problem, of course, is that that's not what happened.
Speaker 1: The price of gas dropped to at times below two
Speaker 1: dollars and have never recovered consistently to more than the
Speaker 1: upper twos, sometimes hitting three dollars, which is where we
Speaker 1: are about right now. In other words, words, the assumption
Speaker 1: of revenue coming in from the sale of gas was
Speaker 1: basically at least twice what the actual revenue figures were,
Speaker 1: so you kind of cut that big nut, that big
Speaker 1: economic uh, you know, input of energy into the economy
Speaker 1: by half, right off the top. But then another a
Speaker 1: bunch of other factors kick in. The first is that
Speaker 1: a lot of property, it turns out on which wells
Speaker 1: are sunk, isn't actually owned by local people. In many cases,
Speaker 1: it's owned by companies corporations that may have a significant
Speaker 1: local presence or not. And sometimes you know, the property
Speaker 1: is owned by individuals from out who live outside the region,
Speaker 1: and so much of that money does not enter the
Speaker 1: local economy. And then on top of that, you also
Speaker 1: run into another interesting issue, which is that for those
Speaker 1: people who do live in the region and who do
Speaker 1: own the property and who do receive royalties, many of
Speaker 1: them don't spend a lot of that money. And so,
Speaker 1: you know, starting with the fact that the price of
Speaker 1: gas is only about half or less than what it
Speaker 1: was originally expected to be, and then you look at
Speaker 1: those other leakage points, it's frankly quite likely that the
Speaker 1: actual amount of money entering local economies was only about
Speaker 1: ten to perhaps twenty percent of what it was anticipated
Speaker 1: to be when the economic impact studies were done. There's
Speaker 1: almost no downstream effect as a result of this economically,
Speaker 1: and that's important because the other thing we know is
Speaker 1: that the number of jobs that the industry was expected
Speaker 1: to create directly never got as large as it was
Speaker 1: supposed to. And moreover, many of the jobs that were
Speaker 1: created were taken by out of state workers. And so
Speaker 1: when you put all of those factors together, what you
Speaker 1: come up with as a scenario in which, yes, it
Speaker 1: is actually understandable. There's not really a mystery about how
Speaker 1: literally tens of billions of dollars seems to have just
Speaker 1: evaporated from the economy. There actually are rational explanations for
Speaker 1: how it could have happened. There are profound structural reasons
Speaker 1: why this particular extractive industry, and for that matter, other
Speaker 1: extractive industries, are really lousy platforms for economic revival and
Speaker 1: job creation. And it starts frankly with the fact that
Speaker 1: even when you look at Bureau of Labor Statistics numbers,
Speaker 1: when you look specifically at the mining sector generally, which
Speaker 1: includes oil and natural gas extraction, it's only about twenty
Speaker 1: two cents of every dollar in GDP that it creates
Speaker 1: that is actually allocated to labor, to wages and salaries,
Speaker 1: and that's an remarkably low figure compared to other industries
Speaker 1: like construction, for instance, that number seventy five percent. Most
Speaker 1: other industries are somewhere in the forty to sixty percent range.
Speaker 1: And so if you had to pick an industry upon
Speaker 1: which you know, to try to build a job rich economy,
Speaker 1: this would be one of the worst ones that you
Speaker 1: could pick, even right out the gate. And then on
Speaker 1: top of that you add in all of those other
Speaker 1: factors that I just went through. And so that's the
Speaker 1: reason why we say there are other, better, more sustainable
Speaker 1: choices out there, because when you look at many of
Speaker 1: the energy transition industries that are out there, you know,
Speaker 1: which include not just renewable energy like wind and solar power,
Speaker 1: but also, and very importantly for this region, energy efficiency.
Speaker 1: We're talking about industries that not only have our much
Speaker 1: more labor intensive and less capital intensive, but we're also
Speaker 1: talking about businesses that in which the suppliers are local.
Speaker 1: I mean literally, if you talk about, Okay, we're going
Speaker 1: to do a great energy efficiency project, We're going to
Speaker 1: go in and retro fit you know, thousands of houses
Speaker 1: or buildings in the region, and in this particular region,
Speaker 1: there are many, many thousands of older buildings and houses
Speaker 1: that can benefit from retrofitting. One of the beauties of
Speaker 1: energy efficiency is that these are shovel ready projects. You
Speaker 1: can go in and start insulating and replacing lighting and
Speaker 1: appliances tomorrow. It doesn't require a lot of planning. It
Speaker 1: doesn't require a lot of stuff that we hear about
Speaker 1: when we're talking about, you know, how do we invest
Speaker 1: stimulus dollars, we'll find shovel ready projects. Energy efficiency is
Speaker 1: shovel ready all the time. The second thing is that
Speaker 1: energy efficiency, and for that matter, distributed solar and other things,
Speaker 1: these are services that are provided by predominantly local suppliers.
Speaker 1: You know, we have local insulators, we have local home
Speaker 1: remodeling firms, we have local firms that do windows and
Speaker 1: door replacements. And so one of the other beneficial effects
Speaker 1: of pursuing the transition economy and energy is that more
Speaker 1: of the dollars that are spent actually stay in the community,
Speaker 1: as opposed to dollars that are spent on you know,
Speaker 1: paying your electric bill, which probably goes to some far
Speaker 1: away utility. And so there really is you know, there's
Speaker 1: kind of a triple benefit here.
Speaker 2: What do you think about the I've heard this floated
Speaker 2: a few times, this idea that you could employ people,
Speaker 2: you know, capping and remediating wells, especially as more and
Speaker 2: more of the kind of early fracking companies go bankrupt
Speaker 2: or you know, just decide that these wells are not
Speaker 2: worth keeping productive anymore.
Speaker 1: We, yeah, actually are looking at what the employment opportunity
Speaker 1: would be based upon the number of abandoned and norphand
Speaker 1: wells in the region to pursue that. And by the way,
Speaker 1: we're also again talking about an area that is historically
Speaker 1: a coal producing region, and there is also my coal
Speaker 1: mine remediation opportunity as well. So yes, it is potentially
Speaker 1: a great generator of jobs in the region. And one
Speaker 1: of the things that's most appealing about it is it's
Speaker 1: the kind These are the kinds of jobs for which
Speaker 1: people who currently work in the fossil fuel industry and
Speaker 1: who might otherwise and who might be vulnerable to losing
Speaker 1: their current jobs and livelihood as we transition to renewable
Speaker 1: resources of energy. These would very likely be opportunities for
Speaker 1: them to take on a new form of employment and
Speaker 1: they could be paid as well for doing that. And frankly,
Speaker 1: given the number of wells as there are out there,
Speaker 1: these are jobs that very likely would continue for years.
Speaker 2: Yeah.
Speaker 1: Yeah, that's one of the most appealing things of this
Speaker 1: because you know, we're talking about a region and I mean,
Speaker 1: you know, I'm a native West Virginia, right, I was
Speaker 1: born in nineteen fifty six. West Virginia's population in nineteen
Speaker 1: fifty six was bigger then than it is now. Zero
Speaker 1: population growth in the last sixty years, and that's because
Speaker 1: for lack of opportunity, for lack of economic opportunity, many
Speaker 1: people move away, and so jobs have always been an
Speaker 1: issue in West Virginia. And one of the things that
Speaker 1: makes the energy transition, you know, so exciting, especially to
Speaker 1: someone like me who cares deeply about you know, my
Speaker 1: home and my people, is that it does offer opportunity
Speaker 1: for revival in the region.
Speaker 2: I did a story recently around, like kind of around
Speaker 2: the jobs thing across the fossil fuel industry in general,
Speaker 2: and the fact that I feel like almost I don't know,
Speaker 2: almost every story I read about, you know, fossil fuel jobs,
Speaker 2: people neglect to mention that the industry was shedding jobs
Speaker 2: like crazy because of automation, you know, over the last
Speaker 2: five years too, So I wonder what you've seen on
Speaker 2: that front, what impact that has all had.
Speaker 1: Okay, this is where the West Virginian in me is
Speaker 1: going to come out, because you know my town. You know,
Speaker 1: I lived on top of a coal mine. My town
Speaker 1: is dying, and up until recently, it was dying not
Speaker 1: because coal wasn't being produced. It was exactly what you
Speaker 1: just talked about, Amy, it was automation. Back when I
Speaker 1: was born in West Virginia, the coal industry employed directly
Speaker 1: about one hundred and forty thousand people, which is a
Speaker 1: remarkable number because the state only has one point eight
Speaker 1: million residents. I mean, you're talking about an immensely pervasive
Speaker 1: industry there. And the amount of coal that was being
Speaker 1: produced at that time stayed more or less constant until
Speaker 1: the beginning of this last decade. And it's just been
Speaker 1: really in the last eight years that coal production has
Speaker 1: started to significantly decline in the United States. But what
Speaker 1: happened during that time is, and I'm not exaggerating, is
Speaker 1: that in the coal industry, ninety percent of the jobs
Speaker 1: were lost. In West Virginia. We went from one hundred
Speaker 1: and forty thousand workers down to about fifteen thousand workers
Speaker 1: before the volume of coal being produced actually started to
Speaker 1: go into decline. And that effect was entirely attributable to automation,
Speaker 1: to the advent of strip mining in a large way,
Speaker 1: to mountaintop removal and other forms of mining that are
Speaker 1: less labor intensive than underground mining, which was West Virginia's heritage.
Speaker 1: And so the devastation, economic devastation has been happening for
Speaker 1: a long long time in this region. And you know,
Speaker 1: even when you talk about and that's one of the reasons,
Speaker 1: by the way, that when I'm going back to what
Speaker 1: I said before about natural gas production being such a
Speaker 1: labor intensive business, or rather a capital intensive business, the
Speaker 1: flip side of that is it's not very labor intensive.
Speaker 1: It actually doesn't provide much in the way of jobs.
Speaker 1: The ones it does provide, yeah, they're well paying, absolutely true,
Speaker 1: but it doesn't help it doesn't provide many of them.
Speaker 1: And moreover, and this is another issue we frankly should
Speaker 1: talk about, is that because of what economists call the
Speaker 1: externalities associated yeah with fossil fuel businesses, local pollution, a
Speaker 1: variety of issues, it appears and again this is also
Speaker 1: hinted at at least in the results that we found,
Speaker 1: it appears that natural gas may in some respects actually
Speaker 1: discourage other forms of economic development.
Speaker 2: This is weird tendency, I think sometimes for people to
Speaker 2: talk about environmental impacts as things that don't also impact
Speaker 2: the economy.
Speaker 1: One of the things that we're least good at in
Speaker 1: economics is in incorporating these these effects that we're calling externalities.
Speaker 1: They're only externalities in the sense that neither the buyer
Speaker 1: nor the seller pays for them, but somebody does. And
Speaker 1: one of our great weaknesses is that we don't do
Speaker 1: a great job of incorporating those externalities into our economic modeling,
Speaker 1: into the economic impact studies. And so if you go
Speaker 1: back again and you look at the American Petroleum Institute
Speaker 1: studies from ten years ago, or the American Chemistry Council
Speaker 1: studies on petrochemicals, now, you won't see any recognition of
Speaker 1: any externalities associated with that. They're simply not taken into account.
Speaker 1: And even when they are, frankly, usually what people do
Speaker 1: is plug in some number, like, you know, fifty dollars
Speaker 1: per ton of carbon as a social cost of carbon factor,
Speaker 1: which is, you know, is better than nothing. But even
Speaker 1: that does not get at the issues that you just
Speaker 1: talked about, the noise pollution, the water pollution, the local
Speaker 1: particulate air pollution, that that does not get covered in
Speaker 1: that fifty dollars you know, per ton of carbon, social
Speaker 1: cost of carbon factor. And in fact, it really does
Speaker 1: seem as though, whether you're talking about coal mining or
Speaker 1: also natural gas drilling, there's at least prime efacia reason
Speaker 1: to believe that they could have depressive effects on other
Speaker 1: forms of economic development.
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