Fracking Jobs Prove Elusive for Coal Miners Looking to Switch
(Bloomberg) -- Robert Dennis has mined coal in West Virginia for 10 years but a recent evening found him in a classroom at his local community college. He came to learn about opportunities in fracking, a drilling technique used to produce natural gas — the very fuel that is threatening coal’s future.
“I know mining inside and out,” said Dennis, a 41-year-old shift foreman from Wetzel County, adjusting the black Adidas cap on his head. But now, “I just want more doors to be open.”
He has earned a certificate in chemical and industrial operations, diligently searched job boards and filled out applications. So far, no luck.
Dennis is learning a hard lesson of fracking: While it has created a bonanza of jobs, displaced coal miners and their communities are sometimes left out of the boom. That’s because many of the jobs require highly technical skills and are often going to experienced workers brought in from out of state who then move on to the next job without sinking roots.
“There are positive employment and wage effects,” said Timothy M. Komarek, a professor of economics at Old Dominion University in Virginia. But, he said, they are “not as big as first thought when the boom first started.”
Komarek concluded in a 2016 study that total employment in a county rises by 7 percent and wages by 11 percent in the three years after fracking comes — but the gains then taper off.
When the “shale gale” hits, hotels, trailer parks and restaurants get a boost. And some landowners make money for letting drillers extract oil and gas from their property.
In that way, fracking has “created a lot of millionaires in West Virginia,” said Jeff Kessler, a former state senator from the state’s northern area that has both coal and natural gas. “But it has not created the employment opportunities” area residents had hoped for, he said. “The ongoing benefits are relatively minute compared to the amount of land under lease.”
That’s bad news for towns like Wetzel County’s New Martinsville where Dennis attended the community college session. While coal mines provide decades of steady work and sustain communities, a crew can frack a well in a month and leave behind automated machinery to recover the oil and gas.
The process, also known as hydraulic fracturing, involves injecting water and chemicals deep underground to break up rock and free trapped oil and gas.
It’s unlocked vast stores of previously unobtainable fossil fuel and spurred a renaissance in energy production in states that had once been coal bastions. Coal, oil and natural gas are formed from the same plant matter and other forms of prehistoric life and can be found in the same places.
But fracking has eroded the status of coal, which used to generate more than half the electricity in the U.S. but had slipped to just 30 percent last year. “If there was a War on Coal, it was really declared by natural gas,” said Robert Godby, an economist at the University of Wyoming.
While some miners are hoping President Donald Trump will rescue their industry — West Virginia gave Trump 69 percent of the vote in 2016, the greatest share of the total in at least a century and a half — others are eyeing gas as an alternative employment opportunity.
The U.S. Bureau of Labor Statistics doesn’t specifically count fracking jobs, but says there were more than 422,000 jobs directly associated with oil and gas extraction in the U.S. at the end of 2016. That has far eclipsed the number of jobs in underground coal mining: about 50,000 nationwide, down from 200,000 in the 1970s.
In West Virginia, there were 11,404 coal miners last year, about half the 23,000 who were working in 2011. There are about 6,000 working in oil and gas extraction.
To be sure, the fracking boom provided a much-needed economic boost in the years following the Great Recession. Fracking supported more than half a million jobs across the Marcellus Shale, an energy-rich geological formation that stretches from New York state to Virginia, according to a report commissioned by the American Petroleum Institute, a trade association. The group’s numbers exceed the Labor Department estimates because they include workers at natural gas distribution facilities, petroleum refineries, petroleum product wholesalers and gas stations.
And much as coal and the Ohio River once lured steel plants and manufacturers to the area, cheap natural gas may bring chemical and other manufacturers to areas near shale drilling. Residents of New Martinsville, for example, are rooting for an ethane processing facility that may be built on the site of an old coal plant nearby.
In North Dakota, for example, the fracking boom allowed it become the fastest-growing economy in the nation by 2014. Even now, it has one of the lowest unemployment rates in the nation at 2.3 percent. But a downturn in the oil market brought drilling to a crawl and slowed investment in training and education programs.
“The boom was so quick and dropped off so quickly afterwards and the bust came so quickly that they really didn’t get it done,” said William Caraher, an associate professor of history at the University of North Dakota, of the state’s education push.
Don Riggenbach is the president of the Chamber of Commerce in Wetzel County, where New Martinsville is located, and the owner of a tile and carpet installation company. He measures the economic effect of fracking in square feet of new flooring installed. So far, he says, something has been missing.
“In my business I need houses being built,” he said. “You’d think that because of the gas and oil business they’d be hiring people. They do, but they’re out-of-state workers ... They’re not putting down roots.”
Still, former miners who have made the transition to fracking, often with the assistance of government or industry-funded programs, say they are happy.
Robert Walker says he was shocked when he was laid off from his job at a Murray Energy Corp. coal mine in Marshall County in April 2015.
Flash forward a couple of years and Walker is working for The Williams Companies Inc., a company with extensive operations in the oil and gas field. He is making less money, down to $24 an hour from $30 when he was working in the mines. But he likes the work, and prefers his new coworkers. He says he is “a lot happier now.”
Curt Hippensteel, the director of the West Virginia Community College petroleum technology program, said miners have skills that transfer well to other trades, including safety training, welding and electrical work. Plus, miners are used to working long hours in austere conditions, which fits the profile of roustabout work quite nicely, he said.
But fracking, which requires the application of precise measurements of chemicals, sand and water applied under extreme pressure at specific times, requires its own set of unique skills.
And its job outlook is far from certain.
Technological improvements to fracking processes and practices have made the industry more efficient. In late 2016 and early 2017, more gas was produced using fewer workers in West Virginia than ever before.
Since 2014, gas production in the state has grown 50 percent while oil and gas employment has fallen from 9,000 to less than 6,000, according to West Virginia University Bureau of Business and Economic Forecasting.
The recent recovery in prices has spurred companies to begin exploring for gas again, which may mean more hiring soon, according to Brian Lego, a West Virginia University assistant professor of economic forecasting. “But the overall level won’t be a substantial amount,” he said.
Dennis, the coal miner looking for fracking work, hopes to gain a few years experience in the oil and gas fields near New Martinsville until his children finish school.
After that, he’s ready to give up on energy altogether and seek employment in North Carolina, where he feels there is more opportunity.
“What I want is a chance to move out of the area,” he said. “There’s more industry down there.”