From Post Gazette's site:
Scope of job creation a matter of conjecture
Some people debate whether Marcellus Shale development is really creating all the jobs its backers claim it is -- as many as 100,000 last year, by the industry's count.
Not James Ladlee. Not when it comes to direct jobs. He has seen them, surveyed them, counted them.
"I think companies are hiring more and more," said Mr. Ladlee, director of Penn State Cooperative Extension's Clinton County office. "And it's not just on drilling rigs or fracking crews, steel hauling and cutting down trees."
Over the last two years, he and a colleague, Larry Michael, executive director of workforce and economic development at Pennsylvania College of Technology in Williamsport, studied the creation of Marcellus Shale jobs.
They concede that calculating the spinoff jobs created by the multiplier effect of, say, so many Marcellus Shale rig workers buying lunch at a local diner, requiring the diner to hire more employees, is hard to gauge.
But they don't quibble when it comes to the number of direct jobs in the field.
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"Most of the jobs that are out there are in the development of the well pad itself. That is clear," Mr. Michael said.
Several studies, including theirs, have found roughly the same statistic: Statewide, preparing, drilling and beginning the production of a Marcellus Shale well will take the equivalent of 11 to 13 full-time jobs per well.
That's not to say that only a dozen or so people do all the work.
Instead, their study found that, on average, it takes 410 individuals, across 150 different job types -- from roustabout and truck driver, to roughneck and mud logger -- to get a well up and running. But nearly all of the workers are only there for a few days or weeks at a time. Adding up the hours, it's equivalent to 11 to 13 people working on one well site for an entire year.
Multiply that number by the 1,440 wells drilled in the state in 2010, and it comes out to about 15,000 to 17,000 direct jobs from well site development alone. That's roughly double the work on the 795 wells drilled in 2009. There already have been 195 wells drilled in the state this year as of Feb. 11.
Three energy companies of varying size -- Range Resources, CNX Gas, and Rice Energy -- provided figures about developing a well site that paint a portrait of the jobs that are growing in the industry.
The first stage is site construction, which means building the roads that lead to and from the well site and the well pad itself. This is a labor-intensive, heavy-equipment operation that can take up to two months and cost up to $1 million, depending on the terrain, and employing 20 to 50 people from four to 10 subcontractors at any one time.
The second stage is drilling, which starts with a specialized team that moves in to build the "top hole" rigs -- smaller rigs used to drill the vertical hole straight down. It typically takes two weeks to drill each vertical well on a pad, and most companies are trying to drill at least four wells per pad.
These rigs, which the energy companies don't own, can cost about $15,000 a day to rent. It can take eight to 10 subcontractors, employing 30 to 50 people total, to build the rig, drill the hole, and take the rig back down.
The smaller rig drills to the "kickoff point," where a much larger, horizontal rig is brought in to drill the horizontal portion of the hole into the Marcellus Shale. These rigs are so expensive to rent -- about $50,000 a day -- that they are a major controlling factor in well site development across a wide region.
"We drill 365 [days a year] 24/7 because of the cost of the drilling rig," said Tony Gaudlip, who helps oversee drilling operations for Range Resources in Washington County. "You can't afford to have it sitting idle."
Depending on how far out the horizontal line is going to go -- 3,000 feet is typical, but some have been drilling much farther, 6,000 feet or more -- it can take two weeks or more per well. This also can employ eight to 10 subcontractors, with 30 to 50 people on site on any given day.
Overall, the second stage of drilling the well, both vertically and horizontally, can cost $1 million to $3 million per well site.
The third stage -- hydraulic fracturing and completing the well -- is by far the most technically difficult and labor intensive. This is where, after the shale is initially "perforated" with a small explosion, up to 4 million gallons of water, sand and chemicals are injected into each well to further open up and keep open the perforations, freeing up the natural gas contained in the shale.
It can take up to two weeks to prepare a site for fracking, and then three to four days per well to do the fracking itself. During that time, 15 to 25 subcontractors may be on site on any given day, employing 150 to 350 people, costing $2 million to $4 million per well site.
The final, least-expensive stage is production, when "flowback" from the wells is done, allowing the fracturing fluid -- sand, water and chemicals -- to come back out of the well before the gas itself begins to run. This can take another week and involve 10 to 20 employees from two to four companies.
Based on what the energy companies describe, the whole process can take four to eight months. The energy company, primarily through subcontractors, will employ 240 to 450 employees working for 37 to 59 contractors. And depending on how many wells are drilled per pad, it can cost $4 million to $9 million each.
A lingering question that the industry struggles to answer is how many of these jobs and how much of the money stay with Pennsylvanians spending it here.
Every company has a different take -- 40 percent to 90 percent are some estimates. But Mr. Michaels and Mr. Ladlee hope to add some detail to that with a study they're doing now and hope to release in the spring.
For now, Mr. Michaels said, it is still clear that "as we build more wells, they'll employ more people."