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Article Artículo

Fracking Nonsense: The Job Myth of Gas Drilling

Natural gas companies are trying to sell fracking as the solution to all of the economic ills ailing this country.  Supposedly fracking can bring the economy out of its current stagnation by creating uncountable new jobs, without running up government deficits, and even save us from global warming in the process.  So how come local residents and environmentalists oppose fracking? The short answer is that fracking does not create local jobs, it lowers property values, and pollutes the water we drink and the air we breathe.

Hydraulic fracturing, or fracking for short, is drilling for gas buried more than a mile under ground in hard rock layers. In order to extract the gas, a toxic cocktail of chemicals is pumped deep into the ground to fracture the rock. In recent years, the state of Pennsylvania has embraced the fracking boom and more than 4,500 wells have been drilled there since 2007. The state of New York has taken a more prudent approach by implementing a moratorium until the environmental and economic effects have been evaluated. The New York Department of Environmental Conservation is currently seeking public comments on the issue (deadline January 11).

In an intensive lobbying campaign to influence a skeptical public’s opinions about fracking, the gas industry has commissioned a number of economic studies that find huge job gains from fracking. A recent study by the economic forecasting company IHS Global Insight Inc., paid for by the America’s Natural Gas Alliance, projects that fracking will create 1.1 million jobs in the United States by year 2020. However, a closer read of the study reveals that the analysis also projects that fracking will actually lead to widespread job losses in other sectors of the economy, and would result in slightly lower overall employment levels the following 10 years, compared to what it would be if fracking were restricted. In another study, commissioned by the Marcellus Shale Coalition, researchers with Penn State University estimated that gas drilling would support 216,000 jobs in Pennsylvania alone by 2015. The most recent data from the Bureau of Labor Statistics show employment in the oil and gas industry to be 4,144 in Pennsylvania.

Rather than trying to project what will happen in the future, one could look at what the employment impact has been from Pennsylvania’s love affair with fracking since 2007, using actual employment data readily available from the Bureau of Labor Statistics.

CEPR and Helene Jorgensen / January 08, 2012

Article Artículo

Contractor Accused of Waste in Katrina Reconstruction Lands USAID Contract in Haiti

In March 2010, the New Orleans inspector general found that a major contractor for the city’s recovery efforts, MWH Americas, had been overcharging the city. The Times-Picayune reported at the time:

The controversial engineering firm hired to manage New Orleans' massive rebuilding effort has been operating for more than two years under a dubiously awarded contract that has allowed it to overbill the city repeatedly even as the bricks-and-mortar recovery work it oversees has lagged, according to a draft report by the city's inspector general.

Now this same company accused of wrongdoing in New Orleans has landed a USAID contract for work in Haiti. And it's not the first time this has happened. MWH announced on December 21 that it had received a $2.8 million contract to conduct a feasibility study for port infrastructure in northern Haiti (the contract was signed on September 23). The company’s release goes on:

The $2.8 million contract will include a market demand and project finance structure study, economic feasibility analysis, and the preparation of a detailed technical study including geotechnical, environmental assessment, operational performance, water supply system, emergency response, access roads and institutional and regulatory assessment. The project is expected to be complete in May 2012.

The awarding of the contract to Colorado-based MWH, despite a record of waste and abuse, is consistent with other contracts awarded by USAID in the aftermath of the January 2010 earthquake. Overall, USAID has awarded over $300 million in contracts, with only 0.02 percent going directly to Haitian firms. The largest contractor is Chemonics, a company with a long record of waste and abuse in Afghanistan and which was criticized by the USAID inspector general last year for its work in Haiti. MWH Global, the parent company of MWH Americas, spent over $675,000 dollars on lobbying expenses in 2011, according to OpenSecrets.org, although it was below the $1.2 million spent in 2010.

Jake Johnston / January 04, 2012