1. Marcellus Shale: Economic Impact of this Industry Sector Updated Sue Mukherjee Director, Center for Workforce Information & Analysis Pennsylvania Department of Labor & Industry March 15, 2012

2. Sector Analysis of a ‘Growth Industry’ Six WIAs significantly impacted by a ‘growth sector’: Marcellus Shale 2

3. 3 Marcellus Shale Research (PADLI) DLI defined Marcellus Shale sector; identified 6 industries as core, 30 ancillary Examples of jobs in core: Roustabouts, Rotary Drill Operators, Service Unit Operators, Derrick Operators, Welders Examples of jobs in ancillary or supply chain are: Truck Drivers – Heavy and Tractor, Civil Engineers, Industrial Machinery Mechanics, Maintenance & Repair Workers, Construction & Building Inspectors Produced first report in Dec. 2010; began production of Shale Fast Facts April 2011 Italicized jobs have been identified as high priority by ShaleNET

4. 4 Impact of Marcellus Shale: Employment, Establishments Employment (2008Q2 to 2011Q2): Core, PA up 13,548 (131.2%); six WIAs up 7,097 (123.0%). All industries declined by -2.4% in PA in general. Ancillary, PA down 194 (-0.1%); six WIAs up 4,186 (9.0%) Establishments (2008Q2 to 2011Q2): Added more than 830 establishments (370 core, 460ancillary) 945 establishments in core industries as of 2011 Q2; increase of 64.3% from 3 years Wages (2010Q3 to 2010Q2): The average wage in core industries ($76,918) is $30,359 higher than statewide average ($46,559); average wage in ancillary industries ($63,155) is $16,596 higher New Hires (2008Q4 to 2011Q4): Statewide new hires in core increased by 193.9%; in ancillary increased by 40.4%; total statewide new hires decreased by 0.1%. For six WIAs, New Hires increased by 218.2% in the core and ancillary (745.1% core; 112.1% ancillary)

5. 5 Marcellus Shale Employment Growth for PA Graph shows consistent employment growth starting 2008 In just over three years, employment in Marcellus Shale core related industries has increased from about 9,500 to nearly 24,000

6. 6 2011 Q2 Initial PA Employment Data Highest volume increase in employment occurred in Support Activities for Oil & Gas Operations, increasing by nearly 5,700; largest percentage growth in Natural Gas Liquid Extraction - PA employment in this industry is now 5 times what it was in 2008 Q2 Oil & Gas Pipeline & Related Structures Construction experienced a gain of more than 3,000 additional employees since 2008 Q2; this is noteworthy, as the Great Recession severely impacted construction industry 2008 Q22011 Q2 Vol. Change 2008 Q2 to 2011 Q2 Pct. Change 2008 Q2 to 2011 Q2 Estab.Emp.Estab.Emp. 211111Crude Petroleum and Natural Gas Extraction1842,5302253,8751,34653.2% 211112Natural Gas Liquid Extraction149924481382385.9% 213111Drilling Oil and Gas Wells691,5601244,6013,041194.9% 213112Support Activities for Oil and Gas Operations1152,3943288,0695,675237.1% 237120 Oil and Gas Pipeline and Related Structures Construction 662,4111165,4803,070127.3% 486210Pipeline Transportation of Natural Gas1271,3311281,365352.6% Totals57510,32494523,87213,548131.2% Pennsylvania Marcellus Shale Core Related Industries

7. 7 2011 Q2 Initial Employment Growth: NT, Central, SW Corner

8. 8 2011 Q2 Initial Local Employment Data Northern Tier experienced largest employment growth over past 3 years in terms of both volume and percent; Central had second largest Southwest Corner experienced employment growth of nearly 1,700 2008 Q22011 Q2 Emp. Vol. Change 2008 Q2 to 2011 Q2 Emp. Pct. Change 2008 Q2 to 2011 Q2 WIAEstab.Emp.Estab.Emp. Northern Tier793542,0211,9282073.1% Southwest Corner43691932,3611,670241.7% Central8112521,8641,7521564.3% North Central1082,0741272,58851424.8% Tri-County1002,3331142,84150821.8% Westmoreland & Fayette27465401,190725155.9% Totals2935,76848012,8657,097123.0% Marcellus Shale Core Related Industries for Six WIA

9. 9 2011 Q2 Initial Local Employment Data Northern Tier experienced largest employment growth over past 3 years in terms of both volume and percent; Central had second largest Tri-County was the only WIA with significant drilling activity that had a negative employment change 2008 Q22011 Q2 Emp. Vol. Change 2008 Q2 to 2011 Q2 Emp. Pct. Change 2008 Q2 to 2011 Q2 WIAEstab.Emp.Estab.Emp. Northern Tier 2331,7623653,4331,67194.8% Southwest Corner 50010,51652111,2126966.6% Central 6119,72367511,1311,40814.5% North Central 4034,1624354,58642410.2% Tri-County 4819,4085159,176-232-2.5% Westmoreland & Fayette 54810,69857410,9172192.0% Totals 2,77646,2693,08550,4554,1869.0% Marcellus Shale Ancillary Related Industries for Six WIA

10. 10 Impact of Marcellus Shale: New Hires 12,625 new hires statewide in core and ancillary industries (2011 Q4), 14% higher than 2010 Q4 and 54% higher than 2008 Q4 New hires in core industries as a percentage of total new hires has been increasing steadily, from 0.09% in 2007 Q1 to 0.47% in 2011 Q4

11. 11 Impact of Marcellus Shale: Online Job Postings Local WIADec-2010Dec-2011Change Northern Tier647110.9% Southwest Corner719128.2% Central9617178.1% North Central405025.0% Tri-County3168119.4% Westmoreland & Fayette598137.3% Total36153247.4% In six WIAs where majority of Marcellus Shale drilling is occurring, online job posting activity has increased by 171 job postings; highest volume of job posting is in Central currently Tri-County has experienced largest percentage increase in job posting from a year ago, with over twice as many online job postings in December 2011 compared to December 2010 225 job postings in core in Dec. 2011 (56.3% increase), 2,672 in ancillary (30.9% increase); 2,897 job postings statewide Dec. 2011 in core and ancillary; 532 in six WIAs. Statewide job postings up by 47.4%

12. 12 Impact of Marcellus Shale: High Priority Occupations SOC Code SOC Title Average Annual Wage 13-1051Cost Estimators$60,120 17-2112Industrial Engineers$77,310 41-4011Sales Representatives, Scientific & Technical$87,120 43-3021Billing & Posting Clerks & Machine Operators$32,200 43-3031Bookkeeping, Accounting & Auditing Clerks$35,540 43-4051Customer Service Representatives$36,620 43-5061Production, Planning & Expediting Clerks$38,800 43-6014Secretaries$30,650 43-9061Office Clerks$28,760 47-1011 Supervisors - Construction Trades & Extraction Workers $64,630 47-2061Construction Laborers$33,290 47-2073Operating Engineers$43,740 47-2152Plumbers, Pipefitters & Steamfitters$52,450 49-1011Supervisors - Mechanics, Installers & Repairers$63,800 49-9041Industrial Machinery Mechanics$44,940 49-9042Maintenance & Repair Workers$36,390 49-9051Electrical Power-Line Installers & Repairers$58,220 49-9052Telecommunications Line Installers & Repairers$54,240 51-1011Supervisors - Production & Operating Workers$55,800 51-4121Welders, Cutters, Solderers & Brazers$36,250 51-9061 Inspectors, Testers, Sorters, Samplers & Weighers $36,540 53-1031 Supervisors - Transportation & Vehicle Operators $58,600 53-3032Truck Drivers, Heavy & Tractor-Trailer$41,360 53-7062Laborers & Freight, Stock & Material Movers$27,650 SOC Code SOC Title Average Annual Wage 17-2151Mining & Geological Engineers$64,010 17-3023Electrical & Electronic Engineering Technicians$54,040 17-3025Environmental Engineering Technicians$46,790 19-2042Geoscientists$67,860 19-4041Geological & Petroleum Technicians$49,700 45-4022Logging Equipment Operators$24,480 47-5011Derrick Operators, Oil & Gas$41,920 47-5012Rotary Drill Operators, Oil & Gas$41,550 47-5013Service Unit Operators, Oil, Gas & Mining$38,530 47-5071Roustabouts, Oil & Gas$30,490 49-3042Mobile Heavy Equipment Mechanics$44,850 51-4122Welding, Soldering & Brazing Machine Setters$37,250 53-7071 Gas Compressor & Gas Pumping Station Operators $51,620 53-7072Pump Operators$42,200 53-7073Wellhead Pumpers$37,010 Approved StatewideApproved Regionally Source: The Center for Workforce Information & Analysis

13. 13 Impact of Marcellus Shale: Occupational Projections Occupational Title Employment Average Annual Wage 2010 Estimated 2010 Projected 2012 Percent Change Rotary Drill Operators, Oil & Gas 1,446 2,67484.9%$41,550 Derrick Operators, Oil & Gas 121 22384.3%$41,920 Service Unit Operators, Oil, Gas, & Mining 1,213 2,18880.4%$38,530 Roustabouts, Oil & Gas 1,519 2,55768.3%$30,490 Pump Operators 706 1,13761.0%$42,200 Wellhead Pumpers 865 1,25044.5%$37,010 Petroleum Engineers 147 20438.8%$129,510 Helpers--Extraction Workers 1,047 1,43737.2%$31,210 Explosives Workers & Blasters 246 32532.1%$45,130 Geological & Petroleum Technicians 163 21431.3%$49,700 Earth Drillers 1,115 1,36822.7%$43,610 Riggers 331 37513.3%$43,380 The 12 occupations projected to grow fastest from 2010 to 2012 based on percent change in employment are all occupations that can be found in the Marcellus Shale related industries

14. 14 Impact of Marcellus Shale: Recap For Six WIAs with Significant Marcellus Shale Activity Employment, Core Increase of 123.0 percent (2008Q2 to 2011Q2) Employment, Ancillary Increase of 9.0 percent (2008Q2 to 2011Q2) New HiresIncrease of 218 percent (2008Q4 to 2011Q4) Job PostingsIncrease of 47.4 percent (Dec ‘10 to Dec ‘11)

15. 15 Impact of Marcellus Shale: Recap For PA in Marcellus Shale Employment, CoreIncrease of 131.2 percent (2008Q2 to 2011Q2) Employment, Ancillary Decrease of 0.1 percent (2008Q2 to 2011Q2) New HiresIncrease of 54 percent (2008Q4 to 2011Q4) Job PostingsIncrease of 32.6 percent (Dec ‘10 to Dec ‘11)

16. 16 Impact of Marcellus Shale: Recap For PA in All Industries EmploymentDecrease of 2.4 percent (2008Q2 to 2011Q2) Employment, GreenDecrease of 9.1 percent (2008Q2 to 2011Q2) New HiresDecrease of 0.1 percent (2008Q4 to 2011Q4) Job PostingsIncrease of 14.3 percent (Dec ‘10 to Dec ‘11) Number of Individuals Unemployed Decrease of 12.8 percent (Mar ’10 to Jan ‘12)

17. 17 Thank You! Sue Mukherjee Center for Workforce Information & Analysis smukherjee@pa.gov (717) 772-1386 Customer Response Team workforceinfo@pa.gov (717) 787-6466 1 (877) 493-3282 Website www.paworkstats.state.pa.us