In the last decade, Pennsylvania, West Virginia and Ohio produced a tsunami of natural gas that exceeded even the most optimistic projections. That wealth of gas was supposed to translate into newly thriving local economies.
According to a report released Wednesday by the Ohio River Valley Institute, the local renaissance never happened. Instead, counties that pumped out nearly all of the Appalachian region’s natural gas lagged on traditional measures of local prosperity: They had less personal income and job growth than the states as a whole and the nation over that time period, and their populations declined.
The new think tank advocates for the region to shift away from fossil fuel extraction to clean energy. It is a project of the Johnstown-based Community Foundation for the Alleghenies and has received funding from the Heinz Endowments.
Using data from the U.S. Bureau of Economic Analysis, the report looked at 22 counties in the three states between 2008 and 2019, a period when natural gas drilling in the Marcellus and Utica shales began, surged and subsided. In those years, the region went from being a marginal natural gas producer to one of the world’s largest. The 22 counties produced 90% of the states’ total gas output during the study period. Their gross domestic product — the value of the goods and services produced within their borders — grew by 60% over the decade — more than triple the national growth rate.
But the communities were not rewarded with proportionate growth in jobs, income or people, according to the report. Over the study period, jobs in the 22 counties at the heart of the shale boom grew by just 1.7%, compared to 10% nationally and nearly 4% in the three states. Personal income in the major shale counties increased by 14.3% — roughly on par with the states, but seven percentage points less than the nation as a whole. Meanwhile, population in the shale counties dropped by 2.4%.
“This extreme disconnect between economic output and local prosperity raises the question of whether the Appalachian natural gas industry is capable of generating or even contributing to broadly shared wellbeing,” the report said.