Economic impact, Jobs

“Dear Aunty, will fracking really create lots of jobs?”

Well, of course it will dears – fracking for shale gas will be a major infrastructure project carried out over many years and will generate all sorts of job opportunities.

The debate over precisely how many has been rumbling on for ages now.

Cuadrilla made some early estimates in the low thousands. Then a report they commissioned by Regeneris Consulting produced an estimate of 5,600 jobs at the UK level during the period 2016-2019. In May 2013, the Institute of Directors published a report sponsored by Cuadrilla that estimated that, at peak, a UK shale gas industry could be responsible for as many as 74,000 jobs – these being a mixture of direct, indirect and so-called induced jobs cherubs. Even more recently, management consulting group Poyry suggested the figure could be even higher at 100,000 jobs.

Opponents of shale gas exploration say these are all inflated claims that are being used to bolster the case for fracking, and that renewables can create substantially more jobs.

So, how many jobs will a fracking industry really create pumpkins?

The answer is: nobody knows yet. Not Cuadrilla, not the Institute of Directors, not the management consultants, not AMEC who the Financial Times have reported as claiming the number of jobs will be far lower than other predictions, not Greenpeace or Friends of the Earth, certainly not Lytham-based anti-fracking opponent and administrator of the website John Hobson, and not me either dears.

What we can do is make some headline predictions, based on the experience of others elsewhere and common industry practice.

It is not uncommon, darlings, for big manufacturing, infrastructure and energy businesses to make estimates of job creation based on a link to capital expenditure – the nuclear industry, for example, will be able to confidently predict how many jobs will be created building a new reactor and power station based on previous experience and capital spend. It doesn’t provide an absolute, but it’s a start. Likewise, dears, we can look to the experience of companies already fracking for gas in the US and see that for every 1 direct job that’s created by the drillers themselves, there are 2 indirect jobs created in the supply chain and so it’s again possible to extrapolate from this sort of ratio too.

But, again sweeties, these are only ever predictions and it would help enormously (as I’ve said before) if we could see a more detailed study performed that produces a more accurate assessment.

So, how realistic is it to think that fracking for shale gas can create lots of jobs?

Well, thinking about it in a cradle-to-grave sense, it seems obvious that there’s lots of potential darlings.

Before any drilling activity takes place, a team of geologists will pore over historic data to try and identify the best sites. Then, there will be a whole host of site surveys, including by civil engineering experts. Others, such as specialist land agents, will identify landowners and negotiate access and rentals with them and then consultants will draw up planning applications and risk assessments, that are submitted to the Minerals and Planning authority and consulted on by the public cherubs. All of the people engaged in these endeavours will be supported by HR and accountancy (soft) functions, and may live and spend their wages nearby in local shops, all of which require more people. And, so far, no physical activity has taken place anywhere yet.

If and when planning permission is secured, the sites themselves have to be created. That will mean civil engineering and construction contractors creating the rectangular drill pads using heavy plant and machinery, but they might not have their own equipment and may instead hire it from an plant hire company (who will also employ staff of their own). Someone will need to maintain this plant, of course, and that might be contracted to another company (more jobs). Contractors will be responsible for laying the impermeable membrane that guards against surface spills (the membrane, of course, will be manufactured by others and transported to the drill sites, which means more jobs), then someone else will install security fencing (again, fabricated by others, with metal galvanised by others still to weatherproof it, all of which requires more jobs and the soft services that support them) and still no drilling has taken place dears.

When that does start, transport companies (employing drivers, maintenance fitters, mechanics etc) bring all the equipment to site, others deliver the drilling muds (more drivers), others still cart the used drilling muds away, then all the equipment is de-mobilised and moved to make way for the fracking equipment, the water and additives deliveries and flowback waste removal. Others will install and monitor the seismic array as part of the DECC traffic light system to mitigate against fracking induced tremors, and then there are the regulatory agencies and all the staff they’ll need to employ.

Do you see what I mean, sweeties? It will have an undeniable ripple effect.

Multiply that over hundreds, maybe even thousands of wells, and you can see it could be enormous.

This is the sort of study we need to see, taking a detailed look at the whole process, step-by-step, and making as accurate a prediction as possible about how many jobs each will be responsible for and whether these are direct or indirect.

Of course, my little flowerpots, even then it will only hint at what could be. To find out for certain, we need to see the shale gas industry develop and so, until then, we only have conjecture to rely on.

But that’s the same for the renewables industry too.

Until next time xxx


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