Marcellus Shale

Thanks to Shale, West Virginia Had the Highest Economic Growth in the Country in 2017

A WTOV story this week called attention to a late-2017 report that shows West Virginia had the highest economic growth of any state in the country in 2017. As Business Development Corporation of the Northern Panhandle Executive Director Patrick Ford told EID, the driving force behind this growth was West Virginia’s growing shale industry.

“The growth in our GDP and economy has been driven by energy. Natural gas has given a rebirth to the value-added metal, energy, and chemical industry clusters, expanded our transportation logistics and health care industry clusters, cut our unemployment rate in half, attracted over $400 million of private investment, driven up worker pay rates to the highest levels we have seen since 2008, and fueled a construction industry that has our region growing construction jobs faster than other metro area in the country.”

According to the GoBankingRates.com report, in 2017 West Virginia:

  • Experienced a 6.84 percent growth in gross domestic product (GDP)
  • Saw personal income increase 2.75 percent
  • Had a 1.3 percent decrease in its unemployment rate

The report also lists Pennsylvania (4th) and Ohio (24th) in the top 25 states for economic growth in 2017 – crediting growing mining (read: shale) and manufacturing (read: because of shale) industries in each state. But West Virginia, by far, saw the most improvement in the region. As the report explains,

“[West Virginia’s] unemployment rate in March 2016 was 6.2 percent, one of the highest in the country. A year later the unemployment rate was 4.9 percent.”

That trend has continued in 2018, and it’s the state’s shale counties that have seen some of the most improved unemployment rates. For instance, Doddridge County – one of the highest natural gas and oil producing counties in the state – had an unemployment of 3.2 percent in June 2018, well below the national and state average of four and 5.3 percent, respectively.

As Ford shared with EID, two additional high producing shale counties, Brooke and Hancock, have seen incredible improvement in unemployment, as well. Brooke County’s unemployment rate decreased from 13.3 percent in 2010 to 6.8 percent in June 2018, and Hancock’s decreased from 13.7 percent to 5.9 percent. That’s a 49 percent and 57 percent decrease in the unemployment rates, respectively.

And as Strategic Business Manager Theresa Comisso explained to WTOV,

“Everyone who is working in this shale is local people putting money back into our economy. They live here, they work just like everyone else and when you go on all these sites, it’s amazing.”

Ford explained that the shale industry has created 2,521 jobs, and helped to preserve 674 in the Northern Panhandle (Brooke and Hancock counties). As he told WTOV,

“If you get into the weeds to find out exactly what that oil and gas job means… For every oil and gas job, we create, there is a spinoff of one to four jobs in the community because of that one job.” (emphasis added)

According to the Associated General Contractors (AGA), the Weirton-Steubenville W.V./Ohio metropolitan area ranked first in the country for construction job growth between March 2017 to March 2018. The region saw a 29 percent increase in construction jobs during that time period, with 400 jobs added.  This is a continued trend with the region experiencing 12 percent growth in 2017 (200 jobs added), 16 percent in 2016 (300 jobs added) and 50 percent in 2015 (800 jobs added).

As Ford explained to EID, the increased jobs have added more than $136.6 million to the annual payroll in the Northern Panhandle.

Further, Ford explained that the shale industry has also helped spur more than $399.7 million in investments in the Northern Panhandle, with nearly all of that coming from the private sector ($361.8 million). And that’s not even including an additional $15 million that has been invested in developing new hotels and restaurants.

All of this shale activity has also brought increased tax revenue and charitable giving to the state. For instance, in Doddridge County, Dominion Energy’s operations brought in more than $800,000 in property tax revenue in 2017 alone, and the company awarded more than $61,000 in grants to local schools and nonprofits from 2005 to 2017, according to State Journal.

It is undeniable that the shale industry has been a game-changer across the Appalachian Basin, and as these reports show, to West Virginia in particular in 2017. And with natural gas production continuing to break recordsdriven by the Appalachian region – 2018 could prove even better.

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