Experience on the mainland shows that the unconventional gas industry is a small employer. Almost all the employment is during the brief construction phase and these positions are not typically filled by locals. The few locals who may be employed tend to be skilled workers who are poached from existing businesses, not unemployed people in the local community. In this regard, the industry is highly disruptive to existing local businesses.
The industry frequently makes exaggerated claims about the number of jobs it creates. The job creation figures claimed by the industry sound impressive because they include indirect jobs in their jobs total. Every industry creates indirect jobs, but no other industry or employer group includes indirect jobs in the employment figures they announce.
Absurdly, the industry uses a jobs multiplier figure of 10. That is, they claim that for every 1 person they employ, 10 flow-on jobs are created in the rest of the economy. Woolworths says it employs 190,000 people nationally. If Woolworths used a 10x multiplier it could lay claim to creating around 2 million jobs. Equally ludicrously, Bunnings, which in December 2014 listed its employment figures as 38,000, could claim it created 418,000 jobs.
Even though these jobs claims are unsubstantiated, they continue to go unchallenged. The numbers don't stack up:
Santos commissioned modelling for a CSG project in northwest NSW which showed the project would create a large number of indirect jobs, including up to 570 public sector jobs, while actually directly employing only 30 people.
The oil and gas industry's peak body in Australia, APPEA, said the industry had created an additional 100,000 Australian jobs in 2012. Yet Australian Bureau of Statistics records show that only 9,372 jobs were added in 2012.
A media release by APPEA in 2013 headlined that liquefied natural gas (LNG) projects in Queensland were responsible for almost 30,000 indirect jobs, although the body of the announcement said the industry employed 4664 people on 4842 wells in Queensland. On their own figures the industry actually employs less than one person per well.
The exaggerated jobs claims of the oil and gas industry in Australia mirror the experience of the US and the UK.
Research group, Policy Matters Ohio (PMO), tested the claims made by the Ohio Oil and Gas Associations that the shale gas industry would create 40,000 new positions. They found that in the entire state of Ohio, fracking-related employment accounted for fewer than 3,000 jobs.
In Pennsylvania, research by the Multi-State Shale Research Collaborative (MSSRC) found that employment in the Marcellus shale states accounted for just 1 out of every 249 jobs, while the education and health sectors account for 1 in 6 jobs. The MSSRC also noted that oil and gas employment figures used a jobs multiplier of 7, and counted the likes of FedEx delivery drivers and housing construction workers in the jobs claimed by the shale industry.
In 2012 former BP chief executive Lord Browne claimed the shale gas industry, spearheaded by gas finds in Lancashire, could create up to 50,000 British jobs. By 2013, when the UK Institute of Directors (sponsored by Lord Browne's private company, Cuadrilla Resources) publicly stated its jobs figures estimates, that number had inexplicably jumped to 74,000. Yet Cuadrilla's own research found that in the best case scenario the peak UK-wide employment impact would be 6,550 employees, of which between 1,700 and 2,500 could be jobs for locals.
The unconventional gas industry isn't one that provides stable, long term employment for local residents. The industry tends to bring their highly-trained, highly-skilled FIFO workforce to new drill sites.
Energy expert Richard Heinberg notes that:
promises of new jobs rarely go to locals – they usually go to specialists who move to an area for a few years, before moving on. Predictions of jobs to be created in the US in fracking areas, frequently include strippers and prostitutes that thrive amongst the boom areas. Local jobs tend to be service jobs that last a few years.
The industry's usual practice is to relocate its highly specialised workforce from its other drill sites or to recruit workers with industry expertise from outside the local area where wells are drilled. This makes economic sense. It's far less costly and time-consuming for the industry to employ workers who are already qualified and proficient in their field than it is to invest time and money training or re-skilling locals.
As a result, despite the industry's claims to the contrary, the effect on local unemployment is virtually nil when fracking projects come to an area. Fracking companies just don't hire the people who need jobs. They don't draw their workforce from the pool of unskilled or unemployed people in the area.
Research group Policy Matters Ohio found that in that state, higher paying jobs, such as the construction of pipelines and processing plants frequently went to non-local workers following their company's drilling rig as it moved throughout the country, while local populations picked up the less lucrative, temporary positions such as truck driving, waitressing and cleaning.
Many of the highly paid jobs on Australia's gasfields may soon disappear too. In 2014, Energy Drilling Australia (EDA), a subsidiary of Ausdrill Ltd, reportedly bought a new high-tech rig that can walk, rotate 360 degrees, be operated by remote control, load pipe automatically, and can assemble itself and walk to the next well. It's been described as a job killer. The rig allows fracking companies to sharply reduce labour costs by using about 40 percent fewer workers than traditional rigs.
Job Killer Heading to Australia
Typically, 5 or 6 workers would be needed for a rig the size of the T500XD, but Schramm's automated rig operates with just 3 crew members: two in the control room operating the joysticks and a 'helper'.
Fewer workers are also needed at other stages in the process. The rig can be set up without a crane, and it can be transported to the drill site in only 8 truckloads, compared to other rigs that need 12 or more truckloads.
Schramm underlines the worker safety aspects of their futuristic rig, which no doubt has great appeal for fracking companies and politicians alike. However, Schramm is equally quick to point out that companies can reduce their drill site workforces by as much as 40-60 percent. Blind Freddie can see this means lower costs and improved margins for drilling companies, but vastly fewer, though safer, jobs.