April 2012

Natural Gas Boom Brings New Opportunities, Challenges for IBEW
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Williamsport, Pa. — Mud-splattered Ford F-150 pick-up trucks equipped with full tool boxes fill the parking lots of nearly every hotel, motel, bar and restaurant in Lycoming County, sporting license plates from across the country. Workers from Arkansas, Texas, Florida and even California are descending on this small Rust Belt town, which within the last two years has become one of the hottest job markets in the country.

Until recently, Williamsport was probably the last place you would move if you were looking for work. Passed over by the tech and housing booms of the early- to mid-aughts, this small town of under 30,000 nestled in the Appalachian Mountains in northern Pennsylvania — best known as the birthplace of Little League Baseball — struggled with high unemployment long before the 2008 crash.

"There just wasn't much happening around here," says Williamsport Local 812 Business Manager Jim Beamer, who said unemployment among his membership had topped 30 percent for as long as he can remember.

But today almost every Local 812 member is off the book, and the town's Chamber of Commerce is boasting more than 70 new businesses — from restaurants to construction contractors — in the last two years alone.

The source of Williamsport's newfound wealth: the Marcellus Shale, a natural gas deposit that runs across the northern section of the Appalachian Mountains from Ohio to New York, an immense supply of domestic energy that has been called America's Saudi Arabia.

Scientists and energy companies had known for years about the deposit, but until now technological limitations made it prohibitively expensive to drill.

Hydraulic fracturing — known as fracking — which involves harvesting natural gas directly from the shale rock, has made shale gas the hottest new energy commodity, injecting billions back into an ailing economy. Natural gas is now being touted by President Obama as a solution to two of the country's most vexing policy problems: establishing energy independence and getting Americans back to work.

"We have a supply of natural gas that can last America nearly 100 years. And my administration will take every possible action to safely develop this energy," Obama said in his January State of the Union address, predicting that the "development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don't have to choose between our environment and our economy."

Shale gas has been discovered in more than 14 states, with active drilling going on throughout the Appalachian region, as well as in the Midwest, West and South, spurring an energy rush not seen since the great Texas oil rush of the first part of the 20th century.

Shale Gas Revolution

For IBEW members in Pennsylvania, hints of that future can be seen now. "The work has really picked up," says Third District Vice President Donald Siegel.

"We've seen a big boost in employment," says Wilkes-Barre Local 163 Business Manager Michael Kwashnik. Across the state, Pittsburgh Local 5 Business Manager Michael Dunleavy says he has more than 200 members working on natural gas projects throughout western Pennsylvania, including wiring new offices for some of the biggest drilling companies, which have set up shop in the shale region.

Pennsylvania has been a center of the shale gas boom, with more than 50,000 new jobs created in the last year alone. And expanded drilling is expected to generate more than $20 billion for the Keystone state by 2020, say industry experts.

"We're talking potentially tens of thousands of jobs," Siegel says. "Most of them are not IBEW jobs yet, but it is having a positive economic effect in the region, helping our locals in the Third District."

The shale gas revolution is also being credited with stimulating the economy as a whole, experts say. Greater supply caused natural gas prices to plummet by nearly 40 percent between 2008 and 2010, according to the Bipartisan Policy Center's Energy Project, allowing consumers and businesses to make substantial savings on energy costs — savings that can be plowed back into the economy, encouraging further economic growth.

The center's report on shale gas, put together by a group of leading industry, labor and policy experts, says natural gas's growth is also giving a boost to other energy sectors, including renewable energy. It points to Florida Power and Light's 500-acre solar farm in West Palm Beach, which, by being attached to a natural gas power plant, lowered the utility's costs by nearly 20 percent.


Horizontal drilling and hydraulic fracturing, which have opened up the immense supply of natural gas in the Marcellus Shale to drilling, is a relatively new technology, developed over three decades with assistance from the federal government. The process starts by drilling a deep well. Driving through layers of earth, the drill then makes a gradual horizontal turn through the shale rock. A pipe is then fed into the freshly-drilled well, followed by millions of gallons of water, mixed with sand and various chemicals, which breaks up the rock, releasing the gas inside.

Much of the IBEW work so far has been on compressor stations, which pump the gas through miles of pipes to get it to market. The gas boom has also resulted in thousands of IBEW man-hours of new construction work — from wiring work camps that house out-of-state workers to new offices for energy companies that have set up shop in the shale region.

Fracking is also laying the foundation for a renaissance of Rust Belt manufacturing as formerly shuttered steel mills reopen to make tubes and other parts needed for drilling. (See sidebar)

Most promising are plans for numerous "cracker" plants that break down natural gas for use in consumer products, which the Pittsburgh Post-Gazette predicts could "promise the kind of construction and job creation not seen in the region since steel's heyday."

Although it is creating work for most of the locals in the heart of the Marcellus Shale, the vast majority of fracking work still remains nonunion.

"These well sites are free-for-alls, with new companies and contractors moving in weekly, mostly bringing in their own workers," says Scranton Local 81 Business Manager Rick Schraeder. While he says he is lucky to have dozens of his members working in the gas industry, he said the IBEW needs to have a long-term plan if it wants to make sure the natural gas boon results in good jobs for Pennsylvania residents.

Organizing in the shale gas fields is proving to be tough going, says Local 812's Beamer. "With all the out-of-state workers, it is hard to find out who is doing the electrical work."

Many of the natural gas companies working in the shale region are based in right-to-work states in the South — Texas, Oklahoma and Arkansas — where union members are scarce, so few of their employees are familiar with organized labor.

"We will go to wherever the workers are to try to get some leads," Beamer says.

The IBEW is also working with contractors to more aggressively go after drilling jobs, helping to craft more competitive bids and meeting with company officials to directly sell them on what the IBEW and the National Electrical Contractors Association have to offer. "Right now very few of our contractors are going after the work," says Kwashnik. "Compressor stations are our best chance, because they are the most complicated electrical operations on the drilling site and there are very few bids on this work."

Common-Sense Regulations

Besides being less expensive, natural gas is also cleaner than fossil fuels, producing more than 30 percent fewer carbon emissions than coal and oil, initially leading many policy leaders and environmental activists to promote it as a green energy alternative — until some homeowners near fracking sites noticed that their tap water had suddenly become flammable.

Sloppy work was causing methane to leak into local water supplies, turning faucets and showerheads into potential fire hazards. This image of flaming taps, popularized by numerous YouTube videos, soon became the iconic image of hydraulic fracturing for many Americans.

These revelations, plus concern about potentially carcinogenic chemicals in fracking solutions, has fueled a high-profile battle, pitting conservationists and community leaders against energy companies and pro-drilling elected officials over the potentially harmful effects of gas drilling.

The distance between the shale level and aquifers — usually a mile or more — is large enough to make it unlikely that methane or fracking solution could seep directly into the water table, but only if the job is done right.

"Fractures created during the hydraulic fracturing process are generally unable to span the distance between hydrocarbon and fresh water zones," says the Bipartisan Policy Center's Energy Project report. "However there is the potential for fracturing fluids or methane gas to migrate into drinking water resources if wellbore integrity is not assured, or if proper surface handling procedures are not followed."

These concerns have led lawmakers in New York State, New Jersey and Maryland, all home to massive shale gas deposits, to issue moratoriums on fracking until further environmental studies can be completed.

Not helping matters is the largely unregulated nature of the industry, due in large part to energy legislation passed under President George Bush, which exempted natural gas companies from clean water regulations — an opt-out known as the "Halliburton loophole" because it is widely perceived to have come about as a result of the efforts of Vice President (and former Halliburton chief executive) Dick Cheney's Energy Task Force.

The shale gas boon has meant good jobs for the IBEW, but that doesn't mean that union members don't share many of the same concerns expressed by green and community activists, Kwashnik says.

"We work here, but we also live here, and once you mess up your water supply, we all have a big problem," he says, adding that common-sense pollution controls are long overdue. "The days when the coal barons ran this state aren't so long ago, and we saw the environmental havoc they wreaked when they were able to operate without any rules or regulations."

Schraeder agrees. "We are telling groups like the Sierra Club that this industry isn't going away, but we can partner together to help make it safer and cleaner."

Lawmakers in states with the biggest concentrations of natural gas drilling, including Pennsylvania, Wyoming and Arkansas, are making moves to beef up environmental enforcement standards. Leading the way is Texas, not traditionally known for its tough regulations, which last summer became the first state requiring companies to disclose the chemicals used in fracking operations.

A big part of insuring environmental safety on drilling projects means making sure they are staffed by an experienced and trained work force, says Schraeder.

He and other business managers from other locals in the Marcellus Shale region are now lobbying members of the Pennsylvania legislature to pass laws requiring a certain percentage of skilled natural gas work be done by graduates of a state-approved apprenticeship program.

"We understand because of interstate commerce, out-of-state workers can't be stopped from working in our state. However, with the accidents that have already taken place, we need to take a good look at who is doing the work," Schraeder told legislators in a Feb. 14 letter.

Hardly any of these companies have training programs that can match up with the IBEW's, Schraeder adds, and when you are dealing with a billion dollar industry with the potential for catastrophic environmental damage, "Do you really want to risk making a mistake?"

Even some of the harshest fracking critics say that the environment-versus-jobs debate provoked by fracking doesn't have to be an either/or argument. Fred Krupp, president of the Environmental Defense Fund, told New York Times reporter Joe Nocera that natural gas can still be the bridge fuel that brings us toward a renewable energy future, but only if states develop "smart regulation that would make fracking environmentally safer."

Environmental Protection Agency Administrator Lisa Jackson, whose agency is currently looking into the effects of fracking on groundwater and drinking water, agrees, recently telling a gathering of energy industry leaders and environmentalists that fracking can be done cleanly if the companies doing it "take some time to make sure that it's done right," according to the Asbury Park Press. "It requires smart regulation, smart rules of the road."

The rapid growth of hydraulic fracturing — known as fracking — is changing the energy map of the United States, creating tens of thousands of new jobs.

Photo used under a Creative Commons License from Flickr user EnergyTomorrow.

The IBEW and local communities affected by fracking have called on local officials to enact common-sense environmental and safety regulations for the natural gas industry.

Photo used under a Creative Commons License from Flickr user EnergyTomorrow.

Massive shale gas deposits exist in more than 14 states, with active drilling going on in the Midwest, West and South.

Photo used under a Creative Commons License from Flickr user EnergyTomorrow.

Natural Gas Boom Leads to Industrial Resurgence
in Ohio

They built a blast furnace
Here along the shore
And they made the cannonballs
That helped the Union win the war
Here in Youngstown

Bruce Springsteen

As the natural gas industry leases more land and states debate how to deal with the economic and environmental impact of hydraulic fracturing, an industrial resurgence is heating up in the Mahoning Valley of Ohio. Natural gas extraction requires miles of pipe. And IBEW electricians are helping build the capacity to put more of the tubes on the market.

In a valley where the cold furnaces of a once-powerful steel industry long ago chilled the hope and spirit of surrounding communities, V&M, a France-based manufacturer of seamless pipe, is banking on a $650-million expansion project to boost profits.

The pipe will primarily supply wells exploiting the shale that lies under parts of Ohio, New York, Pennsylvania and West Virginia, reaching into nearby sections of Kentucky, Maryland, Tennessee and Virginia and the Canadian provinces of Ontario and Quebec.

Before the hot-rolling, seamless pipe mill is complete, it will have employed 300 members of Youngstown Local 64. Electricians are currently installing all the interior equipment, which includes a rotary furnace and a piercing mill that creates the seamless pipe.

V&M's expansion will add 350 full-time positions to its current work force. The project is the largest private investment in the region since General Motors built the Lordstown assembly plant nearly 40 years ago.

V&M's expansion was assisted by $20 million in federal stimulus money — provided under the American Recovery and Reinvestment Act — approved by former Democratic Gov. Ted Strickland to relocate a Norfolk Southern railway line, opening up 100 acres nearby for the industrial development.

"The corridor is looking brighter," says Local 64 Business Manager Jim Burgham of the locale where 34 years ago on what was called Black Monday, Youngstown Sheet and Tube announced the shutdown memorialized in the song by Bruce Springsteen. Youngstown lost more than half its population since 1950.

At V&M, says Burgham, "Everything is colorful and state-of-the-art." But even more importantly, he adds, spin-offs from V&M could mean more work for IBEW members and unemployed residents. A sister company is already planning a facility to do high-tech threading and coupling of locally produced pipe.

Mark Skowron, an area foreman for Sargent Electric, began his apprenticeship in 1971 and enjoyed a career built around industrial jobs until Youngstown's steel industry declined, leaving only a few specialized mills behind.

Skowron, who recently started working on the V&M facility after months of traveling to Pittsburgh and Steubenville, Ohio, for work, says, "The Marcellus and Utica shale formations mean big money and V&M is doing it right." The company will not only be making pipe, says Skowron, but will also build a water treatment facility. As the new mill ramps up, he expects more industry, commercial and retail development to follow.

An oil and gas industry study projects more than 200,000 new jobs and $22 billion in economic gain to Ohio by 2015.

"V&M has used nonunion contractors in the past," says Skowron. Today, he says, the company praises the quality they are getting from the IBEW. "Our people are doing a great job."