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Local Employment Impact from Competing Energy Sources: Shale Gas Versus Wind Generation in Texas

Author

Listed:
  • Peter R Hartley

    (Rice University and University of Western Australia)

  • Kenneth B Medlock III

    (Rice University)

  • Ted Temzelides

    (Rice University)

  • Xinya Zhang

    (Rice University)

Abstract

The rapid development of both wind power and of shale gas has been receiving significant attention both in the media and among policy makers. Since these are competing sources of electricity generation, it is informative to investigate their relative merits regarding job creation. We use a panel econometric model to estimate the historical job-creating performance of wind versus that of shale oil and gas. The model is estimated using monthly county level data from Texas from 2001 to 2011. Both first-difference and GMM methods show that shale-related activity has brought strong employment to Texas: 77 short-term jobs or 6.4 full-time equivalent (FTE) jobs per well. Given that 5482 new directional/fractured wells were drilled in Texas in 2011, this implies that about 35000 FTE jobs were created in that year alone. We did not, however, find a corresponding impact on wages. Our estimations did not identify a non-negligible impact from the wind industry on either employment or wages.

Suggested Citation

  • Peter R Hartley & Kenneth B Medlock III & Ted Temzelides & Xinya Zhang, 2014. "Local Employment Impact from Competing Energy Sources: Shale Gas Versus Wind Generation in Texas," Economics Discussion / Working Papers 14-15, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:14-15
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    References listed on IDEAS

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    Cited by:

    1. John Dorrell & Keunjae Lee, 2020. "The Cost of Wind: Negative Economic Effects of Global Wind Energy Development," Energies, MDPI, vol. 13(14), pages 1-25, July.
    2. Evans, Neil & Jones, Calvin & Munday, Max & Song, Meng, 2019. "Economic effects in the UK periphery from unconventional gas development: Evidence from Wales," Energy, Elsevier, vol. 166(C), pages 1037-1046.
    3. Jaimes, Richard & Gerlagh, Reyer, 2020. "Resource-richness and economic growth in contemporary U.S," Energy Economics, Elsevier, vol. 89(C).
    4. Agerton, Mark & Hartley, Peter R. & Medlock, Kenneth B. & Temzelides, Ted, 2017. "Employment impacts of upstream oil and gas investment in the United States," Energy Economics, Elsevier, vol. 62(C), pages 171-180.
    5. Arvanitopoulos, T. & Agnolucci, P., 2020. "The long-term effect of renewable electricity on employment in the United Kingdom," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
    6. Yvonne Rydin & Lucy Natarajan & Maria Lee & Simon Lock, 2018. "Do local economic interests matter when regulating nationally significant infrastructure? The case of renewable energy infrastructure projects," Local Economy, London South Bank University, vol. 33(3), pages 269-286, May.
    7. Zerrahn, Alexander, 2017. "Wind Power and Externalities," Ecological Economics, Elsevier, vol. 141(C), pages 245-260.
    8. Keeler, Zachary T. & Stephens, Heather M., 2020. "Valuing shale gas development in resource-dependent communities," Resources Policy, Elsevier, vol. 69(C).
    9. Nasirov, Shahriyar & Girard, Aymeric & Peña, Cristobal & Salazar, Felipe & Simon, François, 2021. "Expansion of renewable energy in Chile: Analysis of the effects on employment," Energy, Elsevier, vol. 226(C).
    10. Susan Amiesa Fubara & Omowumi O. Iledare & Obindah Gershon & Jeremiah Ejemeyovwi, 2019. "Natural Resource Extraction and Economic Performance of the Niger Delta Region in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 9(4), pages 188-193.
    11. Mark Partridge & Shawn M. Rohlin & Amanda L. Weinstein, 2020. "Firm formation and survival in the shale boom," Small Business Economics, Springer, vol. 55(4), pages 975-996, December.
    12. Carpenter, Craig Wesley & Anderson, David & Dudensing, Rebekka, 2019. "The Texas Drilling Boom and Local Human Capital Investment," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 51(2), pages 199-218, May.
    13. Bluedorn, John & Hansen, Niels-Jakob & Noureldin, Diaa & Shibata, Ippei & Tavares, Marina M., 2023. "Transitioning to a greener labor market: Cross-country evidence from microdata," Energy Economics, Elsevier, vol. 126(C).
    14. Costa, Hélia & Veiga, Linda, 2021. "Local labor impact of wind energy investment: An analysis of Portuguese municipalities," Energy Economics, Elsevier, vol. 94(C).
    15. Saboori, Behnaz & Gholipour, Hassan F. & Rasoulinezhad, Ehsan & Ranjbar, Omid, 2022. "Renewable energy sources and unemployment rate: Evidence from the US states," Energy Policy, Elsevier, vol. 168(C).
    16. Gonçalves, S. & Rodrigues, T.P. & Chagas, A.L.S., 2020. "The impact of wind power on the Brazilian labor market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 128(C).
    17. Cartelle Barros, Juan José & Lara Coira, Manuel & de la Cruz López, María Pilar & del Caño Gochi, Alfredo, 2017. "Comparative analysis of direct employment generated by renewable and non-renewable power plants," Energy, Elsevier, vol. 139(C), pages 542-554.
    18. Hongxun Liu & Jianglong Li, 2018. "The US Shale Gas Revolution and Its Externality on Crude Oil Prices: A Counterfactual Analysis," Sustainability, MDPI, vol. 10(3), pages 1-17, March.
    19. Bilgili, Faik & Koçak, Emrah & Bulut, Ümit & Sualp, M. Nedim, 2016. "How did the US economy react to shale gas production revolution? An advanced time series approach," Energy, Elsevier, vol. 116(P1), pages 963-977.
    20. Brunner, Eric J. & Schwegman, David J., 2022. "Commercial wind energy installations and local economic development: Evidence from U.S. counties," Energy Policy, Elsevier, vol. 165(C).
    21. Mark Partridge & Shawn M. Rohlin & Amanda L. Weinstein, 0. "Firm formation and survival in the shale boom," Small Business Economics, Springer, vol. 0, pages 1-22.
    22. Lee, Won Sang & Sohn, So Young, 2018. "Effects of standardization on the evolution of information and communications technology," Technological Forecasting and Social Change, Elsevier, vol. 132(C), pages 308-317.
    23. Lee, Jim, 2015. "The regional economic impact of oil and gas extraction in Texas," Energy Policy, Elsevier, vol. 87(C), pages 60-71.

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    More about this item

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J49 - Labor and Demographic Economics - - Particular Labor Markets - - - Other
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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