Local employment impact from competing energy sources: Shale gas versus wind generation in Texas

- The rapid development of wind power and shale gas has been receiving significant attention.
- Some of the discussion has focused on the implications of these developments for employment and wages.
- We estimate job-creation from wind and shale oil and gas development in Texas counties over 2001-2011.
- Texas has seen substantial growth in both industries over this period.
- We find that shale-related activity has increased employment to Texas: from 5-20 jobs per well.
- We did not find a non-negligible corresponding impact on employment from the wind industry.
- We found very minor, albeit statistically significant, effects of these developments on real wages.

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 local 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. For example, based on the 5482 new directional/fractured wells drilled in Texas in 2011, the estimates imply that between 25,000 and 125,000 net 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 local employment or wages.