Pittsburgh’s fracking industry cut more than 400 jobs in 2019, with more cuts likely on the way | News | Pittsburgh | Pittsburgh City Paper

Pittsburgh’s fracking industry cut more than 400 jobs in 2019, with more cuts likely on the way

Last year, Pittsburgh’s fracking industry cut hundreds of jobs, and the outlook for 2020 could be even worse for the natural gas extraction field.

Local natural gas players like EQT, Range Resources, and CNX have cut a combined total of more than 400 jobs since January 2019.

EQT, which is headquartered in Pittsburgh, led the way with almost 300 job cuts last year. The energy company laid off about 100 last January and then announced an additional 196 job cuts last September.

CNX, which is headquartered in Washington County, cut 70 positions last year, while Range Resources cut 40 jobs from its Pittsburgh regional offices. Range Resources, a Texas company, also cut 50 jobs from its headquarters in Houston.

These job cuts have been blamed on an economic slowdown within the natural gas industry. According to Washington County's Observer-Reporter, the number of drilling rigs operating in Pennsylvania has dropped from 47 to 24.

Analysts have noted that there is currently an oversupply of natural gas, meaning that more natural gas is being produced than demand requires, which leads to price drops. The prices have been dropping for the last four years, and the Wall Street Journal reported today that the slide is continuing into 2020.

Andy Brogan, head of the oil and gas global sector at accounting giant EY, recently told the Pittsburgh Business Times he doesn’t expect that slide to turnaround immediately but says it could bounce back.

“In the short term, the gas market is oversupplied and is likely to remain so for the next few years,” said Brogan. “It’s a cyclical business, and we’re at the bottom of the cycle.”

But the slowdown has created casualties. Energy giant Chevron announced last month they would be pulling out of the Pittsburgh region entirely. That means Chevron is leaving its regional offices in Coraopolis, and the fate of its 400 Pittsburgh area jobs is uncertain.

Since 2016, several large conglomerates have divested funds from the Appalachia natural gas region, and other companies have pulled out operations entirely, some of them losing millions of dollars.

The benefits for those working in ancillary industries might be less stellar than originally reported. From 2009-2016, there were about 7,000 jobs created in the extractive services field, the vast majority of these in fracking. However, energy companies like Range Resources promised that fracking would lead to a growth in manufacturing jobs. From 2009-2016, the Pittsburgh region lost more than 10,000 manufacturing jobs.

However, the shrinking industry might get a boost from a newly constructed petrochemical facility coming to Beaver County. Shell is constructing a cracker plant, which will refine natural gas into to plastic pellets. The environmental concerns for fracking and cracker plants remain high, but the hope is that more cracker plants will increase demand for natural gas and those plastic pellets will create a plastics manufacturing sector.

But in places like Louisiana that have several petrochemical plants, its unclear if that has materialized, and these cracker plants haven’t helped increase demand for natural gas significantly.

Because of the precarious future of natural gas, a political rift between leaders has emerged over the industry. Pittsburgh Mayor Bill Peduto has come out in opposition to future cracker plants in the region. He tweeted last week that fracking is over-capacity and that without a secondary market, like plastics, it will fail.

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By Mars Johnson