Jobs are one of the big promises of the industry but they are rarely if ever delivered at promised levels, are mostly fly in fly out jobs and only delivered in the short construction phase of the development.
One of the damaging aspects of this is the impact of fracking developments on other industries in the local economy. These are complex and varied and relate to understanding the pressures that the fracking industry bring to an area. As an example there are likely to be an exodus of drivers from tourism and pastoral sectors to take up the more lucrative driving jobs in the fracking industry. This means job shortages and increased costs of operations in existing businesses. Evidence from other locations show this can be a major problem with some businesses shutting down and people moving on from regional areas. Anecdotes from Qld (below) and Darwin show that after the construction phase boom these businesses do not recover.
This change of cost structure impacting on other businesses impacts across trade areas and accommodation in particular but across most aspects of the economy.
Impacts such as increasing accommodation pricing meaning less tourism and less tourism spending are one outcome of this.
Limited Job Creation, Very Limited Local Jobs
The gas industry is a capital-intensive industry that provides small numbers of long term jobs. The Office of the Chief Economist 1 estimates that the entire oil and gas industry in Australia employed just 29,000 people in 2015/16. That's less than one quarter of one per cent of the total Australian workforce. In 2016, Australian agricultural industries employed more than 10 times as many people as the oil and gas industry combined. Independent ACIL Allen economic report to the NT Fracking Inquiry found that fracking would only create a few hundred extra jobs, going until 2043.2
Examples from QLD illustrate this as does the experience of many in QLD.
The other strong advice from Local Council/real estate/Chamber of Commerce in QLD impacted towns was don't believe the hype – don’t spend invest your business in anything that the gas companies say they are going to need, or the so-called population growth. They are false promises by onshore gas companies saying they will need equipment, accommodation etc. They will promise growth in population and need for services, and local people will over-invest. They will not bring anyone to town (only to man camps), your investments will be wasted and there will be no compensation. It's a disaster for local economies.
Another story from an Ag supplier was about Origin coming into his store and offering his staff jobs in front of his face, offering them double what they were being paid by him. He couldn't afford to compete with that, lost all his best staff. The gas companies gouged out the local community. The gas jobs were short term, but it had a lasting impact on his business.
Few spillover jobs
Researchers found that job spill over into non-mining employment following Queensland coal seam gas (CSG) development was “negligible” 3. Retail trade and manufacturing showed minimal growth. Other local services jobs and agricultural employment declined. 9 jobs were lost in the services sector for every 10 new CSG jobs. 18 agricultural jobs were lost for every 10 people employed in the CSG industry.
1 Office of the Chief Economist, Resources & Energy Quarterly, March 2017 Historic data: https://industry.gov.au/Office-of-the-Chief-Economist/Publications/Pages/Resources-and-energy-quarterly.aspx;
2 ACIL Allen, 2017, THE ECONOMIC IMPACTS OF A POTENTIAL SHALE GAS DEVELOPMENT IN THE NORTHERN TERRITORY https://frackinginquiry.nt.gov.au/inquiry-reports?a=456790
3 Fleming, D & Measham, T (2015a) “Local economic impacts of an unconventional energy boom; The coal seam gas industry in Australia”, The Australian Journal of Agricultural and Resource Economics 59(1) pp 78-94.