Sustained Outrage

Part 2: How many jobs would a cracker create?

Gov. Earl Ray Tomblin

The potential construction of a natural gas “cracker” plant was understandably a big topic of discussion yesterday at Gov. Earl Ray Tomblin’s Energy Summit here in Charleston. Unfortunately, though, state officials continue to misstate the findings of an industry jobs study in their rhetoric about what a big deal such a plant would be for West Virginia’s economy.

In opening the conference, Commerce Secretary Keith Burdette, for example, cited the American Chemistry Council study and said it found such a facility would create “12,000 direct and downstream jobs.”

Then, during a very brief luncheon speech, Gov. Tomblin cited the same study and said it showed a cracker plant here would create 12,000 jobs in the “chemical and polymer industries.”

We’ve discussed this study before on this blog (see here), and tried to explain what it does and doesn’t say. You can read the study documents for yourself here, here and here. But this is the bottom line, quoting from my previous post on this:

Table 1 outlines the estimated ongoing (permanent) jobs that might be created if a company invests $3.2 billion in a major cracker facility here: About 12,300 total jobs. That figure includes 2,500 direct jobs, 6,300 indirect jobs and 3,500 induced jobs. As Kevin Swift, the council’s chief economist, just explained to me, that total number of jobs — the 12,000 figure the governor cited in his speech on statewide television and radio, before a joint session of the Legislature — includes all manner of jobs. It is not only direct manufacturing jobs, but positions with suppliers and support industries — everything from a waitress at a new cafe across the road from the plant to a doctor who starts a practice to serve residents in a growing community.

But they’re not all manufacturing jobs, and the ACC study doesn’t provide more detail that would give a clearer picture of how many jobs in various sectors with various levels of pay and benefits might be includes. You can get perhaps a bit more information by looking at the average wages for each category — $112,000 annually for direct jobs and $34,000 for indirect. But that’s a basic average, and may not tell the whole story.

It’s true that Gov. Tomblin said later in his talk that the cracker would provide:

.. Billions of dollars of economic impact that will affect every aspect of our economy, from locally owned grocery stores to plastics manufacturers.

But his speech still confuses the general public into thinking that  a West Virginia cracker plant would create 12,000 jobs in manufacturing or in the chemical industry, because he overstates what this study found. There’s no question such a project would have a huge economic impact — so why do state leaders insist on exaggerating things?