Pennsylvania’s natural gas producers have largely ignored a state law requiring efforts to include minority, women, and veteran-owned businesses in contracting opportunities.
Last year, fewer than a third of the state’s gas operators replied to a legally-mandated survey asking them to document their use of small diverse businesses.
Among the companies that did reply, about half said they did not employ any businesses owned by women, minorities or veterans.
Companies ignore legally-mandated survey
The requirement is part of the state’s two-year-old oil and gas law known as Act 13. It directs drillers to provide “maximum practicable contracting opportunities for diverse small businesses,” which are defined as minority, women, or veteran-owned businesses.
Although the law does not set quotas, it does require gas producers to respond to an annual diversity survey and to use the state Department of General Services’ database to identify certified small diverse businesses.
According to the department’s first report, only 21 of the 77 companies surveyed responded. Of those, two no longer operated in the state. Out of the remaining 19 operators, 13 said they did not use the state database.
Governor Corbett’s Energy Executive Patrick Henderson said the administration hopes to get better compliance in this year’s survey and with better data, get a firmer grasp on the situation.
“We are not satisfied with the response rate of the first survey and are reaching out to the major trade associations to convey the importance of responding to the most recent survey that was sent out in March 2014,” Henderson said in an e-mail. “We will also continue our efforts to foster engagement with small-and minority-owned businesses so that they can fully pursue opportunities within [Pennsylvania]’s shale industry.”
Henderson expects the next report from the Department of General Services this summer.
According to the most recent survey by the Marcellus Shale Coalition, non-whites made up 20 percent of the workforce in 2012. Women made up less than 22 percent. The survey did not track veterans’ participation in the industry.
Paula Jackson is President and CEO of the American Association of Blacks in Energy (AABE). Jackson would not comment on the state report, but said including small business-owners in the conversation will help diversify the industry.
“Some of these jobs may be in areas where minorities don’t live or are not willing to relocate,” Jackson said. “However, minority businesses tend to hire from their community, so there is another way to have an impact and bring people in and have them engaged when you start looking at minority businesses as partners to your industry.”
Groups say industry is reaching out as opportunities in shale grow
About 70 people attended a conference in Philadelphia on Monday hosted by AABE and another membership group, Hispanics in Energy. It is one of eight “community conversations” the groups are hosting in cities across the country where energy is playing a larger role in the local economies.
Frank Stewart, a retired deputy assistant secretary with the Department of Energy, told the audience that record-breaking production in the Marcellus Shale will present many opportunities for women and minorities who want to break into the business.
“It’s natural gas that’s going to be driving the manufacturing renaissance that we’re going to be seeing over the next few years,” Stewart said, citing an industry-sponsored report by IHS that projects African Americans and Hispanics will make up more than 30 percent of the workforce by 2030.
“There’s a future for both skilled and unskilled, semi-skilled jobs, white collar jobs. High school education combined with some post-secondary [education] is enough to get into these new employment opportunities.”
But for some who attended conference, the path to a career in energy is still unclear.
“How much can a woman make? Who are some of the women in the industry? Who are the minorities making money,” said career coach Michelle Snow. “Give us the stories so that we can say maybe if they did it, perhaps I can, too.”
You can read the report from the Department of General Services below: