Earlier this week, EID highlighted a new PricewaterhouseCoopers (PwC) study commissioned by the American Petroleum Institute (API) that illustrates the tremendous positive economic impact the oil and natural gas industry has on the U.S. economy. The study focuses on the 10.3 million jobs and $1.3 trillion the oil and gas industry contributed to the economy in 2015, despite low commodity prices.
This positive impact is perhaps most evident in the Western states, where the study finds oil and natural gas industry workers make up more than 10 percent of the total labor force in several states, including 16.6 percent of Oklahoma’s workforce, 14.4 percent of Wyoming’s labor force and 13.3 percent of the workforce in North Dakota.
API’s local chapter, the Colorado Petroleum Council, released Colorado specifics from the study, which find the industry added $31 billion to the state’s economy in 2015 and supported 232,900 jobs, accounting for seven percent of total state employment. According to the Denver Business Journal, oil and natural gas production in Colorado also contributed $202 million to local school districts through property tax payments.
Colorado Petroleum Council Executive Director Tracee Bentley added:
“This economic activity generates financial benefits and supports jobs well beyond the energy sector. More than 1,100 businesses spread across the state are part of the larger oil and natural gas supply chain, which includes over 260 companies in Denver and more than 70 companies in Grand Junction. School districts in Colorado received nearly $202 million from oil and gas production property taxes in 2012 alone.”
In Colorado, the oil and natural gas industry provided 78,300 direct industry jobs, 83,500 service jobs, 22,600 wholesale and retail jobs, and 4,800 manufacturing jobs, to name a few in a long list of varying sectors supported by the industry, totaling nearly $23.1 billion in wages in 2015.
API’s economic impact study also finds that the New Mexico oil and natural gas industry supports 90,100 direct jobs, which is 8.3 percent of the state’s labor force. Recent media reports have also highlighted how the industry provides funding to public education and accounts for a quarter of the state’s budget through taxes, lease sales and other revenue streams. The Albuquerque Business Journal recently reported that the New Mexico State Land Office collected more than $30 million in lease sales for the month of July 2017. The majority of the funds were directed to the state’s public schools, totaling $23.9 million.
In a statement, API President and CEO Jack Gerard summarized the positive ways oil and natural gas influence daily life:
“This study validates the role of the natural gas and oil industry in growing the U.S. economy and supporting more than 10 million workers from coast-to-coast. Natural gas and oil touches virtually every facet of our life – from heating our homes and fueling transportation to life-saving medical devices and cosmetics at the drug store. This study is further proof of the positive impact that U.S. resources have on workers and communities across the nation.”
This chart sourced from the API study breaks down the economic impact by sector:
Using direct impact, indirect impact and induced impact as three measures to quantify the industry’s overall economic output, the study estimates the industry’s total labor impact at $714 billion and contribution to U.S. GDP at $1.3 trillion for 2015, as depicted in the chart below:
Directly or indirectly, domestic production of oil and natural gas positively influences industries like manufacturing, construction and agriculture. The industry supports public education and provides 10.3 million jobs for Americans. This study emphasizes what’s at stake when it comes to U.S. energy security and how supporting U.S. oil and natural gas development supports and contributes to U.S. economic viability.