Myth Busted: Tourism Industry Is Thriving in America’s Top Oil & Gas Producing States
The idea that fracking and tourism can’t coexist is something that has been perpetuated by anti-fracking activists eager to ban the practice in states like Maryland and Florida. But there’s a problem with the claim that fracking and tourism can’t co-exist: it’s false. In fact, America’s top oil and gas producing states also have thriving tourism industries as EID’s latest infographic shows.
Let’s take a deeper dive into the tourism industries of some of the top oil and gas producing states in the country: Texas, North Dakota, and Pennsylvania. *Note: EID also looked at California and Florida’s tourism industries here.
Texas: U.S.’s No. 1 oil and natural gas producer
From 2008 – 2015:
- Oil production increased 212 percent
- Natural gas production increased 14 percent
- Visitor spending increased 14 percent
Texas is the top oil and natural gas-producing state in America, producing 980 million barrels of crude oil and 7.9 trillion cubic feet (tcf) of natural gas from April 2016 to March 2017. To put this into perspective, if Texas were a country it would be the world’s third largest producer of both natural gas (behind only the United States and Russia) and oil (behind Saudi Arabia and Iraq). That level of production equated to roughly $26 million per day ($9.5 billion annually) in state and local revenue for Texans in 2016, according to recent data from the Texas Oil and Gas Association (TXOGA).
And as the following map from the Texas Department of Transportation shows, oil and gas development is prevalent across most of the state:
But that’s not particularly shocking – Texas is known for its long history of oil and gas development. What many may not realize, and what goes completely against the anti-fracking claim that fracking is bad for tourism, is that Texas’ tourism industry is also a major driver of the state’s economy. In fact, Business Insider explained in 2014 that Texas was the fourth most popular U.S. travel destination behind only California, Florida and Nevada in a HotelsCombined analysis of hotel bookings.
According to a May 2017 press release from Texas Tourism,
“The Texas travel and tourism industry generated an estimated $69.2 billion in spending in the state in 2016, which directly supported 671,600 jobs across a variety industries, including leisure and hospitality, transportation, retail, trade services, finance, real estate, construction, insurance and others.” (emphasis added)
The press release goes on to explain that leisure travel to Texas also increased by five percent over 2015 in 2016, doing so at the same time the oil and gas industry was increasing production. Gov. Greg Abbot was quoted in the release saying,
“Texas and its wide array of attractions continues to grow in its appeal to tourists nationally and around the world. This growth of the travel and tourism industry is a testament to the history, traditions and experiences that Texas has to offer.”
The following graphic from the Texas Travel Industry Association gives a bit more perspective to the impact of the tourism industry for Texans.
In other words, the Lone Star State’s tourism and oil and gas industry happily co-exist and are significant contributors to the state’s Gross Domestic Product (GDP), as the following chart from Texas’ 2016 Economic Impact of Travel report shows.
Actually, as the following excerpt from the report shows, not only do the two industries excel alongside each other, but the travel and tourism industry experiences lower rates of increases in spending when the oil and gas industry slows down on development activities.
But Texas is just one example of why booming oil and gas production and a thriving tourism industry are not mutually exclusive propositions.
North Dakota: U.S.’s No. 2 oil producer
From 2008 – 2015:
- Oil production increased 589 percent
- Visitor spending increased 29 percent
With crude production currently standing at more than one million barrels per day, North Dakota ranks second in the country in oil production. According to the North Dakota Petroleum Council (NDPC), one in five private employment jobs (73,250) in the state are in the oil industry, with an average salary of $98,000. In the most recent edition of the Economic Effects of Petroleum Industry, a study commissioned by NDPC every two years since 2005, researchers found that the industry contributed $34.25 billion dollars into North Dakota’s economy in 2015.
At the same time that the oil industry was ramping up production from North Dakota’s Bakken Shale, the tourism industry was doing the same. The Bismarck Tribune reported in 2013,
“U.S. Travel Association research shows North Dakota also leads the nation in [tourism] growth.
“In 2011, visitor spending was $3 billion, an increase of 23.5 percent from 2008; 17.2 million people visited the state, an increase of 12.7 percent from 2008; 60 percent of visitors were nonresident travelers, overnight business travel grew by 6 percent from 2008; day trips made up 64 percent of visitation; leisure travel grew by 15 percent and continues to be the largest travel segment.” (emphasis added)
Tourism is the third-largest driver of economic activity in the state, according to the North Dakota Tourism Division’s 2016 Annual report.
The tourism industry makes up four percent of the state’s gross domestic product with $3.1 billion in expenditures from North Dakota’s 21.9 million visitors in 2015, and visitor spending accounts for 5.8 percent of all state and local taxes.
What’s even more impressive about North Dakota’s tourism industry is that it is largely driven by outdoors enthusiasts eager to see one of the state’s many state parks and/or Theodore Roosevelt National Park. Tourists head to North Dakota for fishing, hunting, kayaking, hiking and other outdoor adventures, and as the annual report explains, this hasn’t been slowed down by nearby oil development. In fact, the number of nonresident licenses continues to increase each year:
“North Dakota Game and Fish sold nearly 223,000 resident and nonresident fishing licenses and 9,272 nonresident hunting licenses in 2015-16. It was the fourth consecutive year of record license sales. Year-to-date numbers for the 2016-17 season indicate an 8.9% increase of nonresident fishing license sales on top of the previous year’s record. 59,272 nonresident hunting licenses were sold in 2016-17.”
This increase has occurred despite repeated claims from activists from across the country that fracking is detrimental to hunting and fishing in a region. But, as the following chart from North Dakota’s tourism report shows, that simply isn’t true.
The increase in visitors and oil development in the Bakken have both been important parts of North Dakota’s economy over the last decade. And as the facts show, the oil industry has not negatively impacted the state’s flow of tourists.
Pennsylvania: U.S.’s No. 2 natural gas producer
From 2009 – 2014:
- Natural gas production increased 650 percent
- Visitor spending increased 23 percent
Pennsylvania is the second largest producer of natural gas in the U.S. thanks to an average of more than 19 million cubic feet (mmcf) per day coming out of the Marcellus Shale.
Since 2012, the state’s impact fee on natural gas wells has resulted in over $1 billion distributed predominantly to the municipalities and counties where development is occurring, and also the state as a whole. That’s in addition to the over $2 billion the industry has generated in other tax revenue, billions of dollars invested in the state and the creation of tens of thousands of jobs.
In fact, without shale development Pennsylvania’s jobs, gross domestic product and labor income would have experienced serious negative impacts according to a recent U.S. Chamber report.
And like the other top oil and gas producing states, tourism is a major economic driver for Pennsylvania. According to the Pennsylvania Department of Community and Economic Development (DCED), travelers to the Commonwealth spend over $39 billion annually, generate over $4 billion in tax revenue, and the tourism industry supports over 304,000 jobs across the state.
Perhaps more importantly, DCED’s most recent economic impact report from 2014 shows that the tourism industry has continued to grow as Marcellus development took off in the state. In fact, in 2014 – 10 years after the first Marcellus well was drilled – the state experienced its fifth consecutive year of increased travel spending, which reached a new record at $39.7 billion.
But it’s not just history-rich places such as Philadelphia that are far from Marcellus development that are enticing people to visit the Keystone State. The Pennsylvania Wilds is located right in the heart of the Marcellus, stretching through the Northern Tier counties of Cameron, Clarion, Clearfield, Clinton, Elk, Forest, Jefferson, Lycoming, McKean, Potter, Tioga and Warren. According to the report, visitors continue to spend roughly $1.7 billion in the region. And thanks to increased 2014 business activity directly attributable to the Marcellus, “the region had the second highest proportion of traveler dollars spent on transportation.”
And in Southwestern Pennsylvania, some of the most heavily drilled counties in the state — Allegheny, Armstrong, Beaver, Butler, Greene, Indiana, Lawrence, and Washington — have consistently “had the third highest level of traveler spending level of the state’s 11 tourism regions” with traveler spending increasing by 1.7 percent from 2013 to 2014. In fact, according to the report,
“The region had the second largest increase in the dollar amount of traveler spending between 2013 and 2014, and ranked fourth in the percentage increase among the state’s tourism regions.”
Quite simply, the claim that a state’s tourism industry will be negatively impacted by allowing another industry to operate is without merit. In fact, in states that have allowed fracking and rely on tourism as a major economic driver — like Texas, North Dakota, and Pennsylvania — the exact opposite is true. The oil and gas and tourism industries are not merely co-existing in each of these states – they are both thriving.