Oxford Economics: Oil and Natural Gas Is Driving U.S. Economic Growth Across Sectors
Fueled by record-setting oil and natural gas production, the U.S. extraction sector is poised to grow faster than any other industry this year, according to a new analysis by Oxford Economics.
The research firm predicted that the oil, natural gas and mining sector could grow up to 7 percent.in 2019 thanks to strong capital spending and investments in production.
The report examined 254 U.S. industries rolled into 70 sectors. Extraction surpassed sectors that have previously been touted as the U.S. economy’s best growth opportunities, including the information sector and professional, scientific and technical services industries.
‘A Rising Tide Lifts All Boats’
As CBS News noted, a strong oil and natural gas industry promotes growth across a variety of sectors and industries, such as petrochemicals, transportation and warehousing:
“It bolsters the production of resins and rubbers in the chemicals sector, which is the fourth-fastest growing industry, according to Oxford Economics, while pipeline production helps the transportation industry.”
Texas provides just one example of the indirect impact and growth derived from the rise of oil and natural gas. As hydraulic fracturing boosted output to new records between 2009 and 2018, Texas manufacturing output increased 50 percent. Shale gas not only pushed business growth but created cost efficiencies; shale gas reduced costs of U.S. chemical companies by 8 percent.
Darren Woods, ExxonMobil Chairman and CEO, described the waterfall effect of growth from oil and gas most aptly:
“The United States is a leading producer of oil and natural gas, which is incentivizing U.S. manufacturing to invest and grow…We are using new, abundant domestic energy supplies to provide products to the world at a competitive advantage resulting from lower cost and abundant raw materials. In this way, an upstream technology breakthrough has led to a downstream manufacturing renaissance.”
The Oxford analysis confirms the positive impacts of the shale revolution that other reports have similarly found. According to a study commissioned by the U.S. Chamber of Commerce’s 21st Century Energy Institute, the growth in the oil and gas industry has already resulted in 1.7 million new jobs and is projected to create a total of 3.5 million jobs by 2035.