Report: American Oil and Natural Gas Industry Responsible for 10+ Million Jobs
A new American Petroleum Institute report, prepared by PricewaterhouseCoopers, shows that America’s oil and natural gas industry touches the economy and labor force in every state in the country, contributing invaluable revenue and employment income to all 50 states.
Commenting on the data, API President and CEO Mike Sommers said the report encourages lawmakers to support continued growth in domestic energy production:
“America’s economic outlook is brighter when we are leading the world in energy production and this analysis serves as a reminder that we need policies and regulations that encourage investment and enable development.”
In addition to manufacturing products that power the greater economy, the data from 2021 show that the industry supports 10.8 million full-time and part-time jobs in all 50 states, making up 5.4 percent of the country’s workforce, and contributes nearly $1.8 trillion per year to the U.S. economy.
Oil and natural gas employment activity also acts as a multiplier for labor income, according to the report:
“At the national level, each direct job in the oil and natural gas industry supported an additional 3.8 jobs elsewhere in the US economy in 2021 (for a multiplier of 4.8). Counting direct, indirect, and induced impacts, the industry’s total impact on labor income (including proprietors’ income) was $908.7 billion, or 6.4 percent of the US national labor income in 2021.”
This is particularly true in states with significant natural resources and energy production. In five states – North Dakota, Wyoming, Oklahoma, Texas, and Louisiana – the oil and natural gas industry directly and indirectly supports between 11 and 15.5 percent of the state’s workforce. In another six states – Montana, Colorado, Kansas, New Mexico, Mississippi, and West Virginia – that figure falls between 6.7 and 11 percent.
Labor income is a major driver of the oil and natural gas industry’s total economic impact in a given state. In terms of total economic impact, Texas ranks “substantially above other states […] with 507,800 jobs, $100.9 billion of labor income, and $244.1 billion of value added contributed in 2021.” According to the Texas Oil & Gas Association’s 2022 Energy & Environmental Impact Report, the industry paid a record $24.7 billion in state and local taxes and state royalties in 2022. These funds go towards the state’s public schools, universities, roads, first responders, and other essential services.
In its coverage of the API report, Fox News pointed out that several other states most impacted by oil and natural gas production are ironically pursuing aggressively anti-fossil fuel policies – namely, California and New York:
“According to the analysis, the fossil fuel industry generated $454.5 billion for the Texas economy, the largest impact of any state, in 2021. The next three states whose economies were most-impacted by the industry were California, Pennsylvania and New York where producers generated $217.1 billion, $75 billion and $70.1 billion, respectively.” (Emphasis added)
Although California can attribute hundreds of billions in statewide economic activity to the oil and natural gas industry, the state continues to pursue policies that limit the production, refining, and sale of oil in the state, resulting in higher prices for consumers and increased dependence on foreign oil. Just in the last few months, California approved a rule that would ban new sales of gasoline-powered vehicles by 2035 and created a new agency to “investigate” unfounded price gouging allegations against the state’s few refiners.
And in New York, Gov. Kathy Hochul moved ahead with the “nation’s most aggressive ban on fossil fuels” in new buildings and home appliances in the state’s new budget. New York has also banned fracking statewide and has blocked the construction of natural gas pipelines for years, despite proximity to the Marcellus and Utica shale basins.
Bottom Line: The newest data from API and PwC show that the American oil and natural gas industry contributes to employment and economic growth in every state in the country – even in states where leaders are pursuing counterproductive policies that hamstring the industry and consequently raise prices for consumers.