Report: Nearly 1 in 10 New U.S. Jobs Created by Oil and Gas Development
The development and delivery of enormous volumes of clean-burning energy from shale has been and continues to be a major bright spot for the U.S. economy. So bright, in fact, that the Switzerland-based World Economic Forum is singing the praises of the American oil and gas sector to a global audience.
In a report released today, the WEF says the oil and natural gas sector added 9% of all new U.S. jobs last year. That’s 37,000 direct jobs, plus another 111,000 “indirect and induced” jobs. That’s a “multiplier effect” of three-to-one. The WEF report explains why:
First, the oil and natural gas industry makes significant capital investments in structures and equipment, thus generating positive effects throughout the economy. Since the United States is a leader in many aspects of the oil and gas industry supply network, a large portion of the dollars spent by the oil and gas industry support US job creation. … Second, the industry and its suppliers create particularly high-paying jobs … more than in the manufacturing, wholesale trade, education, finance and information technology sectors. High salaries result in relatively larger induced income effects for the US economy as a whole. (WEF report, p. 15)
For example, while the news is good for the U.S. oil and gas sector as a whole, it’s even better for those companies and communities actively involved in developing shale. According to the WEF report, for every one job created in the category of “shale,” as many as four new hires are made elsewhere in the economy. The study also reports that workers in the shale business generate between $218,000 and $317,000 in value-add for the economy, or two to three times the average for all other industries.
Then there’s the economic benefit of lower natural gas prices thanks to increased shale production:
Over the short term, economic models show that lower gas prices will help the larger economy in several measurable ways: a 1.1% increase in GDP in 2013; 1 million more jobs in 2014; and 3% higher industrial production in 2017 than would be anticipated without shale gas development. (WEF report, p. 9)
And the report predicts America’s oil and gas companies can still create more jobs, investment and economic growth, “despite the sluggishness of the overall economy.” In fact, the sector may grow nearly three times faster than the rest of the economy:
IHS forecasts that the oil and natural gas extraction industry will achieve average annual growth of 6.9% through 2015, compared to the overall real GDP growth forecast of 2.6%.
It also quotes U.S. Senator John Hoeven of North Dakota, one of the states atop the Bakken Shale, on what policies are needed to ensure the continued responsible development of oil and gas in America and abroad:
The key to unlocking the energy potential of the planet is creating an environment that attracts private investment, promotes innovation and deploys new technologies to maximize all of our energy resources, both traditional and renewable. That requires reliable, predictable and sensible policies. Robust energy development can generate revenues for nations, enabling them to fund their priorities; it can broaden their economic base and create jobs; and most importantly, it can help feed, clothe, shelter and employ a growing world population. (WEF report, p. 13)