The People of America's Oil and Natural Gas Indusry

(Every) Job Counts

Mark Green

Mark Green
Posted December 5, 2013

America’s oil and natural gas industry is a top job creator – hence its total employment impact of 9.8 million jobs or 5.6 percent of total U.S. employment, according to PwC. That’s jobs in the industry itself and jobs that exist because of industry activity and investments. In a fair discussion of our industry’s ability to generate jobs and paychecks that benefit millions of Americans, basic economics teaches that they all count.

Some seem to miss that last point. A Washington Post Wonkblog piece focuses narrowly on jobs in oil and natural gas extraction and industry support activities. Yet, we know from North Dakota, Texas and other states that oil and natural gas development is fueling employment across a variety of sectors – employment that would be much smaller or non-existent without energy development. PwC found that for each direct oil and natural gas job, nearly three others were supported elsewhere in the U.S. economy. PwC:

The report’s findings show that the oil and natural gas industry has a widespread economic impact throughout all sectors of the economy and across all 50 states and the District of Columbia. These impacts result directly from the employment and production within the oil and gas industry, indirectly through the industry’s purchases of intermediate and capital goods from a variety of other US industries, and by the personal purchases of employees and business owners both within the oil and natural gas industry and out of the additional income in the supply chain to the industry and from dividends received from oil and natural gas companies.

More from PwC’s study:

Counting direct, indirect, and induced impacts, the industry’s total impact on labor income (including proprietors’ income) was $598 billion, or 6.3 percent of national labor income … The industry’s total impact on US GDP was $1.2 trillion, accounting for 8.0 percent of the national total …

Similarly, you’ve got to consider the impact of increased oil and natural gas development on other industry sectors, like manufacturing, plastics and chemicals. Demand for steel and equipment is increased because of oil and natural gas exploration and production. An IHS study recently projected that shale energy development will support 400,000 manufacturing jobs by 2015. There’s also economic benefit from the availability of more affordable energy. This makes all kinds of manufacturing less costly, more competitive and better positioned to expand (including adding jobs). According to IHS, unconventional development (fracking) alone supported 2.1 million jobs in 2012 and is projected to support 3.9 million jobs by 2025. 

Our industry is a dynamic job creator. Earlier this year the U.S. Energy Information Administration (EIA) noted that employment in the oil and natural gas industry increased 40 times faster than the rest of U.S. private sector employment from 2007 through the end of 2012. EIA’s chart:

eia_ong_job_growth

The point here isn’t so much about numbers. It’s about real-world impact – the big picture in our country right now that’s being crafted by the ongoing U.S. oil and natural gas revolution. It’s a renaissance responsible for real jobs – including many high-wage jobs in our industry and others – that are being held by real people.

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.