The People of America's Oil and Natural Gas Indusry

U.S. Oil and Natural Gas – Benefits Where You Live

Mark Green

Mark Green
Posted April 14, 2014

Much is written about the macro-economic effects of public policy, including energy policy. America’s oil and natural gas industry supports 9.8 million jobs – 5.6 percent of total U.S. employment – and contributes $1.2 trillion to national GDP, according to a study by PwC. But what about the state impacts? Over the next couple of weeks we’ll push out a series of posts focusing on selected states to examine energy’s more localize economic effects, as well as other energy-related issues.

Let’s start with Kentucky, where energy means jobs.

That same PwC study found that the oil and natural gas industry supported nearly 95,000 jobs in 2011, the most recent year for which comprehensive data is available. That represents 4 percent of the state’s employment total and includes 33,400 direct industry jobs.

The economic impact of that oil and natural gas industry employment in Kentucky is significant:

  • More than $4 million in labor income – wages, salaries and benefits, as well as proprietors’ income from jobs directly or indirectly supported by industry through operational spending, dividend payments and capital investments
  • More than $7.8 million in value added – additional value created at a particular stage of production including employee compensation, proprietors’ income, income to capital owners from property and indirect business taxes that are borne by consumers rather than producers

Kentucky ranks 22nd in crude oil production and 18th in natural gas output, according to the U.S. Energy Information Administration. Still, the industry is boosting the state’s economy – and with energy policies to increase access to reserves and by adopting a common-sense approach to regulation, safe and responsible energy development and associated activity in Kentucky can grow.

An IHS study projects that direct and indirect employment in Kentucky, just from unconventional oil and natural gas development (via advanced hydraulic fracturing and horizontal drilling), will increase from 10,000 jobs in 2012 to more than 16,500 by 2020 and more than 20,000 by 2035.

The point is even states that aren’t among the leaders in oil and natural gas production are benefiting and will benefit from energy development. Which is why sound energy policy is a necessity – for jobs, economic growth and strengthened energy security – no matter where you call home.


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.