The People of America's Oil and Natural Gas Indusry

Public Resources and the Public Good

Mark Green

Mark Green
Posted June 25, 2015

The U.S. Interior Department is out with its Economic Report for Fiscal Year 2014 – which doesn’t sound like it would be a whole lot of fun reading. But the report actually contains some pretty important bits of information.

interiorFor example, you get a clear sense that Interior Department activities support jobs and economic growth, which are good things. Interior Secretary Sally Jewell called her department a “powerful economic engine.” More Jewell:

“Our parks and public lands support outdoor recreation, promote renewable energy and allow us to harness other domestic energy resources, create jobs and promote economic development in communities across all 50 states.”

It’s the “other domestic energy resources” that caught our eye. It’s almost impossible to read this blog without picking up on the point that we in the oil and natural gas industry believe increased energy activity in federal areas under Interior’s auspices – onshore and offshore – is vitally important to sustaining and growing America’s ongoing energy revolution. Judging from its own economic report, Interior should fully embrace that goal as well.

That’s because while various activities such as recreation at national parks and wildlife refuges, renewable energy produced by hydropower plants, grazing on federal lands and others generated significant economic output and supported lots of jobs, the development of oil, natural gas and coal on federal lands was even more significant. How much more? The charts below (drawn from Table 2-1 in the report) shows who’s providing the rack for Interior to hang their hat on, fiscally speaking:

econ

Oil, natural gas and coal development were responsible for the lion’s share of economic activity attributable to Interior in 2014. They accounted for $230 billion in economic output, or about 64 percent of the department’s total of nearly $360 billion. The next largest contributors were irrigation water ($43 billion) and recreation/tourism ($42.4 billion). Next, jobs:

jobs

Oil, natural gas and coal supported nearly 1.1 million jobs or 55 percent of Interior’s total. Recreation/tourism was a distant second at about 374,000 jobs.

Similar story for value added – which includes employee compensation, taxes on production and imports (less subsidies) and gross operating surplus. Oil, natural gas and coal provided $133 billion in value added, again about 64 percent of the department’s total, compared to $24.1 billion each for recreation/tourism and irrigation water.

Oil, natural gas and coal development were good for the U.S. economy – via Interior Department activities – in 2014. Energy development is a dynamic engine for economic growth and employment. Just ask the folks at Interior. They can be even better in the future with increased access to federal reserves and the right approaches to regulation and permitting – all leading to increased levels of safe, responsible development of public resources.

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.