Oil and Natural Gas: America's Growth Industry
Posted August 14, 2013
The U.S. Energy Information Administration reports that oil and natural gas industry employment increased more than 162,000 jobs from the start of 2007 through the end of 2012 – a 40 percent surge. Yeah, that’s a big number. Here’s how big: EIA says total U.S. private sector job growth over the same period was just 1 percent. Hello, White House, jobs calling!
EIA uses Bureau of Labor Statistics job categories to account for oil and natural gas employment – which includes exploration, excavation, well surveying, casing work and well construction:
Both the support and drilling industries were heavily affected by the recession, but these industries have recovered quickly … Beyond within-sector employment, oil and gas industry activity also directly supports output and employment in other domestic sectors, such as suppliers of pipe, drilling equipment, and other drilling materials. In addition, as with other forms of economic activity, there are indirect employment effects stemming from purchases made by industry and employees spending of their incomes. Because employee expenditures are closely tied to their incomes, higher paying jobs, such as those in the oil and gas sector, tend to have larger indirect effects on output and employment than lower paying ones.
We mention the above to say this: America’s oil and natural gas industry is a dynamic job creator, with demonstrated ability to directly and indirectly lift other sectors (see Mark J. Perry’s post noting how our industry’s long supply chains allow it to help so many other industries.)
Every new job is needed, but the oil and natural gas industry is second to none in growing new jobs and stimulating the economy. So, if someone is disparaging our industry’s job-generating power, they’re missing the economic impact of 9.8 million jobs supported and $1.2 trillion added to the economy by oil and natural gas, according to a recent PwC study.
Some examples of industry activity that result in the figures cited by EIA and PwC:
Pennsylvania – Paul Driessen writes about the resurgent economy in the region around Williamsport due to natural gas development via hydraulic fracturing:
Men and women again have high-paying jobs, young people are coming back instead of moving away, their salaries are supporting other businesses and jobs, and many are taking college programs in oilfield technical and business specialties, Vince Matteo told me. As president and CEO of the Williamsport/Lycoming County Chamber of Commerce, he’s witnessed the transformation. “98 percent of the change has been positive,” he says. Contributions to United Way are increasing each year, county infrastructure has improved enormously, and environmental impacts are minimal.
Texas – Forbes contributor David Blackmon picks up on the benefit to the state’s infrastructure needs (read: jobs) provided by oil and natural gas development:
Texas State Comptroller Susan Combs was able to make the happy announcement that state receipts from oil and gas severance taxes had exceeded her projections for the first nine months of Fiscal Year 2013 by a whopping $900 million. … The good news for Texas is that the Rainy Day Fund is almost entirely funded by oil and gas severance tax collections … All told, the legislature was able to tap the almost exponential growth in the Rainy Day Fund for more than $7 billion to pay for a great variety of much-needed infrastructure projects.
(Good news for industry jobs: Some experts believe the Spraberry Wolfcamp shale play in West Texas and New Mexico could be the largest oil and natural gas discovery in the world, dwarfing prolific plays like Texas’ Eagle Ford and North Dakota’s Bakken.)
North Dakota – The Associated Press reports that high-paying jobs in the state’s oil patch boosted its average annual wage by 10 percent last year to nearly $46,000 – and up 73 percent from 2002 when the figure was $26,550. "We're seeing pretty incredible increases," Job Service North Dakota research analyst Michael Ziesch told AP.
Also from North Dakota, a piece in Gas, Oil & Mining Contractor magazine on oil and natural gas-related opportunities that have opened up for female entrepreneurs. Neset Consulting Service, based in Tioga, provides geological and natural gas detection services to Bakken operators. President Kathy Neset has 180 workers. The magazine also mentions Gwen Bohmbach and Nellie Hofland, the founders of B&H On-Site Testing, which provides mobile drug testing services 24/7:
We saw the rapid changes with the oil industry, and so we didn’t hesitate to go forward,” Bohmbach says. Both had health care backgrounds and had grown up on western North Dakota ranches so they understood the remote conditions and challenges. They earned certification to do testing, and with the guidance of the Strom Center for Entrepreneurship and Innovation in Dickinson, they created a business plan, set up an LLC and took the other necessary steps to get a business loan.
Don’t forget that, beyond these entrepreneurs, recent estimates show nearly half of new oil and natural gas industry jobs are going to women. Our industry = opportunities for women. And men, too!
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. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. 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 have two grown children and six grandchildren.
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