Study: Industry’s Broad Shoulders Support U.S. Economic Recovery
Posted July 20, 2021
Natural gas and oil are the energy foundation for U.S. economic growth, job creation and the opportunity for Americans to prosper all across the country. This is seen in a new analysis of our industry’s economywide and countrywide impacts:
- 11.3 million jobs supported in 2019 across all 50 states and the District of Columbia – generating 3.5 additional jobs elsewhere in the economy for each direct industry job. That accounts for 5.6% of total U.S. employment.
- Supported nearly $1.7 trillion to U.S. gross domestic product, or nearly 8% of the national total.
- Supported nearly $900 billion in labor income or 6.8% of U.S. national labor income.
The analysis by PwC commissioned by API is based on the latest available government data (2019). Like other industry and business sectors, our industry was hard hit by the economic effects of the 2020 pandemic, but the 2019 data – generated during a period of robust U.S. growth, indicates the importance of the natural gas and oil industry post-pandemic, as the U.S. and global economies and petroleum demand ramp up. The U.S. Energy Information Administration projects (EIA) that 2022 global oil and liquid fuels demand will eclipse 2019 levels.
Given EIA’s forecast, it’s critically important that national policy supports – and doesn’t hinder – domestic natural gas and oil production. API President and CEO Mike Sommers:
“As America’s economy comes back, the natural gas and oil industry will serve as the foundation for long-term growth and prosperity. Every state across the country – both blue states and red states – relies on American energy to fuel each sector of the economy and support millions of U.S. jobs. This study reinforces that America’s economic outlook is brighter when we are leading the world in energy production, and it serves as a reminder of what’s at stake if policymakers restrict access to affordable, reliable energy and make us more dependent on foreign sources.”
Unfortunately, the Biden administration this year has pursued a number of policies that could curb North American natural gas and oil production and transportation.
New natural gas and oil leasing on federal lands and waters was suspended early in the year – an indefinite pause that if continued could have significant effects on production, economic growth, jobs and U.S. reliance on imported oil.
The administration canceled the Keystone XL pipeline, which could impact North American production that historically put downward pressure on crude oil costs and ultimately benefited consumers.
Proposals bandied about in Washington, to single out our industry for tax hikes, could have a dampening effect on investment in production and critical infrastructure.
Meanwhile, in place of policies that would support natural gas and oil production here at home, the administration recently pinned its hopes for increased global oil supply on OPEC+.
This “import more oil” approach is at odds with the demonstrated ability of American natural gas and oil to support growth, jobs and increased self-sufficiency, strengthening our security.
Bear in mind that industry’s support for every job, every dollar earned has a face – those of millions of Americans who work in natural gas and oil or in other lines of work that are supported by our industry. These translate into state and local benefits – in states that are big oil and gas producers as well as the others. For example:
Ohio – Industry directly and indirectly supported more than 375,000 jobs in the state in 2019, provided more than $24.6 billion in wages and contributed more than $58.7 billion to the state’s economy. Chris Zeigler, API Ohio executive director:
“Delving deeper into the results, we learn that Ohioans enjoy more than just plentiful, reliable and affordable energy. Our industry creates opportunity, boosting local businesses, driving important research and development, and promoting education and training. This has never been more important, as our nation emerges from a pandemic, hungry for the economic development that the oil and gas industry so ably supports.”
Texas – Industry directly and indirectly supported more than 2.5 million jobs in the state, provided more than $251.1 billion in wages and contributed more than $411.5 billion to the state economy. Texas Oil and Gas Association President Todd Staples:
“Texans understand the essential nature of oil and natural gas, and this analysis confirms the indispensable role the industry plays in providing jobs and investment that benefits every community and all Texans. As the leaders in domestic energy production, our member companies’ efforts ensure reliable products are available to power modern America and serve as the underlying foundation of Texas public school, university and public infrastructure funding.”
New Mexico – Industry directly and indirectly supported nearly 115,000 state jobs, provided more than $6.8 billion in wages and contributed more than $18.8 billion to the state’s economy. New Mexico receives more than 40% of its total revenue from taxes and royalties paid by local energy companies, helping to fund essential public services including health care, infrastructure and education. New Mexico Oil and Gas Association Chairman Leland Gould:
“New Mexico has enormous oil and natural gas potential, and we should continue to make this state a magnet for capital investment and job creation by prioritizing the development of these resources right here in our own backyard. People in every community and corner in New Mexico depend on oil and natural gas for daily energy needs and basic government services, and we’re ready to do our jobs to deliver these critical resources.”
Other state impacts, here.
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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