- PwC U.S. — Economic Impacts of the Oil and Natural Gas Industry on the US Economy in 2011 http://www.api.org/~/media/Files/Policy/Jobs/Economic_Impacts_ONG_2011.pdf
- PwC U.S. — Economic Impacts of the Oil and Natural Gas Industry on the US Economy in 2009 http://www.api.org/~/media/files/policy/jobs/economicimpacts_of_industry_on_us_economy_in_2009.pdf
- Wood Mackenzie — U.S. Supply Forecast and Potential Jobs and Economic Impacts http://www.api.org/newsroom/upload/api-us_supply_economic_forecast.pdf
- IHS — America’s New Energy Future http://www.api.org/~/media/Files/Policy/American-Energy/Americas_New_Energy_Future_Mfg_Renaissance_Main_ Report_4Sept13.pdf
- American Chemistry Council — Shale Gas, Competitiveness, and New US Chemical Industry Investment http://chemistrytoenergy.com/sites/chemistrytoenergy.com/files/shale-gas-full-study.pdf
- Quest Offshore Resources — The Economic Benefits of Increasing U.S. Access to Offshore Oil and Natural Gas Resources in the Atlantic http://www.api.org/~/media/Files/Oil-and-Natural-Gas/Exploration/Offshore/Atlantic-OCS/Executive-Summary- Economic-Benefits-of-Increasing-US-Access-to-Atlantic-Offshore-Resources.pdf
- IHS — Minority and Female Employment in the Oil & Gas and Petrochemical Industries http://www.api.org/news-and-media/news/newsitems/2014/mar-2014/~/media/Files/Policy/Jobs/IHS-Minority-and- Female-Employment-Report.pdf
- Crew Change: Millennials Hit the Oil Patch – Business Week http://bit.ly/1waw0lN
- Study of Construction Employment in Marcellus Shale Related Oil and Gas Industry 2008-2014 http://bit.ly/1waw0lN
- Oil and Gas Industry Economic and Fiscal Contributions in Colorado by County, 2008–2012 http://bit.ly/1t2HjwO
- Oil and Natural Gas Stimulate American Economic and Job Growth – Vendor Survey Findings Rep http://bit.ly/1wax3C1
- The Impacts of U.S. Crude Oil Exports on Domestic Crude Production, GDP, Employment, Trade, and Consumer Costs http://bit.ly/1o0fUF3
- The Impacts of U.S. Crude Oil Exports on Domestic Crude Production, GDP, Employment, Trade, and Consumer Costs – Supplement: State-Level Economic and Employment Impacts http://bit.ly/1waz29z
The United States is the world’s leading producer of oil and natural gas, and as a result of greater use of clean-burning natural gas and cleaner, more efficient fuels, we are also a world leader in reducing carbon emissions and other air pollutants. We have a proven model for achieving environmental progress without sacrificing jobs, economic growth, energy security or consumer affordability. Our political leadership has the opportunity to continue, and expand upon, the American energy revolution.
In the past decade alone, technological advances in oil and natural gas production have ushered in a new era. American crude oil production jumped 88 percent between 2008 and 2015, and natural gas production increased 48 percent since 2005. The turnaround has helped reduce gasoline prices, fuel imports, and heating and electricity costs for households and businesses, while at the same time cutting carbon emissions from energy to near 20-year lows. Technological improvements are not just limited to production; between 1990 and 2014, U.S. refiners spent $154.4 billion on environmental improvements– helping contribute to cleaner air.
These technological advances have moved us from an era of energy scarcity to one of energy abundance in a few short years, and Washington can make energy policy choices that will continue our national progress, such as:
- Implementing policies that recognize our energy reality, both today and tomorrow, and are based on sound science and economics.
- Embracing our new era of American energy abundance and protecting the progress made, avoiding a return to decades of insecurity and scarcity.
- Seizing the career opportunities that the oil and gas sector provide to a diverse American labor force with the potential to break the cycle of generational poverty.
- Insisting our government regulatory systems perform their duty of protecting the public in a timely and efficient manner; avoiding unnecessary, duplicative rules that place undue burdens on energy development and distribution.
- Recognizing the best way to achieve our energy and environmental goals is not with government mandates, but through private innovation and investment, in cooperation with governments at all levels.
American energy is working and the goal of a national energy policy must be to ensure a secure supply of abundant, affordable, and available energy for the American people in an environmentally responsible manner.
When U.S. workers look at employment opportunities in the oil and natural gas industry, they see the potential to enter an industry characterized by higher than average wages, a variety of fields in which to specialize, and a commitment to diversity. The industry supports careers in numerous fields, from mechanic to geophysicist, electrician to soil scientist, and rig equipment operator to petroleum engineer. While the industry offers job opportunities in such highly specialized areas as botanist and marine biologist, equally essential are blue-collar positions such as truck drivers and machinists. A wide variety of jobs exist within the industry, and all of them play an important role in meeting our consumers’ energy needs.
Looking to the future, employment opportunities in the industry will increase dramatically as the baby boomer generation of workers in the industry begins to retire. This large demographic shift, referred to in the industry as the “Great Crew Change,” could see up to 50 percent of the oil and natural gas industry’s skilled workers retire within the next five to seven years. As this begins to occur, more and more young workers will have opportunities to begin fulfilling careers in the industry. As one Texas entrepreneur put it the shale boom has “created a lot of opportunity for young professionals to jump in and be given enormous responsibility”.
US Lower 48 Employment Contribution due to the Unconventional Activity Value Chain: Base Case*
(Number of workers)
|Upstream Energy Activity||360,456||537,663||850,485||1,748,604|
|Midstream and Downstream Energy Activity||116,342||86,108||121,198||323,648|
|Energy-Related Chemicals Activity||17,310||16,002||19,941||53,252|
|Upstream Energy Activity||505,895||770,441||1,234,327||2,510,663|
|Midstream and Downstream Energy Activity||81,581||61,298||85,954||228,832|
|Energy-Related Chemicals Activity||45,697||46,324||56,701||148,722|
|Upstream Energy Activity||600,420||915,788||1,468,960||2,985,168|
|Midstream and Downstream Energy Activity||26,386||19,636||27,509||73,530|
|Energy-Related Chemicals Activity||58,110||101,682||117,564||277,356|
|Upstream Energy Activity||724,379||1,074,155||1,700,144||3,498,678|
|Midstream and Downstream Energy Activity||20,611||15,161||21,216||56,989|
|Energy-Related Chemicals Activity||60,391||120,330||138,027||318,748|
NOTES: Numbers may not sum due to rounding.
*The unconventional activity value chain represents the sum of unconventional oil and natural gas value chains and energy related chemicals.
Source: IHS Economics
When vast swaths of the U.S. economy were shedding jobs during the recession, employment growth in oil and natural gas industry professions was one of the bright spots in the economy. Why? Because of large innovations and larger investments in developing energy from shale. In the Marcellus Shale alone, between 2012 and 2013, there was a 40 percent increase in jobs in eight trades (union and non-union members included).
Business consulting firm IHS has taken an in-depth look at the economic impacts of U.S. unconventional oil and natural gas development and found that the development of energy from shale and other tight formations supported 2.1 million jobs in 2012. With policy choices that support safe and responsible development the full unconventional value chain — the oil and natural gas industry’s upstream, midstream and downstream sectors and energy-related chemical industries — could support 3.3 million jobs by 2020 and nearly 3.9 million by 2025.
With the right policies the U.S. is looking at significant job creation from energy developed with hydraulic fracturing and horizontal drilling. This includes the oil and natural gas industry itself, sectors that support the industry with materials, supplies and equipment and areas that benefit as workers and families in these groups pay for housing and buy food, clothing and consumer goods.
Based on federal data, the average annual pay in the oil and natural gas industry is more than $100,000 – nearly $50,000 higher than the 2014 U.S. average. That’s good news, and even better news is the fact that the oil and natural gas industry will offer employment opportunity for women and minorities over the next couple of decades according to a 2016 report by consulting firm IHS, which projects significant job gains for women, African Americans and Hispanics between now and 2035. Here are some of the principle findings:
- Nearly 1.3 million job opportunities by 2025 and close to 1.9 million job opportunities by 2035 in the oil & natural gas and petrochemical industries considering all types of job growth.
- 707,000 jobs, or 38% of the total, are projected to be filled by African American and Hispanic workers through 2035. (131,000 for African Americans and 576,000 for Hispanics).
- Women in the industry are projected to account for more than 290,000 of the job opportunities, 16% of the total through 2035.
“The magnitude of these opportunities speaks to the continuing importance of the oil & natural gas and petrochemical industries in the U.S. economy as a whole as well as to individuals and families looking for well-paying career opportunities. As seen in this report, minority communities and women represent critically vital and available talent pools to help meet the industry’s future workforce demands.” —IHS
OPPORTUNITIES FOR MINORITIES
- The share of minorities employed in the oil & natural gas and petrochemicals industries is rising: Minority employment will rise from about one-quarter of the total in 2015 to more than one-third (36%) in 2035.
- African American and Hispanic workers are projected to make up over one-fourth of the new hires in management, business, and financial jobs in the industry through 2035.
- Meaningful career opportunities also exist in the industry for other minority groups, such as Native Americans and Asian Americans. For example, in 2011 an estimated 20% of known U.S. oil and natural gas reserves were beneath tribal lands, with the Department of the Interior estimating that Indian lands could produce up to 5.35 billion barrels of oil and 37.7 trillion cubic feet of natural gas.
OPPORTUNITIES FOR WOMEN
- There are already more than 237,000 women working in the oil & natural gas and petrochemical industries. Nearly half of those women (over 114,000) work in management and professional occupations.
- IHS projects continued opportunity for women in management and professional fields, with women accounting for 154,000 of these job opportunities through 2035.
- Much of the job growth is projected to occur in blue collar professions. There is significant potential for female blue collar employment if interest and training are directed toward women to increase female participation in those areas.
OPPORTUNITIES BY OCCUPATION
- Fifty-seven percent of the job opportunities through 2035 are projected to be in blue collar occupations. This suggests tremendous opportunity for workers with a high school diploma and some post-secondary training (e.g., certificates and community college).
- One-third of the job opportunities are projected to be in management and professional fields such as engineering, geoscience, management, finance, and as technicians. African Americans, Hispanics, and women who successfully complete college degrees in these fields would be highly competitive for workforce placement.
America’s vast offshore energy reserves present an opportunity to improve our economy, increase our energy security and create tens of thousands of jobs. Opening the U.S. Atlantic Outer Continental Shelf (OCS) alone to offshore oil and natural gas development could create nearly 280,000 new jobs along the East Coast and across the country, as well as result in an additional $195 billion in new private investment and contribute billions per year to the U.S. economy.
Oil and natural gas production off our Atlantic coast is a potential gold mine. Developing oil and natural gas in the Atlantic could put hundreds of thousands of Americans to work, make us more energy secure, and bring in needed revenue for the government. But none of these benefits will appear unless the federal government follows pro-development energy policies.
In January 2015, the Obama administration proposed a limited offshore leasing program to develop resources in the Gulf of Mexico, off the coast of Alaska and along the Atlantic OCS. Americans stand to benefit if the Atlantic and other offshore areas that have been kept off-limits are included in the next five-year leasing program.
North Carolina has abundant offshore energy resources that have the potential to create thousands of jobs, produce much-needed revenue and move us closer to energy independence. — Governor Pat McCrory
|Net Jobs in…||Northeast||South||Midwest||West|
|Jobs “originating” in region1||88,342||668,859||171,657||218,048|
|Net jobs due to investment in other regions||52,313||(108,857)||67,434||(10,890)|
|Net jobs in region||140,654||560,001||239,092||207,158|
Source: IHS, “Oil & Natural Gas Transportation & Storage Infrastructure: Status, Trends, & Economic Benefits,” December 2013
- The phrase “Jobs originating in this region” is shorthand for “U.S. jobs supported as a result of direct capital investment made in this U.S. Census Region”
- Each arrow shows the net redistribution of jobs between two regions
America’s energy infrastructure system is critical to the efficient movement of crude oil and natural gas to refineries and to businesses and consumers as end customers. Keeping that infrastructure current for today’s energy realities will be among the energy choices facing policymakers in 2014 and beyond. Surging production in the Northeastern U.S., remote locations like the Bakken region and the Canadian oil sands require not only expanded transportation capacity but a wholesale redesign of the energy infrastructure network. Relative to today’s production realities, the existing energy transportation system is virtually upside down, and righting it will eliminate costly inefficiencies as well as generate substantial economic growth.
Updating infrastructure to our new energy reality could, per an IHS study, generate an estimated $1.15 trillion in capital investments between 2014 and 2025. These investments in midstream and downstream infrastructure — including pipelines, storage, processing, rail, and marine components — will ripple through the U.S. economy creating jobs, increasing GDP and labor income, and boosting tax revenue to federal, state, and local governments. Midstream and downstream infrastructure investment could support as many as an estimated 1.15 million jobs on an average annual basis over the 2014-2025 period, adding up to $120 billion on average per year to the economy and generating up to $27.5 billion in average annual revenue to the government. Pipeline investment alone could support up to 830,769 jobs on an average annual basis over the 2014-2025 period.
America is in the midst of an energy revolution and for American workers, the best is yet to come. The export of liquefied natural gas — or LNG — represents one of the most promising economic opportunities of the shale revolution. These exports will significantly reduce our trade deficit, increase government revenues, grow the economy, and support millions of U.S. jobs in engineering, manufacturing, construction, and facility operations.
The opportunities associated with LNG exports will extend beyond natural gas-producing states, and the economic impacts could be substantial in many areas. According to ICF, by 2035:
America is in a global race to build this infrastructure and secure a competitive position in the international market. More than 60 international LNG export projects are currently planned or under construction around the world, and those nations that act quickly to attract these investments will reap the economic rewards.
Fortunately, U.S. workers are in a very good position to win that race.
Note 1: Excludes multiplier effect (or induced) employment impacts.
Note 2: A job-year represents a single job occurring over 12 months or equivalent amounts of employment, such as two jobs occurring for six months each.
There is a growing realization that this is a new era for American energy. Scarcity is giving way to abundance, and restrictions on exports limit our potential as a global energy superpower. Additional exports could prompt higher production, generate savings for consumers, and bring more jobs to America. The economic benefits are well-established, and policymakers were right to lift 1970s-era trade restrictions that no longer make sense.
A report from early 2014 estimated national benefits from crude exports, including: $5.8 billion in consumer savings a year between 2015 and 2035 due to falling costs for gasoline, heating oil and diesel; up to 300,000 additional jobs created in 2020; a $22 billion decrease in the U.S. trade deficit in 2020; economic growth totaling as much as $38 billion in 2020; and an increase of as much as $13.5 billion in federal, state and local government revenues in 2020.
Individual states could see significant job creation and economic growth from exporting U.S. crude oil, according to a follow-up study. Specifically, 18 states could realize more than 5,000 new jobs each in 2020 from crude oil exports, with state economies growing by hundreds of millions of dollars each. States with significant manufacturing and consumer spending, such as California, could add nearly 24,000 jobs and more than $2 billion in economic activity in 2020. New York, an international hub for trade and finance, could add more than 15,000 jobs and $1.95 billion in economic activity in 2020.
The U.S. is a world leader in oil production and access to foreign customers will create economic opportunities across the country. When it comes to crude oil, the rewards of free trade are not limited to energy-producing states. New jobs, higher investment, and greater energy security from exports could benefit workers and consumers from Illinois to New York.
1 Data includes NAICS code 324 which may count some coal product manufacturing jobs.
Sources: Bureau of Labor Statistics, Quarterly Census of Employment and Wages (preliminary data for 2013, accessed July 2014); PriceWaterhouseCoopers, Economic Impacts, 7/12/13 (based on 2012 IMPLAN database) http://www.api.org/~/media/Files/Policy/Jobs/Oil-Gas-Stimulate-Jobs-Economic-Growth/API-Vendor-Survey-Findings-Full-Report.pdf
One way to measure the positive impact of America’s oil and natural gas industry is the 9.8 million jobs it supports nationally, accounting for 5.6 percent of total U.S. employment. Another way to look at our industry’s economic breadth is the size and diversity of supporting businesses, reaching into every state in the union and the District of Columbia. Even if there isn’t an oil or natural gas well site near where you live, chances are good a business that supports the oil and natural gas industry is.
Oil and natural gas companies are only one part of a much larger economic success story that is creating job growth up and down the supply chain. Thanks to innovations in horizontal drilling and hydraulic fracturing, America’s potential as an energy superpower is growing, and businesses of all types are growing with it. From the folks who make work gloves to environmental consultants, a vendor supply survey shows over 30,000 operators, contractors, service companies, suppliers and other vendors that support oil and natural gas operations, and this is just a small cross-section of the opportunities created by America’s energy revolution.
Taken together, these vendors and service providers are part of the often overlooked economic growth behind American oil and natural gas, and their success is critical to our energy security and our economy.
Just looking at Colorado in 2012, another study found that, oil and natural gas activity supported nearly 94,000 jobs in the state and created more than $23 million in state economic activity. This paid $3.2 billion in labor income in 2012 to direct industry workers who earned twice the average wage for all industries in the state. In addition to direct employment in Colorado, the oil and gas activity led to additional indirect and induced employment as the oil and natural gas activity ripples through virtually all sectors of the Colorado economy.
The Colorado study shows the broad benefits of oil and natural gas development in a state rich in energybearing shale, safely accessed with advanced hydraulic fracturing and horizontal drilling. It’s the American energy revolution viewed at the state level, but the benefits are not isolated to traditional energy states, they are being enjoyed nationwide.
Chicago Mayor Rahm Emanuel
“Cheap energy—the revolution that’s going on in America’s heartland on energy—is making sure that America now has a manufacturing renaissance.”
Virg Bernero, Mayor of Lansing, Michigan
“We’re all aware of the incredible impact the energy revolution is having on our national economy. The growing competitiveness and increase in employment from these manufacturing sectors are important to our cities and metro economies.”
“Right now our economy is booming due to the increased oil and gas activity here in town. We have great business opportunities here in Midland.”
“Mining, quarrying, and oil and gas extraction industries were the most rapidly growing part of our nation’s economy over the last several years.”
“This validates everything we’ve been trying to say about the potential of energy resources to recharge the U.S. economy. It’s coming and it’s real and it will have an impact.”
Jerry Zeiders, plant manager for Gardner Denver (PA), which makes and fixes pumps used in the Marcellus Shale
“We will be adding more jobs this year … We are going to continue to grow. We have just scratched the surface of the things we can do in the Northeast.”
“It’s not always the job on the rig or the well. There’s a whole host of jobs other than the guy who’s actually fracking. … A lot of people who were out of work during the recession are now working because of oil and gas, and energy in general.”
“This region is experiencing an uptick in interest from international manufacturers interested in leveraging our low-cost, politically stable supply of natural gas as a fuel source for their manufacturing processes and our immediate proximity to the U.S. (Western Hemisphere) markets.”
|Operational Impacts by State1||Employment2||Labor Income3||Value Added4|
|Number||% of State Total||$ Million||% of State Total||$ Million||% of State Total|
|District of Columbia||13,700||1.7%||$1,427||1.3%||$2,703||1.9%|
|U.S. Capital Investment5||1,388,100||0.7%||$82,247||0.9%||$135,837||0.9%|
|U.S. Total Impacts||9,833,200||5.6%||$597,615||6.3%||$1,209,389||8.0%|
Source: PWC, “Economic Impacts of the Oil and Natural Gas Industry on the US Economy in 2011,” July 2013, prepared for API using the IMPLAN input-output modeling system based on 2011 BEA data.
Numbers may not add to totals due to rounding.
- Operational impacts measure the oil and natural gas industry’s contribution due to purchases of intermediate inputs and payments of labor compensation and dividends. Due to data limitations, only operational impacts are available at the state level.
- Employment is defined as the number of payroll and self-employed jobs, including part-time jobs.
- Labor income is defined as wages and salaries and benefits as well as proprietors’ income.
- Value added refers to the additional value created at a particular stage of production. It is a measure of the overall importance of an industry. Value added consists of: employee compensation, proprietors’ income, income to capital owners from property, and indirect business taxes.
- Capital investment impacts measure the oil and natural gas industry’s contribution as a purchaser of new structures and equipment.