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Oil, Gas Activity Boosts North Dakota, Texas Economies

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Oil, Gas Activity Boosts North Dakota, Texas Economies

North Dakota experienced the largest increase in real gross domestic product (GDP) out of all the U.S. states in 2012 thanks to oil and gas exploration and production activity, the U.S. Bureau of Economic Analysis (BEA) reported Thursday.

North Dakota's real GDP grew 13.4 percent last year, higher than the U.S. real GDP by state growth of 2.5 percent in 2012 and 1.6 percent increase recorded in 2011. The mining industry, which includes oil and gas, contributed 3.26 percentage points to the state's real GDP growth, BEA reported.  

Although mining was not a major contributor to real GDP growth for the United States, it was a large contributor in North Dakota and Texas, which has seen a surge in activity in the Eagle Ford shale play and in the Permian Basin, and in West Virginia, according to BEA's June 6 report.

Durable goods manufacturing, which includes the manufacturing of oil and gas equipment, was the largest contributor to U.S. real GDP by state growth last year. Durable goods manufacturing grew 9.1 percent in 2012, compared with a 6.8 percent increase in 2011, and was the leading contributor to real GDP growth in seven of the eight BEA regions and in 22 states.

Finance, insurance and wholesale trade were other leading contributors to real U.S. economic growth last year. The District of Columbia and every U.S. state except Connecticut saw their real GDP grow in 2012, BEA reported.

Unconventional oil activity in the Bakken and Eagle Ford plays not only has boosted economic growth in North Dakota and Texas, but has played a significant role in reversing the decline previously seen in U.S. oil production.

Last year, the Eagle Ford shale play in South Texas had an economic impact of $46 billion and supported over 86,000 jobs in the 14-county area where Eagle Ford activity is higher, according to a March report from the University of Texas at San Antonio's Center for Community and Business Research.

The boom in Bakken and Permian Basin activity not only is fueling economic growth in North Dakota and Texas, but population growth in North Dakota and Texas from 2011 to 2012, the U.S. Census Bureau reported in March.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at


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