The economic benefits to the United States from the energy industry have more than doubled in just the past ten years, even after accounting for inflation, according to a new study by The Perryman Group. The growth in the industry is worth about $1.2 trillion in gross product each year, the study noted, adding that the growth in the oil and gas industry since the economic recession has been “dramatic.” In fact, since the start of the economic recovery, the energy industry has contributed about 30 percent of the total job growth for the nation, Dr. Ray Perryman, president and CEO of The Perryman Group, said.
While it is generally recognized that a thriving oil and gas sector helps to create new jobs within and outside of the energy sector, it is less well-recognized just how important the industry is to overall employment. However, the study shows just how large a role the energy industry plays in the number of new jobs in the country.
When the multiplier effect was added to the number of jobs directly generated by upstream activity in the industry, there were 9.3 million jobs – or 7 percent of the overall economy – generated in the United States, according to The Perryman Group study. That is about 7 percent of the overall economy.
Crude oil production levels are as high as they were in the late 1980s, and they are still climbing. U.S. production was nearly 2.4 billion barrels in 2012, and climbed to 2.7 billion in 2013. By the end of 2014, the United States is likely to be the world’s largest crude oil producer, Perryman said.
The run-up in production in recent years was tied to the combination of horizontal drilling with hydraulic fracturing in shale formations, the study said. It noted that in North Dakota, which is still developing the support industries more commonly seen in states with historically high oil production, the industry has contributed more than 100,000 of the state’s 500,000 jobs, thanks to oil and gas production in the Bakken Shale.
Unsurprisingly, Texas, a state with substantial fossil fuel reserves and a long history of oil production, has realized the greatest total economic benefits from the current energy boom. The Barnett Shale, the Permian Basin and the Eagle Ford shale formation all contribute significantly to the overall job picture of the state.
Oil and gas exploration and production in 2014 accounts for nearly 3.8 million jobs in Texas, while contributing more than $472.5 billion in gross product, the study showed. Oklahoma was the state that benefitted the most behind Texas, with nearly 875,000 jobs coming from upstream oil and gas operations, while gross product in the state was more than $111.5 billion dollars.
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