Kemp: Oil Producers' Under-Appreciated Role in US Economy

Kemp: Oil Producers' Under-Appreciated Role in US Economy
The states at the heart of the American shale oil revolution all grew faster than the US national average over the last decade, underscoring the importance of oil production to the US economy.

Reuters

John Kemp is a Reuters market analyst. The views expressed are his own

LONDON, Jan 21 (Reuters) - The eight states at the heart of the American shale oil revolution all grew faster than the U.S. national average over the last decade, according to the U.S. Bureau of Economic Analysis (BEA), underscoring the importance of oil production to the U.S. economy.

Gross domestic product (GDP) attributable to private industry grew at a compound annual rate (CAGR) of 1.8 percent between 2002 and 2013 for the nation as a whole, after allowing for inflation.

But for the eight states at the centre of the shale oil revolution, all of which have increased their production by at least 20,000 barrels per day since 2008, private sector GDP growth has been much faster.

North Dakota's private industry achieved a spectacular CAGR of 7.4 percent while Wyoming (3.9 percent), Utah (3.8 percent) and Texas (3.4 percent) all grew roughly twice as fast as the rest of the country.

Private industry in the remaining shale oil states of Oklahoma (2.9 percent), Colorado (2.1 percent), New Mexico (1.8) and Kansas (1.8 percent) all grew at least slightly faster than the nation as a whole (http://link.reuters.com/sak83w).

Oil and gas production is deeply unfashionable among many policymakers, economists and journalists. It is still caricatured as an old-fashioned, low-technology, dirty and polluting industry which belongs to the past.


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