Study finds 600,000 more jobs supported by oil, gas

The US oil and gas industry supported 9.8 million American jobs in 2011, an increase of more than 600,000 jobs in just 2 years, a PricewaterhouseCoopers study commissioned by the American Petroleum Institute found. “If we get our policies right, we can create hundreds of thousands more,” API Pres. Jack N. Gerard said. “That’s the message we’re taking to members of Congress as they go home for the August recess.”

During an Aug. 1 teleconference, Gerard told reporters, “The report confirms what we already know—that America’s 21st century energy revolution is driving our economic recovery. API will continue to work with elected officials during the recess to get policies right. We’ll also continue our advertising campaigns and work with our grassroots network which now numbers more than 15 million Americans.”

He continued, “It would be tragic to abdicate our responsibility to grasp this opportunity and let this country slip back into making policies which don’t reflect its bright energy future.”

The study considered three economic channels for jobs, salaries, and value-added impacts from fulltime and part-time positions: direct (within the industry itself), indirect (from the industry’s supply chain), and induced (from household spending of income earned directly or indirectly from oil and gas industry spending).

It also quantified operational impact (from purchases of goods and services, salaries, and dividends) and capital investment impact (from investments in new structures and equipment) nationally, with details on the industry’s operational impact state-by-state.

Employment impact

The study found that the oil and gas industry’s total employment impact to the national economy in 2011, combining the operational and capital investment impacts, amounted to 9.8 million fulltime and part-time jobs and accounted for 5.6% of total US employment.

Nationally, each direct oil and gas job supported 2.8 jobs elsewhere in the US economy that year, the most recent one for which figures were available, it added.

Counting direct, indirect, and induced impacts, the study found that the industry’s total labor income impact (including proprietors’ income) was $598 billion, or 6.3% of national labor income in 2011. It said the industry’s total impact on the US gross domestic product that year was $1.2 trillion, accounting for 8% of the national GDP total.

Among emerging producing states, Pennsylvania added 64,000 direct, indirect, and induced oil and gas jobs from 2009 (276,000) to 2011 (339,000), while North Dakota’s total grew by 27,000 positions from 2009 (37,000) to 2011 (64,000), a comparison of the two studies found.

Gerard said API will urge officials to support increased access to federal acreage offshore, reforms of the federal Renewable Fuels Standard, and approval of the proposed Keystone XL crude oil pipeline’s cross-border permit.

Obama’s Keystone estimates

It released the study several days after US President Barack Obama cited a Cornell University study’s conclusion that the project to transport crude oil from Alberta to US Gulf Coast refineries would create 2,000 jobs initially, with only 50-100 permanent positions (OGJ Online, July 30, 2013).

“I think we were all shocked by what the president said. It’s just not factually accurate,” Gerard said on Aug. 1. “Keystone XL’s southern leg, which he has approved and expedited, is only about one third of the total project, and it has already created more than 4,000 jobs. It’s virtually impossible to make a $7-8 billion investment, and only create 50 jobs.”

He said an announcement earlier in the day by TransCanada Corp., Keystone XL’s sponsor, that it plans to build an additional pipeline to Eastern Canada shows that crude oil produced from Alberta’s oil sands will find its way to markets (OGJ Online, Aug. 1, 2013).

“The question now is whether costs to consumers will rise because of other projects and new requirements that aren’t really necessary,” Gerard said. “Over 70% of the American public recognizes that the Keystone XL pipeline is in the national interest, and their elected representatives in Congress are saying so.”

He said, “It’s so disappointing seeing the president’s conversation acting so cavalierly about these jobs. The Mount Rushmore monument was built with temporary jobs. So was the US Capitol. The great irony was as the president was pooh-poohing these jobs, he was also talking about the need to improve our national infrastructure. I hope we get past this distraction and resume serious conversations about this important project.”

Contact Nick Snow at nicks@pennwell.com.

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