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Stronger US economy and job growth

Hydrocarbon Engineering,


The American Petroleum Institute’s State of American Energy address can be read here and here.  

In this speech, API president and CEO Jack Gerard spoke of America’s place in the global energy economy and a new campaign by the association to ensure that America makes the most of its new found resources and position. A report was launched in partnership with the speech titled ‘America’s Energy, America’s Choice.’

Overview

The report America’s Energy, America’s Choice highlights that America can choose a future where the domestic oil and gas industry continues to contribute significantly to the country’s economic recovery and job creation. The report also highlights that the US has the opportunity to develop and utilise state of the art technology to safely discover, extract, and transport oil and natural gas. Finally, the API hopes that the report will point out that the US has the potential to become a global energy superpower.

Stronger economy and job growth

In 2011, the US energy industry provided US$ 1.2 trillion in GDP through being a major investor in the nation’s public and private sectors. The industry also supports approximately 8% of the entire US economy according to recent figures along with 9.8 million jobs, which accounts for 5.6% of total US employment.

The unconventional resource renaissance has had a significant impact on the disposable income of American households and, according to the report, ‘has lowered natural gas costs and increased disposable incomes by more than US$ 1200 per household.’ Not only is the energy industry supporting the individual but it is supporting the nation as a whole as the ‘oil and gas industry alone provides US$ 85 million a day to the government in the form of royalties, bonuses paid at lease sales and taxes.’

Domestic businesses are also receiving huge benefits from the oil and natural gas industry, according to the API report. The industry is ‘providing affordable energy and chemical feedstocks that can reduce operating and material costs throughout the value chain, which in turn, increases available capital, creates jobs, and allows companies to become more competitive with their international counterparts.’ Lower natural gas prices in the US are benefitting the national industrial output as a whole and according to IHS, by 2015 industrial output will rise 2.8% and by 3.9% by 2025.

State benefits today and tomorrow

The US refining industry has in particular provided support to communities across the country. Figures show that the refining industry alone supports 529 000 US jobs with those directly linked to the industry receiving an average annual income of US$ 111 542. Geographically, East Coast states are finding a new lease of life as lower cost domestic oil is helping the refineries rebound after the recession. States adjacent to the typical oil producing states such as Texas are also benefitting substantially from unconventional resources. ‘In 2012 alone, more than 38 000 Ohio jobs were supported by unconventional oil and natural gas activity.’ The jobs also contributed financially to the state as ‘while the average annual wage in Ohio was nearly US$ 55 000 in 2012, the average wage of direct jobs in unconventional natural gas activity was US$ 81 000.’

Colorado is another state highlighted in the report, which is benefitting from oil and natural gas developments. A study by the University of Colorado has found that ‘direct employment in the oil and natural gas industry was more than 51 000 in 2012 with annual wages averaging nearly US$ 75 000, which is about 50% higher than the average wage for all industries across the state.’ California is supported substantially by the oil and gas industry and currently 6.7% of the state’s economy and more than 793 000 jobs are supported by it. A study carried out by the University of Southern California last year discovered that 2.8 million new jobs could be created if oil extraction surrounding the Monterey Shale deposit was developed. So, the report clearly highlights that oil and natural gas is key to individual states, despite the amount of oil within its boarders.

Job growth and the economy in numbers

  • US$ 1200; average amount families’ disposable incomes increased in 2012 due to lower natural gas costs from unconventional development.
  • 529 000; number of US jobs supported by America’s refining industry.
  • US$ 4.1 billion; added economic activity due to oil and natural gas development in the state of Ohio in 2012.
  • 44.6%; effective tax rate amongst the oil and gas industry.
  • 166 000; the number of jobs the upstream industry alone predicted to be held by African American and Hispanic workers over the 2010 – 2020 period if the right policies are decided upon.
  • 78 000; the number of women who worked directly in oil and natural gas fields in 2011, more than a 60% increase since 2004.

Written by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/10012014/us_jobs_us_-growth33/


 

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