America’s natural gas and oil industry will need to serve as a vital driver of the nation’s post-pandemic economic recovery, according to a new study.
The industry counts as critical to every sector of the U.S. economy and supports millions of jobs across all 50 states, says a study by PricewaterhouseCoopers that compiles the latest available government data.
The 134-page study, which explores the economic impact of the oil and natural gas industry, found that the business supported 11.3 million jobs and contributed nearly $1.7 trillion to the U.S. economy in 2019.
The study authors reported that the impacts are the result of three channels:
• Direct impacts from the employment and production within the oil and natural gas industry.
• Indirect impacts through the industry’s purchases of intermediate and capital goods from a variety of other U.S. industries.
• Induced impacts from the personal purchases of employees and business owners both within the oil and natural gas industry and its supply chain, as well as from the personal spending by shareholders out of the dividends received from oil and natural gas companies.
In addition to supporting well-paying jobs, the natural gas and oil industry, directly and indirectly, contributed an estimated $1.7 trillion to the U.S. economy in 2019, representing 7.9 percent of the U.S. gross domestic product.
Researchers found through wages, taxes, capital investments, and support to other industries, the economic impact extends beyond traditional natural gas and oil-producing states.
“Every state in the nation has a stake in continued access to U.S. natural gas and oil reserves, which are critical for the nation’s economic recovery,” the study authors wrote.
In short, as the nation continues to recover from the pandemic and the economic downturn that resulted, the natural gas and oil industry will serve as an engine for long-term growth.
“The industry continues to create good-paying jobs and deliver reliable American energy to enterprises, including health care, retail, manufacturing, education and more, in communities across the nation,” researchers concluded.
According to the findings, in 2019, the natural gas and oil sector directly and indirectly:
• Supported more than 11.3 million total jobs or 5.6 percent of total U.S. employment.
• Generated an additional 3.5 jobs elsewhere in the U.S. economy for each direct job in the U.S. natural gas and oil industry.
• Produced $892.7 billion in labor income, or 6.8 percent of the U.S. national labor income.
• Supported nearly $1.7 trillion to U.S. gross domestic product, accounting for 7.9 percent of the national total.
The U.S. Energy Information Administration noted that global oil and liquid fuels consumption is expected to surpass 2019 levels in 2022, as economic activity and travel patterns normalize.
“This represents an opportunity for the U.S. to meet the world’s rising demand for affordable, reliable fuels with homegrown natural gas and oil,” American Petroleum Institute President and CEO Mike Sommers wrote in an email.
“That said, America’s economic outlook depends on federal and state policy proposals that incentivize resource development, modernize energy infrastructure and streamline burdensome regulations,” Sommers wrote. “The nation’s hard-fought energy security and GDP growth are at stake, even as the natural gas and oil industry continues to drive the nation’s post-pandemic recovery.
“As America’s economy comes back, the natural gas and oil industry will serve as the foundation for long-term growth and prosperity,” he said. “Every state across the country — both blue states and red states — rely on American energy to fuel each sector of the economy and support millions of U.S. jobs. This study reinforces that America’s economic outlook is brighter when we are leading the world in energy production, and it serves as a reminder of what’s at stake if policymakers restrict access to affordable, reliable energy and make us more dependent on foreign sources.”
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Oil and gas is in inevitable decline, so why trying to rely on an industry that had it’s heyday.
Moving into the future by looking in the mirror must be difficult.
I just did my own study and research on the topic. Took 1 minute. In 1981 US oil production during the heat of the worst recession since the Great Depression was 8.7 million barrels per day. Ten years later, it was down to 7 million barrels per day. Over the same 10 year period, economic growth was 4.5% per year, the best it had been since the 1950’s.
In the next great recession of 2008/9, US oil production was at only 5 million barrels per day. Between 2009 and 2019 it more than doubled to 13 million barrels per day, but economic growth averaged 2% per year.
Domestic oil has little to do with economic growth in the US. It represents about 1.5% of the economy as a whole.
In Washington, it represents about 50% of the B.S. that can easily be replaced.
I am the canary in your coal mine. Being a former engineer for a large power company and having earned a Master of Science in Energy and the Environment, I had PV panels installed five years ago, with my estimated payback of 15-17 years, . . the right thing for an eco-freak to do. Before they could be installed, we acquired a VW e-Golf electric car. The savings in gasoline alone took the solar system payback down to 3 1/2 years. So, we added a used Tesla Model S, P85, and that took the payback down to less than three years, which means we now get free power for household and transportation.
But that is not all: We do not need to go to gas stations, we fuel up at home at night with cheap baseload power. During the daytime, the PV system turns our meter backwards powering the neighborhood with clean local power, which we trade for the stuff to be used that night. If we paid for transportation fuel, the VW would cost us 4 cents/mile to drive, and the Tesla would cost 5 cents/mile at California off-peak power prices.
No oil changes are a real treat along with no leaks. And since it has an electric motor, it needs NO ENGINE MAINTENANCE at all. We do not go “gas up”, or get tune-ups or emissions checks, have no transmission about which to worry, no complicated machined parts needing care.
I just did my own study and research on the topic. Took 1 minute. In 1981 US oil production during the heat of the worst recession since the Great Depression was 8.7 million barrels per day. Ten years later, it was down to 7 million barrels per day. Over the same 10 year period, economic growth was 4.5% per year, the best it had been since the 1950’s.
In the next great recession of 2008/9, US oil production was at only 5 million barrels per day. Between 2009 and 2019 it more than doubled to 13 million barrels per day, but economic growth averaged 2% per year.
Domestic oil has little to do with economic growth in the US. It represents about 1.5% of the economy as a whole.
In Washington, it represents about 50% of the B.S. that can easily be replaced.
I just did my own study and research on the topic. Took 1 minute. In 1981 US oil production during the heat of the worst recession since the Great Depression was 8.7 million barrels per day. Ten years later, it was down to 7 million barrels per day. Over the same 10 year period, economic growth was 4.5% per year, the best it had been since the 1950’s.
In the next great recession of 2008/09, US oil production was at only 5 million barrels per day. Between 2009 and 2019 it more than doubled to 13 million barrels per day, but economic growth averaged 2% per year.
Domestic oil has little to do with economic growth in the US. It represents about 1.5% of the economy as a whole.
In Washington, oil lobby represents about 50% of the B.S. that is a constant in the halls of congress. Oil and the B.S. that goes with it is going to be easy to replace.
Indeed! Employee and company owner personal purchasing within the oil and natural gas sector and its supply chain, as well as shareholder personal spending from dividends received from oil and natural gas businesses, have all had an influence. Thank you.
The oil and gas industry plays a major role in the global economy. The industry is used to supply heat and power for homes and businesses.