American Oil and Gas Reporter - June 2023 - 27

Economic Powerhouse Of
Oil And Natural Gas Industry
Has Impact In Every State
Everyone reading this column understands the diversity of
the U.S. oil and natural gas industry. It includes many segments-upstream,
midstream and downstream. In the upstream,
we have onshore and offshore production. There are both major
and independent producers.
Considered collectively, our industry is a worldwide economic
powerhouse. The hard numbers are very important in our advocacy
efforts in Washington and statehouses across the country.
A new American Petroleum Institute report prepared by
PricewaterhouseCoopers shows that America's oil and natural
gas industry touches the economy and labor force in every state
in the country, contributing invaluable revenue and employment
income to all 50 states.
Commenting on the data, API President and Chief Executive
Officer Mike Sommers says the report encourages lawmakers
to support continued growth in domestic energy production.
" America's economic outlook is brighter when we are leading
the world in energy production and this analysis serves as a reminder
that we need policies and regulations that encourage investment
and enable development, " he remarks.
In addition to manufacturing products that power the greater
economy, 2021 data shows that the industry supports 10.8
million full-time and part-time jobs in all 50 states, accounting
for 5.4% of the country's workforce and contributing nearly
$1.8 trillion a year to the U.S. economy.
Oil and natural gas employment activity also acts as a
multiplier for labor income. According to the report: " At the national
level, each direct job in the oil and natural gas industry
supported an additional 3.8 jobs elsewhere in the U.S. economy
in 2021 (for a multiplier of 4.8). Counting direct, indirect and
induced impacts, the industry's total impact on labor income
(including proprietors' income) was $908.7 billion, or 6.4% of
the U.S. national labor income in 2021. "
This is particularly true in states with significant natural resources
and energy production. In five states-North Dakota,
Wyoming, Oklahoma, Texas and Louisiana-the oil and natural
gas industry directly and indirectly supports between 11.0%
and 15.5% of the state's workforce. In another six states-
Montana, Colorado, Kansas, New Mexico, Mississippi and
West Virginia-that figure falls between 6.7% and 11.0%.
Labor income is a major driver of the oil and natural gas industry's
total economic impact in a given state. In terms of
total economic impact, Texas ranks " substantially above other
states . . . with 507,800 jobs, $100.9 billion of labor income
and $244.1 billion of value added contributed in 2021. "
According to the Texas Oil & Gas Association's 2022 Energy
& Environmental Impact Report, the industry paid a record
$24.7 billion in state and local taxes and state royalties in 2022.
These funds go toward the state's public schools, universities,
roads, first responders and other essential services.
Further, TXOGA says, " data released by the Bureau of
Labor Statistics and Texas Workforce Commission indicates
that upstream oil and natural gas employment in Texas saw
American oil and natural gas industry " The newest numbers show that the
contributes to employment and economic
growth in every state-even ones where
leaders pursue counterproductive policies that
hamstring the industry and consequently
raise prices for consumers.
"
continued growth in April, edging up by 700 jobs and bringing
the job count to within striking distance of 200,000 for the first
time in over three years. At 199,400 upstream jobs, compared
to the same month in the prior year, April 2023 jobs were up by
17,600-or 9.7%-over April 2022. "
In its coverage of the API report, Fox News pointed out that
several other states most impacted by oil and natural gas production
are ironically pursuing aggressively anti-fossil fuel policies-
namely, California and New York. " According to the analysis, the
fossil fuel industry generated $454.5 billion for the Texas economy,
the largest impact of any state, in 2021, " it reports. " The next
three states whose economies were most-impacted by the industry
were California, Pennsylvania and New York where producers
generated $217.1 billion, $75 billion and $70.1 billion, respectively. "
Although California can attribute hundreds of billions in
statewide economic activity to the oil and natural gas industry,
the state continues to pursue policies that limit the production,
refining and sale of oil in its borders, resulting in higher prices
for consumers and increased dependence on foreign oil. In only
the last few months, California approved a rule that would ban
new sales of gasoline-powered vehicles by 2035 and created a
new agency to " investigate " unfounded price gouging allegations
against the state's few refiners.
And in New York, Governor Kathy Hochul moved ahead with
the " nation's most aggressive ban on fossil fuels " in new buildings
and home appliances in the state's new budget (see story, page
19). New York also has banned hydraulic fracturing statewide
and, despite its proximity to the Marcellus and Utica shales, has
blocked the construction of natural gas pipelines for years.
The bottom line? The newest numbers show that the American
oil and natural gas industry contributes to employment and economic
growth in every state-even ones where leaders pursue
counterproductive policies that hamstring the industry and consequently
raise prices for consumers.
❒
JEFF ESHELMAN is president
and chief executive officer of the Independent
Petroleum Association
of America and the founder/executive
vice president of Energy in
Depth. Along with more than two
decades at IPAA, he previously
worked at the Defense Logistics
Agency, the White House Office of
National Drug Control Policy and
three public affairs firms.
JUNE 2023 27
American Oil and Gas Reporter - June 2023

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