Oil's Underappreciated Role | Russell T. Rudy Energy LLC
John Kemp is an oil and gas market analyst who frequently writes opinion pieces for “Rigzone”. The following is a synopsis of one of his recent articles. It relies heavily on data from the U. S. Bureau of Economic Analysis (BEA) based on the decade from 2002 to 2013.
Over the last decade the eight states at the forefront of the shale revolution grew faster than the national average in terms of inflation-adjusted compound annual growth rate (CAGR). Across the U. S. the amount of Gross Domestic Product attributable to private industry grew at 1.8%. However, the eight states leading the shale revolution all grew faster. The CAGR for these ranged from a high of 7.4% for North Dakota, to 1.8% for New Mexico and Kansas. Wyoming, Utah, Texas, Oklahoma and Colorado fell in between.
During the same decade full time equivalent positions in the oil and gas industry increased by 60%, adding 75,000 new jobs in the industry per se, and an additional 220,000 in the support sector. Oil and gas extraction accounted for 7% of all jobs created during this period. This is especially noteworthy when one considers that this is a very capital intensive industry.
Employment benefits from oil and gas were not merely quantitative. The average salary in the industry is $157,275 and for service employees, $85,432. This compares quite favorably with the average salary of all private sector employees of $55,424.
Unfortunately, the petroleum industry has never been popular with many policymakers, economists and journalists. In his recent State of the Union address, President Obama only mentioned oil and gas in passing, taking credit for the dramatic increases in production which have led to lower gasoline prices. However, he failed to mention that almost all of the increased production was from private and state lands and in spite of his administration’s heavy-handed approach to regulation.
To read the article in its entirety, please go to www.rigzone.com/news/article.asp?hpf=1&a_id=136873&utm .
