Debates continue about ways to reduce the deficit, create jobs, and jump-start the U.S. economy. One important way to approach the issue is focusing on our nation’s strengths, and how we can build upon them. And one of our strengths is our world-class oil and natural gas industry.
A study released this month by PricewaterhouseCoopers shows that the U.S. oil and natural gas industry is a foundational part of the U.S. economy – throughout the ups and downs. The numbers show that even during the 2008 economic crisis and ensuing recession – when U.S. crude oil prices fell from a high of $145 a barrel to a low of $30 a barrel –the U.S. oil and gas industry remained a steady source of economic activity and job creation.
According to the study, in 2009 the operations and capital investments from the U.S. oil and natural gas industry:
- Supported 9.2 million American jobs – about 1 in every 20 jobs.
- Accounted for 7.7 percent of U.S. GDP, up from 7.5 percent in 2007.
- Had an economic impact that reached all 50 states and the District of Columbia.
The top 15 states in percentage of jobs supported by the industry were Wyoming, Louisiana, Texas, Oklahoma, Alaska, North Dakota, New Mexico, West Virginia, Delaware, Kansas, Montana, Mississippi, Colorado, Arkansas and Utah.
While some of these are known energy producing states, it’s also interesting to note large job numbers in other states. For example, the industry supported about 900,000 jobs in California, about 275,000 jobs in Pennsylvania and about 250,000 jobs in New York.
These jobs are associated with every step of the demanding process of getting oil and natural gas to consumers safely and reliably, as well as the service providers and industries that depend on those activities for their business.
Beyond just showing the industry’s enormous economic contributions, I think this study is an important reminder of the cyclical nature of the industry – and why targeting companies with punitive measures during periods of global high prices doesn’t make for good policy.
Back in 2008, after commodities and other markets hit all-time highs, oil prices fell more than $100 per barrel as the economic crisis cut demand for energy. While other industries were seeing large drops in payrolls – and some companies were receiving government bailouts – the U.S. oil and gas industry continued to steadily support the economy and more than 9 million American jobs.
We were able to do that due to our focus on long-term investment and the support of stable policies based on market fundamentals, not short-term market volatility.
ExxonMobil and other oil and gas companies have learned from experience that commodity prices fluctuate – often unpredictably. And yet our energy projects cost billions and can take 10, 20, 30 years and more from start to finish. So we must operate and invest in a disciplined, safe, and cost-efficient way to help ensure that we can keep our projects moving forward, our business running, and the energy flowing for consumers in both up and down business cycles.
But we can’t do that alone. These efforts must be supported by sound and stable policy measures applied throughout the economy that maintain a level playing field, promote investment and support job growth.
The results of letting companies compete and invest can ripple throughout the economy. In our industry, studies have shown that opening up access to energy resources that have been kept off-limits could create 400,000 new jobs by the year 2025, or create as much as $1.7 trillion in government revenue over the life of the resources.
On the other hand, punitive measures – such as selectively raising taxes on the U.S. oil and gas industry — accomplish none of these things. It may sound politically expedient in times of high prices, but it would only serve to raise costs for businesses, curb economic growth and threaten the millions of American jobs our industry supports – not to mention our national energy security.
This article, which could have been a thoughtful education on oil and gas development realities, is an insultingly superficial political hack job.
Based on your arguments above, you’re making a fantastic case for eliminating all oil & gas industry tax credits, and handing them over to the information tech and health care fields — both of which employ far more people, suffer even greater international competition, and do vastly more good in advancing our workforce’s global competitiveness than oil and gas extraction ever will.
I also resent your phrase “selectively raising taxes” to refer to the removal of oil & gas industry tax handouts. I often vote Democrat, but on this issue, I’m leaning sympathetically toward the Tea Party. Your industry is not remotely in need of taxpayer subsidies or tax credits, any more than corn growers, or anyone else enjoying federal pork.
If you have something intelligent to say on the matter, I’m all ears. But your blatant anti-Democrate bias, as though voters are that simplistic (ever hear of the vast middle ground of swing voters?), is just a waste of internet resources. This article will appeal greatly to a non-thinking conservative, who are already… read more »
…in Republican pockets. It will do less than nothing to persuade thoughtful swing voters like me — who by the way, are in industries that DON’T receive any federal development incentives.
Move on, grow up, and please stop insulting your readers’ intelligence.
You took the words right out of my mouth–very self-serving blog. I typically vote republican but I’m a strong environmentalist and don’t believe anything I read that’s self-serving from the company that writes it.
I feel the same way. ExxonMobil has a huge social duty and this blog doesn’t fulfill it, as hard as they might try.
Very good and thoughtful response. If EXXON was truly concerned about cheaper development of oil and gas alternatives, they would spend some of those so called tax free returns on environementally safe alternatives that cause less destruction to the planet earth. The money has been too important in the personal pockets of the very rich and people in power.
Why the assumption of a zero-sum game? Our current economic condition proves we need a BIGGER PIE, one that expands jobs in as many industries as possible. Class warfare will never BUILD a nation.
Exxon-Mobile is likely the most efficient Corporation in our world of business. I applaud your many environmental clean-up efforts. Many worry about running out of oil at some time in the future. My view is that we will not survive to use our oil resoources unless we immediately and drastically curb the polluting of our now breathable atmosphere. Environmental pollution continues to mount…and we continue to use mostly “wishful thinking” as our defense against environmental pollution. If we do not clean up our air and our planetary waters…we will not live to use the oil that lies under our lands and waters.
Exxon wouldn’t have to clean up if they didn’t MESS UP the environment. The spill in Louisiana could just have easily been Exxon’s spill in another part of the coastland. You are exacty right about not having to worry about running out of oil if we don’t curb the polluting of our breathable atmosphere an ensuring a ecologically safe ocean. I hope your kids (if you have any) will learn the truth about what’s going on in the real world and help you to see how you are likely at the heart of ruining the world your grandchildren will live in.
I wonder Mr. Cohen. Do you ever leave your computer? Have you ever personally been to Prince William Sound? Because, I have fished there my entire life. Or, rather I used to!! I have personally lost 200k in the herring fishery which YOUR spill killed off!! I do not care what your scientists say. They are paid by Exxon to get the results that Exxon wants. I have been in there as recently as two years ago to haul pink salmon to Kodiak. The salmon survived only because they spawn upstream where the oil didnt go. The herring however spawned in that muck. I was there in “94″ when the last big gathering of both boats and herring got together. We fished and the buyers refused everything we caught. We had fish with crooked spines, big goiters under their chins and big red raw lesions all over their bodies. They were born in the toxic mess and the numbers after this class of fish totally collapsed. How many we have wondered were made infertile by mother nature because of their defects? Exxon scientists still claim that the fish had nothing to do with the oil. When I learned to… read more »
…fly, I was taught that if anything went wrong with the aircraft, what could I have done to cause it? The majority of the time, will be the cause of human error. This fishery thrived all the way up UNTIL the time that the EXXON fish returned to spawn. You caused it and the destruction of many livlihoods as well. Permits that cost a quarter million to buy were now worth less than a budget toilet paper! Thousands of jobs gone or impacted by EXXON and their greed! You are posting record profits yet, you held off on paying damages to us fishermen for TWENTY years and then get the reward reduced to 500 million!! So, Mr. Cohen, there have been many people financially wrecked over your companies policies and yet you will try to tell us how environmentally friendly you are! I dare you to go up there like I did two years ago and dig in the sand. Within one minute of making a hole, you will see the rainbow of colors that oil makes seeping back in. Long strands of black crude and droplets will start to float on the water as it fills back in. You washed the oil right into the earth where it still lies. And, guess what? There have not been enough herring to support even one processing ship to make the trip. We used to have 6 ships on the grounds and a good portion got hauled to Seward as well.I have lost as I said, a couple hundred k as a tenderman. I have not ever recieved one cent from Exxon as I was only a crewmwmber at the time! So, what good has Exxon ever done for me or Alaska’s fishermen? Alaska should have confiscated your vessels and FORCED you to pay but of course the money in the right hands gets things done Your way does’nt it? The politicians have their pockets lubed really well with Exxon cash. And those who work to feed even the Exxon people have less fish to compete for and higher fuel prices to boot! Exxon is the only winner in this mess. I know men who lost their homes because the banks did’nt relent on those quarter million dollar permits! Try paying off a permit that brings in ZERO income! Why did’nt you go and pay off all the permits if you cared for the people? Because you were trying to reap maximum profit and the hell with the people involved! That is a true story and you are welcome to debate it with me however, since this is Exxons website, I expect this entire story to vanish just as thousands of tons of herring did. Good day Sir.
Ken, is that a whining sound I hear? Policies aren’t stable. Whahhhh! They want to take away our corporate welfare. Whahhhhh.
You fail to mention (what a surprise) that the study you refer to was paid for by the American Petroleum Institute.
The oil industry is eventually going to end civilization on this planet. Don’t ask me to subsidize your efforts to do so.
What we have to remember is that stuff like this is written by Exxon’s public affairs department and then posted. Imagine what would happen if they wrote the truth and it was posted? Someone’s head would roll.
I remember vividly during the recent congressional hearings. A brave congressman asked Exxon this question, “Exxon’s net profits for 2010 were 125 billion. Would you still fight for the $2 billion subsidy the USA provides Exxon each year?” The answer was an emphatic yes.
Where do you folks get that Technology companies employ more people than oil and gas? It’s funny folks vilify mythical “Big Oil” and make the insinuation they are all fat cats who are friends with Bush and Cheney.
Screaming about profits and tax breaks and fall hook line and sinker for the big bad wolf stories.
I bet some of you carry iphones and have all use Windows in your life at some point each day.
Yet, you never mention the simple fact that Apple earned more than Exxon 1st quarter 2011. You have no problem with Apple or Microsoft or Oracle, only big oil because the news told you to. You just scream about evil big oils profits.
Guess what….Exxon earned less than Apple while employing 86,000 people. Apple employs 21,000.
So the evil oil company earns less than Apple while employing 65,000 more people, and they are evil.
Pay attention people.
I’ve cut my gas consumption a lot by biking to work. Do you really think I’m going to let you steal from me? I’ve cut my gas consumption by more than a gallon per day. Until you stop rippimg people off and getting rich at the expence of the American people, you can keep your gas. Do you really think it’s right for you to make record profits, while the rest of the world is to accept cuts to their compensation?
Gregg, these are some pretty strong words — so I would like to address your comment about our profit from selling gasoline. In the second quarter of this year, ExxonMobil earned about 8 cents for every gallon of gasoline and other products we refined and sold in the U.S. To put that in perspective, that profit margin is about half (or less) of what companies in the pharmaceutical or technology industries make. And if you look at our financial statement you’ll see that we invest our earnings back into the business … in fact, over a 3-to-5-year period we typically re-invest nearly 100 percent of our earnings back into projects to produce the energy that the world needs. In addition, our earnings have benefited millions of U.S. shareholders, many of whom are public sector workers (including teachers, policemen, etc.) whose pensions depend on our success. We also employ thousands of Americans and pay billions in taxes each year. While many people like to demonize oil companies due to the price at the pump, that’s just not the full story — by a long shot.
What a joke. Our economy runs on oil and natural gas. Duh, the figures are meaningless without discussion of alternative investment strategies and their effects.
“These efforts must be supported by sound and stable policy measures applied throughout the economy that maintain a level playing field, promote investment and support job growth.”
Yes, let’s do that. Let’s remove the subsidies and tax breaks for oil and gas and let’s stop the industry from externalizing costs (wars, pollution, trade imbalance, etc.) upon the rest of us. Then, let’s see how well it competes.
If the United States utilizes roughly 27.39% of the world’s oil production at roughly 20,517 thousand barrels daily and our production is 7,241 thousand barrels per day, it makes sense that our price for oil is high, due to our low supply output. My statement is this, if the United States could increase overall oil production and stop oil export all and all, then we would be able to decrease costs in the long haul. People are currently too biased by the media and not looking towards the real issue. Our real issue is the fact that we export USA produced oil, only to be resold to us after it’s been reprocessed in another country. If we were to remove the middle man and started to produce more oil than we use, our overall supply would increase and demand would be the same. This would lead to higher profit margins, enabling lower price per barrel… reducing crude oil prices and dropping end all pump pricing. It’s quite simple business ethics. Your main issues are this, we are blaming a small portion of a much larger issue. Exonn Mobil does gain a very… read more »
…small profit margin for their actual work done, a successful business wants around 33% profit to flourish, Exonn is actually succeeding with a much lower profit margin, theirs sits just over 2%. If you rid the United States of import crude oil and increased the overall export of crude oil from the United States, yes, you would get a drop in gas prices, but this would bring less government income via taxes through import oil. I do not have the numbers on me at the moment, but the overall job gain would drastically outweigh the cost of loss in federal import oil taxes. One of which subjects Exonn Mobil has actually fought for. This would solve unemployment issues and our current government debit, the only thing it wouldn’t solve is the current government deficit. The other issue brought up by Bret Ames is the environmental effects, I have been to the Prince William Sound. I have kayaked many miles and have seen the results of the oil spill. What I do know is this, the demand on crude oil is far outweighing the demand for a sound ecosystem. If we lowered our overall crude oil consumption, this would not be an issue… aka other energy sources. But the subject of this conversation is more so aimed at the economic side of things. Any other questions or ideas, I’d happily respond to. I’m out for the night, farewell all!
Very well put Kathleen !, These efforts will be supported by selfish Republicans continuing in unleveling the playing field, and promoting investment for there wealthy contributors and other crooked politicians