EnergyFactor By ExxonMobil | Pespectives has a new home

A state-level look at how energy companies create economic opportunity

Many Americans, including many in Washington, are looking for ways to stimulate job growth and economic recovery. I suggest they look at what’s happening in the U.S. oil and natural gas industry, which – with its emphasis on innovation and technology – continues to be a powerful resource on both of these fronts.

As the American Petroleum Institute pointed out earlier this week, in 2010 the U.S. oil and natural gas industry delivered $476 billion in benefits to the U.S. economy – more than three times the amount it earned.

What’s more, energy is one of the few U.S. industries that has added a significant number of jobs recently.  One reason is recent advances in production – particularly in the oil and natural gas found in shale rock formations. These advances, pioneered here in the United States, have opened up new domestic resources, and the well-paying jobs that come along with them.

To see this energy “stimulus” at work on a more local level, let’s look at two states where energy production is rising as a result of advances in shale oil and gas production: Pennsylvania and North Dakota.


The Pennsylvania Department of Labor and Industry estimates that 218,200 jobs were related to natural gas production from the Marcellus Shale in the fourth quarter of last year.


Jobs in the state’s “core” oil and gas industries have risen more than 130 percent over the last 10 years, even as total employment in the state fell by 0.1 percent, U.S. data show.

This energy-production activity is having economic ripple effects across Pennsylvania.

In fact, a recent study estimated that, in 2009 alone, Marcellus shale gas production contributed more than $7 billion in gross economic output, including knock-on effects like the hiring of truckers and construction workers and the purchase of iron and steel, and the so-called “induced” benefits seen when workers spend part of their paychecks on goods and services.

These are not low-paying jobs. The average salary for workers engaged in Marcellus Shale development is more than $60,000, according to the Pennsylvania labor department.

North Dakota

In North Dakota, it’s a slightly different story, because the jobs are centered around production of oil, not gas. Oil from the Bakken shale formation is one reason why North Dakota has one of the lowest unemployment rates in the nation, at 3.2 percent in June.

North Dakota Oil Production - January 2004 to May 2010Of course, North Dakota has a much smaller population than Pennsylvania, so the impact on the state has been more dramatic. According to a recent study, in North Dakota, the petroleum industry supported more than 65,000 jobs in 2009 (up from 25,700 in 2005), and contributed more than $1 billion in direct and indirect local and state tax revenues.

And North Dakota currently has a $1 billion budget surplus. Gov. Jack Dalrymple was quoted as saying that the state’s “pro-business climate” was one reason for the state’s ability to reap the benefits of the new technologies that enabled production from the Bakken shale.

Partners in economic recovery

I know this still might sound like a radical notion to some.  The idea that U.S. oil and gas companies are a partner in U.S. economic recovery runs counter to the storyline we sometimes hear from Washington and elsewhere, which is that “Big Oil”‘s interests are at odds with the U.S. economy.

This myth is not only disingenuous, but dangerous – because you can’t make smart decisions about our nation’s financial future if you’re not clear on which industries are actually contributing to the economy.

ExxonMobil is proud to pay our fair share of taxes and royalties and to return capital to the U.S. economy. We are even more proud of the jobs and economic opportunities that we help create in Pennsylvania, North Dakota and other states.

We could grow more – and hire more and innovate more – if policymakers at the state and federal levels would allow full use of domestic oil and gas supplies.  On the other hand, policies that impose new taxes on the U.S. oil and gas industry might produce some short-term revenue, but in the long run will limit our ability to compete and constrain our ability to help build a sustainable U.S. economic recovery.

  • Worth a deeper look...