Where is the job growth? Take a look at the U.S. energy industry

Although today’s jobs report is slightly more encouraging than generally expected, most Americans would agree that it’s nowhere near enough. Many are asking “how can we create more jobs?”

It’s not an easy question. But one obvious place to start would be to encourage sectors in which jobs are already growing – including the U.S. oil and natural gas industry.

While today’s report unfortunately marks the 28th straight month with unemployment near or above 9 percent, the Wall Street Journal and others have noted that the U.S. oil and gas industry is a bright spot in the U.S. jobs picture. The industry has been energized in recent years by new technologies that have enabled us to tap the vast amount of oil and natural gas found in shale rock and other similar resources here in the United States – and the resulting economic contribution continues to grow. For example:

  • While the national unemployment rate was 9.1 percent in July, the unemployment rate for the oil and gas sector (within a category that also includes mining and quarrying) was 6 percent, down about 4 percentage points from a year earlier.
  • According to data from the Labor Department, U.S. jobs directly involved with finding, developing and producing oil and gas rose by more than 50 percent in the last decade. These jobs – drillers, engineers, construction workers – have a multiplier effect on employment; a recent study by PricewaterhouseCoopers estimated that each direct job in the U.S. oil and gas industry supports more than three jobs elsewhere in the economy.
  • All told, the PricewaterhouseCoopers study estimated that the entire U.S. oil and gas industry supported 9.2 million full-time and part-time jobs, and that the total economic “value added” by our industry was $1.1 trillion, or 7.7 percent of U.S. GDP, in 2009 (the latest year available).

The potential for even more jobs

As I mentioned recently, the economic effect of this energy activity is being felt at the state level – and not just in traditional oil-producing states like Texas and Louisiana, but also in states like Pennsylvania and North Dakota.
ExxonMobil and other U.S. energy companies could grow more – and hire more – if policymakers would allow broader use of domestic oil and gas supplies.

For example, a recent study found that almost 190,000 new jobs could be created by 2013 if permitting for offshore development in the Gulf of Mexico returned to levels before the Obama administration’s moratorium. Another study estimated that if New York were to ease its de facto moratorium on Marcellus Shale gas development, some 15,000 to 18,000 new jobs could be created in the Southern Tier and Western New York, regions that lost a combined 48,000 payroll jobs between 2000 and 2010.

Even supporting energy production by our neighbors can help bolster jobs in the U.S. The Canadian Energy Research Institute (CERI) estimates that employment in the U.S. supported by new investments in Canada’s oil sands could grow to a peak of 600,000 jobs in 2035, according to one research scenario.

These numbers are proof that developing oil and natural gas resources not only strengthens energy security, but our economic security. As one economist – Peter Morici, professor at the University of Maryland – noted this week, in order to create jobs and boost economic growth, President Obama could be “developing domestic (energy) resources much more aggressively than we have.” Doing so “doesn’t require public spending and would boost the economy,” he said.

Supporting job creation

For several years now, governments have tried to bolster the U.S. economy through financial tools – bailouts and economic stimulus and low interest rates. But most Americans understand that long-term, lasting recovery will require something more fundamental; it will require encouraging U.S. businesses to innovate, create, and hire.

Policies that support – not discourage – business in the United States are essential. For the energy industry, that means being granted access to resources in order to invest in the multi-billion-dollar projects typical in our industry. It also means establishing and maintaining stable tax and regulatory policies so companies can make long-term investments and hire workers with confidence.

The jobs are there – the question is whether our leaders are willing to make sound decisions that allow the industry to create more of them.


  • Worth a deeper look...