EnergyFactor By ExxonMobil | Pespectives has a new home

Helping the heartland

USA Today had a front page story this week that provides valuable perspective on the dramatic economic impact unleashed by the development of unconventional oil and gas across the country.

The headline is clear enough: “Wealth rises in USA’s heartland.”

The story, which is based on the latest data from the U.S. Bureau of Economic Analysis, points out that energy production “is driving up income so fast in a few hundred small towns and rural areas that it’s shifting prosperity to the nation’s heartland.”

The story notes that inflation-adjusted income in small-town America has improved compared to before the recession – “up 3.8 percent per person since 2007 for the 51 million [people] in small cities, towns and rural areas.” And small-town prosperity is most noticeable in North Dakota, where oil production from the Bakken Shale has jumped 100-fold since 2006.

The paper’s map traces a band of relatively uninterrupted economic activity in rural regions stretching from the Bakken in North Dakota to Texas, home of the Barnett and Eagle Ford shale plays. The area represents counties where inflation-adjusted per capita personal income rose anywhere from 10 to 102 percent since 2007.

According to the analysis by USA Today, the small-town wealth jump compares favorably to the economic performance of the nation’s cities, in which the average per capita income actually fell between 2007 and 2011.

Of course, not all cities are suffering. I recently pointed out several major urban areas that are thriving – most notably cities such as New Orleans, Houston, Austin and Youngstown.

What do those locales have in common? They are all associated in some way with the substantial increase in domestic energy production that has created 1.7 million new jobs so far and generated $62 billion in federal, state and local tax revenues this year alone.


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