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August 21, 2013
O&G's soaring growth

Employment in three categories of the oil and gas (O&G) industry–drilling, extraction, and support–collectively grew by 40 percent from January 2007 to December 2012, reported the U.S. Energy Information Administration (EIA). 

In the context of all U.S. private sector employment, the O&G increase is striking.  Together, the three categories comprise just one-half of 1 percent of total U.S. private sector employment.  Yet, for the 6-year period, the O&G industry added 162,000 jobs while total private sector employment went up over the same period by just 1 million jobs, about 1 percent. 

“Minor” Deepwater Horizon effects

While O&G was heavily affected by the recession, recovery was rapid, says the EIA.  Moreover, the industry suffered only “minor effects” from the temporary moratorium on offshore drilling that was imposed following the Deepwater Horizon spill in 2010. 

The EIA notes that over 2007 to 2012, monthly crude oil production increased by 39 percent, and monthly natural gas production increased by 25 percent.

Support grows 35 percent

Here are a few more figures on the three O&G categories:

  • Drilling (employment related to the spudding and drilling of wells and reworking wells) accounted for more than 90,000 jobs by the end of 2012, an increase of 6,600 jobs since 2007.
  • Extraction (includes establishments primarily engaged in operating, developing, and producing O&G fields) accounted for more than 193,000 jobs by the end of 2012, which was 53,000 more than 2007.
  • Support (includes exploration, excavation, well surveying, casing, and well construction) employed 286,000 people by the end of 2012, up more than 102,000 jobs from 2007. 

Moreover, beyond within-sector employment, O&G activity directly supports output and employment in other domestic sectors, such as suppliers of pipe, drilling equipment, and other drilling materials.

North Dakota leads states

The EIA calls special attention to developments in the real gross domestic product (GDP) per capita of North Dakota, which coincide with development of the Bakken shale play. 

“In 2001, North Dakota's GDP per capita was well below the U.S. average, ranking 38th out of 50 states,” says the EIA.  “Starting in 2004, the state's GDP per capita rose consistently each year, eventually surpassing the U.S. average in 2008.  By 2012, its real GDP per capita was $55,250, more than 29 percent above the national average.  Even though the state appeared to be closing the gap on the U.S. average before Bakken production began, the rising oil and gas production likely contributed to the economic growth the state has enjoyed.”

The EIA adds that in 2012, North Dakota reported the highest annual increase in real per capita GDP of any state in the country for the second consecutive year.  In 2012, real per capita GDP in North Dakota increased by nearly 11 percent from the previous year.

“This is considerably higher than the national growth rate of less than 2 percent and is more than three times as large as the growth rate in Texas (3.27 percent), the state with the next highest annual growth,” says the EIA.

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