Study: Oil & Gas Industry Packs Economic Punch

Despite its ups and downs, the oil and gas industry still has a big impact on employment in the U.S., according to an analysis released in May by the American Petroleum Institute (API) (Washington, D.C.).

The industry supported 10.8 million jobs, or 5.4% of total U.S. employment, and contributed nearly $1.8 trillion to the U.S. economy in 2021, according to the study by PricewaterhouseCoopers (PwC) (London, England), based on the latest government data available. The API commissioned PwC to study the industry's economic impact at the national, state and congressional district levels.

"America's economic outlook is brighter when we are leading the world in energy production and this analysis serves as a reminder that we need policies and regulations that encourage investment and enable development," said API President and Chief Executive Officer Mike Sommers in a press release.

Among natural gas and oil jobs, the average wage was 65% greater than the U.S. average, according to the API. The industry also generated 3.7 jobs elsewhere in the U.S. economy for each direct job in the industry, according to the report.

Not too surprisingly, Texas led the way in the amount of money generated by the industry, totaling $454.5 billion. However, California came in second place at $217.1 billion, according to the study.

The states with the largest direct oil and gas employment were Texas, California, Oklahoma, Pennsylvania and Louisiana.

States with the largest share of direct and indirect employment from oil and gas included Texas, Oklahoma, Wyoming and North Dakota. Of all states, Oklahoma had the largest share of employment supported by the industry, at 15.3%.

The report included the economic impact of oil and natural gas exploration and production, oil refining, pipeline operations, natural gas distribution and oil marketing.

The report also broke down the data by jobs from operations (9.4 million) and those from capital investment (1.4 million).

Capital spending by the industry totaled $159 billion in 2021, according to the report. Currently, Industrial Info is tracking more than $56 billion worth of oil and gas production, terminals, pipelines and petroleum refining projects in the U.S. that are in the construction stage. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for a list of detailed reports.

At the congressional district level, the number of jobs directly attributable to the oil and natural gas industry was at least 1,000 in all but 11 districts and exceeded 5,000 in 121 congressional districts in 2021, the report said, adding: "Direct employment is especially pronounced in districts in Texas, Oklahoma, and Louisiana with significant oil and gas extraction activities."

Nine of the top 15 congressional districts in terms of the oil and natural gas industry's direct employment were in Texas, home to the Permian Basin and the Eagle Ford Shale. Leading all districts was Texas' 11th Congressional District, which stretches from the Permian Basin to the outer fringes of Dallas-Fort Worth.