Texas, Cali, OK and CO Lead Nation in Oil Employment
Latest API study breaks down the state-by-state economic development involved in the oil and gas industry.
The American Petroleum Institute released an annual report on the economic impacts of the oil and gas industry on all 50 U.S. states. Nationally, total operational and capital investment impacts of the oil and natural gas industry comprised 5.4% of U.S. employment and 6.4% of its labor income.
Texas, California, Oklahoma and Colorado lead the nation in oil and gas direct labor income.
According to the report, these impacts are the result of three channels: direct impacts from the employment and production within the oil and natural gas industry; indirect impacts through the industry’s purchases of intermediate and capital goods from a variety of other US industries; and induced impacts from the personal purchases of employees and business owners both within the oil and natural gas industry and its supply chain, as well as from the personal spending by shareholder out of the dividends received from oil and natural gas companies.
The American Petroleum Institute engaged PwC to quantify the economic impacts of the US oil and natural gas industry in terms of employment, labor income, and value added at the national, state, and congressional district level.
This report provides PwC’s economic impact estimates for 2021.
The report’s findings show that the US oil and natural gas industry has a widespread economic impact throughout all sectors of the economy. Combining the industry’s direct, indirect, and induced impacts, the industry’s total impact amounted to 10.8 million full-time and part-time jobs and accounted for 5.4 percent of total US employment in 2021.
According to the report, the economic impact of the oil and natural gas industry can be seen across the United States.
The states with the largest direct employment effects are Texas, California, Oklahoma Pennsylvania, and Louisiana, each with more than 90,000 jobs directly attributable to the oil and gas industry.
In 30 states the industry directly and indirectly supported at least 100,000 jobs in 2021.
Texas alone had 2.5 million jobs directly and indirectly supported by the industry, and California had over 1 million jobs directly and indirectly supported by the industry. The share of state employment supported by the oil and natural gas industry (including direct, indirect, and induced impacts) ranges from 2.3 percent in the District of Columbia to 15.3 percent in Oklahoma.
In describing the economic impact of the US oil and natural gas industry through its employment and purchases of goods and services, this report considers three separate channels -- the direct impact, the indirect impact, and the induced impact -- that in aggregate provide a measure of the total economic impact of the US oil and natural gas industry.
• Direct impact is measured as the jobs, labor income, and value added within the oil and natural gas industry.
• Indirect impact is measured as the jobs, labor income, and value added occurring throughout the supply chain of the oil and natural gas industry attributable to its operating and capital expenditures.
• Induced impact is measured as the jobs, labor income, and value added resulting from household spending of labor and proprietor’s income earned either directly or indirectly from the oil and natural gas industry’s spending and from the personal spending by shareholders out of the dividends received from oil and natural gas companies.
Together these effects result in the oil and natural gas industry having a widespread economic impact throughout all sectors of the US economy.
The main data source for the industry’s direct jobs, labor income, and value added is the State Annual Personal Income and Employment data set published by the US Bureau of Economic Analysis (“BEA”).