What’s the hottest sector of the US economy? That’s easy. Oil and gas extraction industries are in the midst of a remarkable jobs surge, as Annie Lowrey of The New York Times detailed this week.
… [Oil] and gas extraction alone created 150,000 jobs last year – about 9 percent of all new jobs created in 2011, according to a new study from the World Economic Forum, though the industry accounts for only about 5.2 percent of total employment.
Looking more closely at Bureau of Labor Statistics data, virtually all parts of the oil and gas industry have seen job growth since the recession ended. Pipeline employment has risen 4 percent since June 2009. Oil and gas extraction has seen job growth of 18 percent. Employment in support activities for mining – like surveyors for drilling sites – has jumped 41 percent. During the same time period, total employment has increased just 2.1 percent.
We’ve touched on this numerous times as well — while the much of the rest of the economy has been stagnant (or declining), oil and gas has expanded rapidly in the last few years. And it goes back further than 2009.
We identified nine key oil and gas, pipeline, and related construction industries, a sector that had 30% more jobs in 2011 than in 2005, according to EMSI’s 2011.4 Covered Employment dataset. Over the same time, national employment has shrunk 2%. This includes 62% growth for support activities for oil and gas operations and 35% growth for crude petroleum and natural gas extraction.
These impressive job numbers don’t include self-employed workers or proprietors.
|NAICS Code||Description||2005 Jobs||2011 Jobs||Change||% Change||2011 Avg. Annual Wage|
|Source: EMSI Covered Employment - 2011.4|
|211111||Crude Petroleum and Natural Gas Extraction||121,986||164,730||42,744||35%||$150,464|
|213111||Drilling Oil and Gas Wells||66,835||87,481||20,646||31%||$85,423|
|213112||Support Activities for Oil and Gas Operations||145,941||235,981||90,040||62%||$76,496|
|221210||Natural Gas Distribution||106,603||108,386||1,783||2%||$88,333|
|237120||Oil and Gas Pipeline and Related Structures Construction||72,017||96,422||24,405||34%||$65,405|
|486110||Pipeline Transportation of Crude Oil||6,973||9,040||2,067||30%||$109,957|
|486210||Pipeline Transportation of Natural Gas||25,676||27,243||1,567||6%||$110,761|
|486910||Pipeline Transportation of Refined Petroleum Products||5,000||6,376||1,376||28%||$93,744|
|Total U.S. Jobs||134,700,925||132,155,311||-2,545,614||-2%||$47,321|
It’s clear that the growth in oil and gas production has impacted other areas of the economy, such as services, manufacturing, real estate, and general transportation. Just look at bustling North Dakota, as Keith Schneider has documented.
An EMSI analysis showed for every new oil and gas production job in the US, two more jobs are generated. This means the 187,00 new jobs since 2005 in oil and gas have generated another roughly 374,000, for a total of 561,000 new jobs — over a period when the US economy as a whole lost more than 2.5 million net jobs.
Top States for Oil & Gas Production
In terms of overall jobs in these nine industries, Texas has nearly four times more than the next state, Louisiana. That’s no surprise. But a more informative metric to look at is location quotient, which measures how concentrated these industries are in each state compared to the national average of 1.00. On that front, sparsely populated Wyoming (with a location quotient of 12.59), Alaska (7.41), and North Dakota (6.59) are more reliant on oil and gas production than any other state.
Also of note:
- Pennsylvania has gone from just over 14,000 jobs in this sector in 2001 to an estimated 26,000-plus in 2011, an 84% increase. It also has seen a 42% jump in location quotient and now stands at 0.77 (still well below the national average).
- California has the highest average earnings in these nine industries ($121,120) among all states (not including Washington, D.C.), but ranks 15th in location quotient (0.81, a 17% decrease since 2001).
- Colorado has had the third-largest increase in total oil and gas production jobs over the last decade, behind Texas and Oklahoma. It has added nearly 15,000 new jobs. That’s an 130% increase, the second-highest on a percentage basis behind North Dakota (395%).
The table below with all states and D.C. is ranked by estimated 2011 jobs.
|OIL & GAS PRODUCTION JOBS BY STATE|
|Source: EMSI Covered Employment - 2011.4|
|State||2011 Jobs||2011 Average Earnings||2011 LQ|
|New Mexico (NM)||18,245||$72,917||3.68|
|North Dakota (ND)||15,844||$82,823||6.59|
|West Virginia (WV)||10,874||$66,964||2.48|
|New York (NY)||9,752||$92,117||0.19|
|New Jersey (NJ)||8,062||$97,181||0.35|
|North Carolina (NC)||3,560||$56,836||0.15|
|South Carolina (SC)||752||$63,073||0.07|
|Rhode Island (RI)||588||$86,154||0.21|
|District of Columbia (DC)||486||$129,804||0.11|
|South Dakota (SD)||350||$78,119||0.14|
|New Hampshire (NH)||201||$85,883||0.05|