Private Sector Creating Oil and Natural Gas Jobs All Over the Place
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The American energy story over the last few years is innovation and technology creating jobs and improving America’s energy security, and it's working. In August, oil and gas jobs increased by nearly 12% from the year before due to natural gas and oil in North Dakota, Texas, Ohio, Pennsylvania, and elsewhere being extracted with hydraulic fracturing.
But those are just the jobs created directly by the oil and gas industry. USA Today reports on the astounding number of jobs created because of energy development:
Since 2002, the exploration of natural gas deposits embedded in shale, followed by oil drilling that began in earnest late in the decade, has created more than 1 million jobs, says Moody's Analytics economist Chris Lafakis. That's out of 2.7 million the whole country created.
Much of the job creation from the energy boom is from supporting the oil and natural gas rigs:
While oil and gas deposits are concentrated in a handful of places, more than 30 states saw oil and gas support employment, including suppliers and service companies that work with energy companies, rise at least 50% in the past decade, Moody's says.
Because new rigs have to be built, and oil and gas have to be moved to market either via newly built pipelines or by truck and rail, new jobs abound at both drilling companies and their suppliers, says Tom Tunstall, research director for the Institute for Economic Development at the University of Texas San Antonio.
Hydraulic fracturing needs sand, and that demand is creating economic growth, new opportunities, and “sand millionaires” in Wisconsin and Minnesota. The Minneapolis Star Tribune notes that farmers possessing the type of sand oil and gas rig operators crave could “reasonably add up to $200,000 to $800,000 per year in extra income.” The story also notes that investors are considering dropping $55 million to $70 million to build a fracturing sand processing plant in southeast Minnesota [via Mark Perry].
All that Midwest sand has to be moved, and the best way to do that is by rail. Thus, we’re seeing a rise in the use of rail services and in new rail investment.
For example, a company near San Antonio, TX that once moved 1,500 railcars of high-fructose corn syrup annually now moves 15,000 cars of fracturing sand every year to rigs in the Eagle Ford Shale. In New York, a rail terminal will soon be upgraded to “give Norfolk Southern trains hauling sand used in extracting natural gas from the Marcellus Shale formation the ability to unload 100 freight cars within 48 hours, five times faster than they presently do” according to Railway Age.
Rail comes into the picture again when oil comes out of the ground. Rail capacity has been expanded in North Dakota to move oil from the Bakken Shale to refineries.
In many parts of the country we see shale energy as the catalyst for new jobs and economic growth--from processing and moving fracturing sand to improving rail infrastructure "Shale Works for Us." This is no thanks to the federal government that's allowed oil and natural gas production to fall on federal lands. Let’s do what we can to support it.
UPDATE: How well has the oil and gas industry done to create jobs? Using Bureau of Labor Statistics data, Mark Perry put together a chart comparing direct oil and gas job growth with non-farm payrolls. The former has increased 27.5% since 2008, while the latter is still underwater.