The resurgence of manufacturing is a hot topic right now as presidential candidates discuss job creation and how to bring back more domestic and foreign investment to the United States. But what industry is creating the biggest boom in jobs and investment right now? Domestic oil and gas production.
The growing national and global demand for fuel, along with technological advances like hydraulic fracturing and horizontal drilling, are powering this growth. According to a recent energy review by the U.S. Energy Information Administration, U.S. crude oil production for the lower 48 states reached a 23-year high in July of 5.9 million barrels a day. That’s the highest monthly production of crude oil in more than than 23 years and reverses a downward trend in U.S. oil production that started in the mid-1980s.
The EIA also estimated that domestic oil production increased more than 14 percent in non-Alaska states from January to July 2012 — one of the largest annual increases since the 1970s — thanks to big energy gains in North Dakota, Pennsylvania and Texas. In the Lone Star State alone, natural gas reserves account for almost one-third of the country’s total domestic supply.
Employment High for Oil, Gas Drilling
The spike in domestic oil and natural gas production is having a ripple effect on energy sectors in resource-rich regions, spurring multimillion dollar investments by refineries and thousands of jobs. Over the past two years, employment in the oil and gas industry for drilling-related jobs has increased by more than 23 percent to 195,500 jobs — the highest level since early 1988. That amounts to 85 new jobs every business day for the past year, according to the report.
But the true impact is even greater if you count all of the indirect jobs created through supply chains for oil and gas, as well as manufacturers and other industries that serve the sector. In the Coastal Bend region of south Texas near Corpus Christi, activity in the Eagle Ford Shale has not only brought drilling, trucking, service and supply jobs to multiple counties, but it’s also resulted in a $1 billion investment by a Chinese company building a seamless steel pipe plant in the region. The plant is expected to create 300 jobs in its first two years and 500-600 jobs once production ramps up.
Manufacturers Tap Into Energy Growth
Near the Ohio-Pennsylvania border, drilling in the Marcellus Shale Reserve has brought billions in revenue and thousands of jobs to the region. According to the U.S. Energy Department, the shale play has enough gas to meet the U.S. demand for the next six years and is set to exceed production of 6 billion cubic feet per day.
All of this has made the once impoverished region ripe for investment by manufacturers supporting drilling and hydraulic fracturing operations. From steel pipe manufacturers to makers of natural gas transmission and compression equipment to firms specializing in the collection and disposal of well water waste, companies are flocking to the Youngstown, OH area to tap into the opportunities.
According to a recent Bank of America/Merrill Lynch report , the economic benefits of energy production in the U.S. is already approaching $1 billion per day. What’s your take on this report? Has your region benefited from surging oil and gas production? How can resource-rich states tap into more of this growth? Please share your thoughts below.