With the price of oil down 60 percent compared to last year, it’s no surprise that times are tough for many in our industry. Amid the turmoil for oil and natural gas producers, it might be easy to lose sight of the fact that our industry makes a tremendous contribution to the U.S. economy whether in good times or bad.
That’s certainly the case in the shale regions of North Dakota, Pennsylvania, and Texas.
It’s the case offshore in America’s coastal waters, as well.
Just how big of an economic boost is delivered by America’s offshore energy industry is detailed in a new report put out by the National Oceanographic and Atmospheric Administration (NOAA), which looks at the size of the U.S. ocean and Great Lakes economy.
By and large that refers to everything from the seafood industry (“living resources”) and tourism to marine construction, transportation, and shipbuilding. It also includes offshore mineral extraction, i.e. oil and natural gas development and production (limestone, gravel, and sand extraction comprises a tiny percentage).
What NOAA makes clear is that oil and gas is the undisputed heavyweight of the nation’s $343 billion ocean economy (based on 2012 data).
In fact, our sector represents 46 percent of that figure – about $159 billion in goods and services.
Our industry’s contribution also includes nearly $23 billion in wages for the workers on offshore platforms as well the engineers, geologists, and mappers who support offshore activity. At an average of $143,000 per year, offshore mineral extraction paid the highest wages per employee in the entire U.S. ocean and Great Lakes economy.
These figures combine to pack a big economic punch. By itself, the offshore oil and gas industry represented nearly 1 percent of U.S. gross domestic product in 2012.
In fairness, to some degree the high numbers published by NOAA reflect the higher oil prices we saw in 2012. When the book is written on 2015, they are sure to be lower.
But even in a lower-price environment, there can be no denying the petroleum sector plays a significant role not just in the nation’s ocean economy, but in the broader economy as a whole.
For more information on our industry’s offshore activities and their economic contribution, check out the American Petroleum Institute’s page on the benefits of U.S. offshore oil and natural gas development.