Creating U.S. Jobs: Commentary from Washington

With the U.S. still grappling with an unemployment rate above nine percent, the issue of job creation has grown to dominate the national conversation. In Washington, D.C., and across the country, the Independent Petroleum Association of America (IPAA) has been vocal and emphatic in sharing the story of American independent oil and natural gas producers and the role they play in supporting the economy and creating jobs.

IPAA Study

In April, IPAA unveiled a new study that focused directly on the economic impact that onshore American independent oil and natural gas producers have on the U.S. economy, revealing remarkable findings for the onshore contributions of independents.

According to the study—which was commissioned by IPAA and generated by IHS Global Insight—oil and natural gas producers working onshore accounted for nearly four million American jobs in 2010, a number that represents more than three percent of total U.S. workforce.

This number is expected to grow to 4.6 million by 2015 and 4.9 million by 2020. These are of course critical jobs, especially when seen through the frightening reality of the national unemployment rate.

The study also showed that gains from onshore jobs and independents’ spending reverberate across many industries to the greater economy as a whole.
The overall economic effect of the industry has been tremendous— nearly $580 billion in total economic activity, accounting for four percent of the U.S. gross domestic product (GDP).

These figures are also expected to grow during the next 10 years, with the U.S. independent producers’ business ecosystem expected to be in the trillions.

These numbers are compelling and have been incredibly effective in IPAA’s advocacy efforts on Capitol Hill and with the Obama administration, as Washington has found itself gridlocked throughout the year in a long and heated budget battle.

While the rhetoric from the administration and some members of Congress at times suggest that the oil and natural gas industry is somehow preventing the government from balancing its budget through “loopholes,” the hard facts of the IHS study prove otherwise.

The report demonstrated that onshore independents will return more than $930 billion to state, local and federal governments in the form of taxes, rents and royalties through the next 10 years. In 2010 alone, the entire amount of taxes from the independent producers generated $131 billion of federal and state taxes, a figure that will increase to $189 billion by 2020.