Study shows ‘vast economic impact’ of West Virginia’s oil, gas industries | State Journal News
In 2019, the natural gas industry in the Mountain State generated $11.2 billion toward the state’s gross domestic product — including $5.2 billion added to total labor income.
As economic activity, travel patterns and consumption continue to grow during the post-pandemic recovery, the U.S. Energy Information Administration expects global oil and liquid fuels consumption to surpass 2019 levels in 2022.
“As America’s economy comes back, the natural gas and oil industry will serve as the foundation for long-term growth and prosperity in West Virginia,” said API President and CEO Mike Sommers. “This study reinforces that West Virginia’s economic outlook is brighter when we are leading the world in energy production, and it serves as a reminder of what’s at stake if policymakers restrict access to affordable, reliable energy and make us more dependent on foreign sources.”
According to the findings, in 2019, the oil and gas industries directly and indirectly supported 82,000 total jobs (32,300 direct and 49,700 indirect), or 9.2% of West Virginia’s total employment.
The industries also generated an additional 1.5 jobs elsewhere in the state’s economy for each direct industry job and provided $5.2 billion in labor income ($2.5 billion direct and $2.7 billion indirect) to West Virginia, or 11% to the state’s total labor income.
Indirect jobs supported by the industries include: 13,200 jobs in exploration and production, 26,620 service positions, 5,700 wholesale and retail positions, 2,720 construction jobs, 3,150 jobs in transportation and warehousing, 2,230 jobs in manufacturing and 9,220 other jobs.
The industries contributed $11.2 billion to West Virginia’s gross domestic product ($6.8 billion direct and $4.4 billion indirect), or 14.2 percent to the state’s total.
“These are incredible numbers, and they demonstrate just how important natural gas is to West Virginia’s economy and the nation,” said Charlie Burd, executive director of the Gas & Oil Association of West Virginia. “The U.S. will rely on natural gas as it recovers from the pandemic.”
The study also looks at the U.S. oil and gas industry as a whole.
In 2019, the oil and natural gas industry directly provided 2.5 million jobs for American workers, paid $318.6 billion in wages, salaries and fringe benefits and proprietors’ income, and generated $763.3 billion in GDP.
The industry’s direct national impact on U.S. jobs, labor income and value added ranged from 1.2% to 3.6% in 2019.
Total economic impact — including direct, indirect and induced impacts from both operational and capital spending — ranged between 5.6% and 7.9% of all U.S. jobs, labor income and value added in 2019.
The study estimates that the U.S. oil and natural gas operations directly or indirectly supported 9 million full-time and part-time jobs in the national economy in 2019.
Further, capital investment supported an additional 2.3 million jobs in the national economy.
Combining the operational and capital investment impacts, the oil and natural gas industry’s total employment impact on the national economy amounted to 11.3 million full-time and part-time jobs in 2019, accounting for 5.6% of total U.S. employment.
The associated labor income — including wages and salaries and benefits as well as proprietors’ income — from jobs directly or indirectly supported by the oil and natural gas industry through operations, capital investment and household spending out of dividend payments is estimated to be $892.7 billion, or 6.8% of total U.S. labor income in 2019.
According to information from the U.S. Energy Information Administration, consumption of global petroleum and other liquid fuels will grow by 5.3 million barrel per day in 2021. This growth would follow a decline of 8.6 million barrels per day in 2020. Forecast growth in global oil consumption of 3.7 million barrels per day in 2022 would bring global oil consumption to 101.4 million barrels per day, which would be 0.4 million barrels per day higher than in 2019.
Senior Staff Writer Charles Young can be reached at 304-626-1447 or email@example.com
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