... Benefits of the Oil & Gas Industry

Of Benefits and Communication

We often hear of the benefits of the oil and gas industry in North America from within its ranks, but there is still widespread skepticism in the general public. Opponents of developing oil and gas resources from shale or the Canadian oil sands have done a good job of tapping into mainstream media to spread their message. They wield social media like a sword and seem to have gained acceptance among young people, specifically.

Meanwhile, IHS Global Insight just released a study, “Supplying the Unconventional Revolution: Sizing the Unconventional Oil and Gas Supply Chain,” which shows economic benefits of the U.S. energy boom. The report measures jobs, labor income and economic output in 56 different supply chain industries in the lower 48 states each year from now through 2025.

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The study was commissioned by the Energy Equipment and Infrastructure Alliance (EEIA), an organization that supports shale energy supply chain companies. IHS reported that shale energy development will result in the creation of more than 233,000 jobs between 2015 and 2025, and found that total labor income generated by the energy sector supply chain could reach $60 billion by 2025, an increase of 46 percent compared to 2012 figures.

“These are very well-paying jobs, and they exist throughout the country, not just in the shale oil and gas production areas,” said EEIA president Toby Mack. “And the taxes paid by these companies and workers are benefitting every citizen of the nation.”

Energy supply chain jobs account for 41 percent of all jobs attributable to shale energy activities in the country throughout the report’s forecast period. The jobs cited only include those directly attributable to supporting energy operations. Related employers include construction contractors, construction equipment manufacturers and dealers, logistics companies, well services providers, engineering and architectural firms and materials suppliers.

These jobs earn an average income of more than $79,000, compared to an average of $68,000 for all American workers, according to the EEIA, which expects employment in this sector to grow by 2.9 percent annually vs. 1.1 percent average annual growth of total U.S. employment.

By and large, this is good news. But how will it be received by the public? And more importantly, how is the industry communicating this news?

According to a Sept. 25 article by Gene Lockard, published by the online oil and gas industry news source Rigzone, the oil and gas industry struggles to communicate with the public when it comes to the fiscal benefits of things like hydraulic fracturing and shale energy. The article reported the results of a CBC/Radio-Canada poll released in September that showed the population among those polled were evenly split on whether hydraulic fracturing was important to the economy, even though those same respondents said they were concerned with growing the economy and creating jobs.

Citing economist Karr Ingham, who created the Texas Petro Index (TPI) for the Texas Alliance of Energy Producers, the article indicated that the industry has a communication problem.

“They don’t do it as well as they might partly because it’s not what they do,” Ingham told Rigzone. “What they do, they do very well, and that is to produce oil and gas. They have improved their technology, they have increased economies of scale and they are getting much more efficient. That’s what they prefer to do, rather than having to put out fires from anti-industry groups.”

Ingham added that industry opponents “will say virtually anything to bring public opinion around to their side.”
Our own Mike Kezdi reported in May about the oil and gas industry’s initiative to better connect with the public, but it’s clear that work remains an ongoing process.

As Ingham said in the article, the industry has to get the message out that the oil and gas industry is providing stable, sustainable, abundant and affordable energy, and that the net effect of developing these resources is “staggering in terms of the economic benefit and job creation.”

Brad Kramer
Managing Editor
Twitter: @NAOGP1

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