Oil & natural gas stimulate North Dakota economic and job growth

peopleOil and natural gas are driving the U.S. economy through a major energy boom and that boom is rippling through the economy of North Dakota, supporting business activity across the state. This finding grows out of a new American Petroleum Institute survey of domestic oil and natural gas vendors, which offers a glimpse into the job and business creation engine that is the current oil and natural gas industry. The survey shows that at least 876 businesses, located across North Dakota’s at-large congressional district, are part of the larger oil and natural gas supply chain.

The survey’s snapshot of state-by-state activity reinforces the impressive level of industry success throughout the country that is documented in a recent PriceWaterhouseCoopers study conducted for the American Petroleum Institute. That study found that the oil and natural gas industry in North Dakota supports some 64,000 jobs, which is 12 percent of the state’s total employment. The amount of North Dakota labor income supported by the oil and natural gas industry comes to $3.8 billion annually. That’s 13.1 percent of the state’s total labor income.

avr annual salaryThese job and labor income figures demonstrate that the people of North Dakota enjoy significant benefits from energy development. The benefits show up in the state’s salary statistics as well. Thus, while the average annual salary in North Dakota across all industries and sectors is $48,740, the average oil and gas industry salary (excluding gas stations) is very substantially higher—$90,171 annually. Overall the industry supports $6.6 billion of the North Dakota economy. That’s 12.3 percent of the state’s total economic activity.

North Dakota ranks 2nd in oil production, though 15th in natural gas production.  It is one of the nation’s top energy-producing states. North Dakota particularly benefits from the production of oil and natural gas from shales and so-called “tight formations,” energy development that uses the proven engineering technologies of hydraulic fracturing, or “fracking,” and horizontal drilling. Total jobs supported by these activities in North Dakota reached 71,824 in 2012, and that job total is expected to rise to 114,240 in 2020.

Precisely because of industry development at the Bakken Shale formation, located in the western part of the state, North Dakota is second only to Texas in terms of oil production and boasts the lowest unemployment rate in the country—2.6%. And Americans, including the people of North Dakota, get it. A telephone poll of 1,012 registered voters across the country, conducted on behalf of the American Petroleum Institute, found that 77 percent of Americans, regardless of party affiliation, support increased production of oil and natural gas resources located in the United States.



1. American Petroleum Institute, “API Onshore Oil and Gas Vendor Identification Survey,” Washington, D.C., 2014. The survey was distributed to API members in January 2014 to collect information for the period October 2012 to September 2013. Included are companies that provide goods and services for onshore oil and natural gas development, whether as operators, contractors, service companies, suppliers, or vendors.
2. PriceWaterhouseCoopers, “Economic Impacts of the Oil and Natural Gas Industry on the U.S. Economy in 2011,” Washington, D.C., July 2013. Prepared for API using the IMPLAN input-output modeling system, based on 2011 U.S. Bureau of Economic Analysis data.
3. Information cited in this paragraph comes from the Bureau of Labor Statistics, Quarterly Census of Employment and Wages (preliminary data for 2013 accessed July 2014); and PriceWaterhouseCoopers, “The Economic Impacts of the Oil and Natural Gas Industry on the U.S. Economy: Employment, Labor Income and Value Added,” 7/12/13 (based on 2012 IMPLAN database).
4. EIA, “Rankings: Crude Oil Production, April 2014 (thousand barrels),” accessed 7/31/2014. http://www.eia.gov/state/ranking/?sid=UA#/series/46. EIA, “Rankings: Natural Gas Marketed Production, 2012 (million cubic feet).” accessed 7/31/2014. http://www.eia.gov/state/rankings/?sid=US#/series/47. IHS Inc., “America’s New Energy Future: The Unconventional Oil and Gas Revolution and the U.S. Economy,” Washington, D.C., December 2012.
5. Bureau of Labor Statistics, May 2014, http://www.bls.gov/web/laus/laumstrk.htm.
6. “What America is Thinking on Energy Issues.”http://www.api.org/news-and-media/news/newsitems/2014/july-2014/voters-say-usshould-do-more-to-develop-oil-natural-gas” the results of a national poll conducted by Harris for API July 10-13, 2014. Click on “national poll” to see how percentages of voters answered this and other questions.
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