Sunday, August 22, 2021

OIL INDUSTRY PRESS RELEASE
New study touts Gulf oil industry's contributions to U.S. economy

Keith Magill
The Courier

Gulf of Mexico oil and gas development supported 345,000 jobs in the U.S. and contributed $28.7 billion to the nation's economy in 2019, an new industry study estimates.

The study, released Thursday by the National Ocean Industries Association, says those numbers are projected to grw. But officials say whether that happens depends in large part on efforts by the Biden administration and other political leaders to reduce the pollution, rising seas and other ill effects greenhouse gasses from fossil fuels are wreaking on the planet.

"The Gulf of Mexico has transformed into a national strategic infrastructure asset, and we must make every effort to sustain it through a predictable regulatory system that includes regularly scheduled lease sales and continued permitting," association President Erik Milito said.

The study, "The Gulf of Mexico Oil & Gas Project Lifecycle: Building an American Energy & Economic Anchor," was conducted for the group by the consulting firm Energy and Industrial Advisory Partners.


The National Ocean Industries Association, whose 120 members include mostly offshore-oil-service companies, hopes the study will help inform ongoing debate over the nation's energy future, Milito said.


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A federal judge granted the state's request in June to temporarily halt President Joe Biden's ban on new oil lease sales in the Gulf.



However, Milito said, so far the Biden administration has taken no steps to restart the twice-a-year lease sales that seek bids from companies interested in exploring for oil in the Gulf. Lawyers for the state, led by Louisiana Attorney General Jeff Landry, have filed motions asking the judge to force the Biden administration to schedule the lease sales.

Milito and other industry officials contend that limiting U.S. drilling will encourage more oil production in foreign countries and higher greenhouse gas emissions.

"President Biden should fulfill his legal obligation to schedule and hold offshore oil and gas lease sales and abandon the shortsighted leasing pause," Milito said. "As long as Americans depend upon oil and gas for modern life, it must come from somewhere, and it is clearly better to get oil and gas here at home than from a foreign state with weak environmental safeguards."

One of the key points the study makes clear is that the ban, though it did not stop companies that already have leases from drilling, is still impacting jobs and spending, Milito said. That's because activity starts long before companies even bid on Gulf leases.

The typical deepwater project takes about 30 years from start to finish, the study says. Throughout that lifecycle, the project results in about $8.8 billion in spending and $3 billion in direct wages. An average of 1,435 people are directly employed by the project over that time, along with another 2,200 indirect jobs.

On a single deepwater project, about 80 people are directly involved in the first two years of planning and preparation, jobs that include engineers, attorneys, data scientists, geologists and others, the report says.

With Gulf lease sales in limbo, much of that activity is on hold, Milito said.

Among other study highlights:

More than 200 different job titles are involved in the typical deepwater project in the Gulf.

The average wage for the Gulf oil industry, $69,650 a year, is 29% higher than the national average.

Every U.S. state has jobs and investments tied to the Gulf oil industry.

Throughout its 30-year lifecycle, a typical deepwater project supports about 3,640 direct and indirect jobs combined. But the number of jobs varies greatly over the project's various stages, peaking at 14,500 during the most active years.

"Offshore energy projects are capital and labor intensive," he said. "It's all the different types of economic activities throughout throughout the country. There is little appreciation for the fact that this industry builds a city in the middle of the ocean, in the middle of the Gulf of Mexico, and they maintain that city for 30 years. And that city requires billions of dollars of investment and thousands upon thousands of workers throughout the life of that of that project."



U.S. Economic Recovery Hinges on Oil & Gas Industry: Study

America’s natural gas and oil industry will need to serve as a vital driver of the nation’s post-pandemic economic recovery, according to a new study.

The industry counts as critical to every sector of the U.S. economy and supports millions of jobs across all 50 states, says a study by PricewaterhouseCoopers that compiles the latest available government data.

The 134-page study, which explores the economic impact of the oil and natural gas industry, found that the business supported 11.3 million jobs and contributed nearly $1.7 trillion to the U.S. economy in 2019.

The study authors reported that the impacts are the result of three channels:

​•​ Direct impacts from the employment and production within the oil and natural gas industry.
​•​ Indirect impacts through the industry’s purchases of intermediate and capital goods from a variety of other U.S. industries.
​•​ Induced impacts from the personal purchases of employees and business owners both within the oil and natural gas industry and its supply chain, as well as from the personal spending by shareholders out of the dividends received from oil and natural gas companies.

In addition to supporting well-paying jobs, the natural gas and oil industry, directly and indirectly, contributed an estimated $1.7 trillion to the U.S. economy in 2019, representing 7.9 percent of the U.S. gross domestic product.

Researchers found through wages, taxes, capital investments, and support to other industries, the economic impact extends beyond traditional natural gas and oil-producing states.

“Every state in the nation has a stake in continued access to U.S. natural gas and oil reserves, which are critical for the nation’s economic recovery,” the study authors wrote.

In short, as the nation continues to recover from the pandemic and the economic downturn that resulted, the natural gas and oil industry will serve as an engine for long-term growth.

“The industry continues to create good-paying jobs and deliver reliable American energy to enterprises, including health care, retail, manufacturing, education and more, in communities across the nation,” researchers concluded.

According to the findings, in 2019, the natural gas and oil sector directly and indirectly:

​• ​Supported more than 11.3 million total jobs or 5.6 percent of total U.S. employment.
​•​ Generated an additional 3.5 jobs elsewhere in the U.S. economy for each direct job in the U.S. natural gas and oil industry.
​•​ Produced $892.7 billion in labor income, or 6.8 percent of the U.S. national labor income.
​•​ Supported nearly $1.7 trillion to U.S. gross domestic product, accounting for 7.9 percent of the national total.

The U.S. Energy Information Administration noted that global oil and liquid fuels consumption is expected to surpass 2019 levels in 2022, as economic activity and travel patterns normalize.

“This represents an opportunity for the U.S. to meet the world’s rising demand for affordable, reliable fuels with homegrown natural gas and oil,” American Petroleum Institute President and CEO Mike Sommers wrote in an email.

“That said, America’s economic outlook depends on federal and state policy proposals that incentivize resource development, modernize energy infrastructure and streamline burdensome regulations,” Sommers wrote. “The nation’s hard-fought energy security and GDP growth are at stake, even as the natural gas and oil industry continues to drive the nation’s post-pandemic recovery.

“As America’s economy comes back, the natural gas and oil industry will serve as the foundation for long-term growth and prosperity,” he said. “Every state across the country — both blue states and red states — rely on American energy to fuel each sector of the economy and support millions of U.S. jobs. This study reinforces that America’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.”

Click here to view the full report.

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