Oil and Gas Industry Leading Economic Sector in Several Western States
A new study outlining the top economic sectors in each state shows that oil and gas extraction is the top industry and contributes billions in GDP in most western states.
The recent report featured in USA Today also found the industry employs thousands of workers whose average salaries stand in the six-figures. The information was compiled by 24/7 Wall Street, which pulled data from the U.S. Bureau of Economic Analysis.
Excluding for government jobs, oil and gas extraction was the number one industry in Colorado, New Mexico, North Dakota, Oklahoma, Wyoming and Texas in terms of economic impact.
Colorado’s oil and gas industry saw the biggest bump of the group of states in terms of overall GDP growth. According to 24/7 Wall Street, the industry saw five-year GDP increase of 112 percent with average salaries standing at nearly $184,000. The data was pulled from 2017 numbers, which were the most recently available, so the numbers are most likely higher today since the industry as a whole has seen a renaissance thanks to the shale revolution.
The oil and gas industry contributes more than $38 billion to Oklahoma’s economy, or about one-fifth of the state’s total output. The sector expanded at 94 percent over the five years surveyed with the state’s 18,000 workers taking home average salaries of almost $148,000.
Unsurprisingly, Texas enjoyed the biggest boon to GDP in terms of dollars. The report found that the oil and gas industry contributed almost $200 billion to the Texas economy, or 12.2 percent of the overall total. A growth of production in the prolific Permian Basin no doubt had a big impact in that number. Overall, the industry grew more than 60 percent over the five years surveyed.
Another state benefiting from the uptick in production in the Permian is New Mexico. The state’s industry saw a 90 percent boost, contributing almost $11 billion in GDP, or nearly 12 percent of the state’s total. In New Mexico, industry workers make an average of $109,000. The oil and gas industry is especially important to New Mexico since the state has struggled economically in recent years. Just last month Western Wire reported on New Mexico’s record revenue levels, driven primarily by oil and gas. Lease sales, royalty payments and other related activity on state trust lands generated more than $1 billion for the state in FY 2019.
Wyoming and North Dakota have also benefited from the industry’s contributions in each state. North Dakota’s industry experienced a 67 percent expansion, with workers taking home an average of $134,000 per year. Wyoming’s industry adds about $5 billion to its economy with workers getting paid $113,000 on average. Combined, Wyoming and New Mexico accounted for two thirds of permits processed by BLM in 2018.
The average salaries for oil and gas jobs far outpaced those in most other states. For instance, health care services is the leading industry in states like Maryland, Massachusetts and Michigan, with average salaries in the $60,000 range.