Mr. Erik Milito - The House Committee on Natural Resources ...

January 2012
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Economic Projections for Western U.S.
Oil and Natural Gas Development
Oil and gas exploration and development is key to the economic vitality of the regional economy, and the number of new
leases, permits and federal wells drilled will have economic and energy security impacts. Currently, the Western Energy
Alliance estimates that oil and natural gas exploration and development supports 488,000 total jobs 4 in the western
states; employment in the industry accounts for 8.1 percent of total regional employment; and oil and gas employees
in the western states earn more than $27 billion in annual labor income, accounting for 10.3 percent of total regional
labor income (Western Energy Alliance, 2010). For the purposes of this report, we will only narrowly focus on the direct
“upstream” job implications of federal energy policy.
Figure 10 demonstrates the role that leasing and permitting plays in maintaining and expanding western states’
employment. It shows that increased drilling activity is associated with increased employment in the western U.S.
Figure 10:
Relationship Between Drilling Activity
and Employment, 1985–2010*
*Western States (Includes Colorado, Montana, New Mexico, North Dakota, Utah and Wyoming)
Source: BLM Oil & Gas Statistics (2010)
4. <strong>The</strong> Western Energy Alliance estimate includes all downstream employment impacts in the industry, ranging from pipeline transportation to gas station attendants;
therefore this number reflects the total impact on the industry. Our analysis deals with upstream exploration and production related job categories, mapped to
the following NAICS codes, and explained further in this Report. NAICS codes: 211- Oil and gas extraction, 213111- Drilling oil and gas wells, 213112- Support
activities for oil and gas operations.
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