Bakken Shale / Shale Daily / Rockies/Other / NGI All News Access

North Dakota Oil/Gas Economic Output Reached $43B in 2013, Study Finds

Since 2005, North Dakota's oil and natural gas industry economic output jumped by 750%, topping $43 billion in 2013, according to a study released Tuesday by North Dakota State University (NDSU).

The study confirms the industry's importance to the state's economy, a spokesperson for the North Dakota Petroleum Council (NDPC) said.

Commissioned by NDPC, the report, "The Economic Contribution of the Oil/Gas Industry in 2013," by NDSU's Agribusiness and Applied Economics Department found that more than 55,000 full-time equivalent jobs in the state were directly supported by the oil/gas industry, and another 26,000 secondary, full-time jobs also have been supported by oil/gas.

Study co-author Dean Bangsund, a researcher at NDSU, said that for every dollar spent in the state by the oil/gas industry, another $1.43 in additional business activity was generated. Oil/gas accounted for 80,000 jobs, $9.3 billion in personal income and $4.4 billion in government revenues in 2013.

Bangsund said the economic effects of the oil/gas industry are felt statewide even though the industry activity is concentrated in the western half of the state. The magnitude of the contributions to both state and local government and the considerable volume of secondary economic effects spreads the benefits throughout North Dakota, he said.

State and local government revenues alone have grown by more than $3.73 billion, or 1,150%, from 2005 to 2013, according to the study. Over that period, industry direct employment has grown by nearly 10 times (992%) from 5,000 in 2005 to more than 56,000 in 2013.

The statewide industry group has sponsored a study every two years since 2005, and the economic benefits and impacts have grown and spread during that time. However, NDPC President Ron Ness acknowledged that with the current crash of crude oil prices, "the benefits previously enjoyed by the state government, households and other industries will be much lower as we work through the current price drop -- impacts that many no doubt are already beginning to feel."

Ness warned that the price drop impacts could be made worse through "onerous or unnecessary regulation."

Bangsund and his co-author, Nancy Hodur, research assistant professor at NDSU's agribusiness/applied economics department, surveyed companies doing exploration/production work, transportation, and oil/gas processing, including an assessment of capital expenditures, which had not been tracked in past biennium studies (see Shale Daily, March 19, 2013).

"The positive impacts of oil/gas development extend far beyond just the energy industry and benefit many of our small, independent businesses in the oil patch and across the state," said Rae Ann Kelsch, state director for the National Federation of Independent Business. "This is great news, but what is perhaps more exciting for our organization and members is the fact that the $43 billion [captured in the state] only represents 48% of the total economic output."

Recent Articles by Richard Nemec

Comments powered by Disqus