The nation's energy boom, stoked by technological advances both onshore and offshore, drove significant economic growth for the oil and gas industry, which also fueled a corresponding population boom in resource-rich areas such as North Dakota and Texas between 2007 and 2012, according to the U.S. Census Bureau.
The bureau's Economic Census Advance Report, released Wednesday, provides the first comprehensive look at the U.S. economy since the Great Recession, supplying data on a series of key metrics across more than 1,000 industries. The report comes out every five years.
The latest report showed remarkable growth in the "mining, quarrying, and oil and gas extraction sector," which was among the fastest-growing employers between 2007 and 2012, tracking the renaissance in the country's onshore oil and gas fields.
Employment across the sector increased by 23% to 903,841 jobs during the five year period, while revenues jumped 34% to $555 billion in the same time.
Economist Ned Hill, chairman of the public affairs department at Cleveland State University, who studies the economic impact of the oil and gas industry, said Wednesday's advance report will be of critical importance and "serve as a historical benchmark for the industry at a time when the starting pistol was going off.
"It doesn't surprise me because of where [the report] started from. It sort of predates development in the Bakken, and it's really a benchmark from when things got started there around 2007, when you had early drilling going on there and the mass deployment of hydraulic fracturing (fracking)," Hill told NGI's Shale Daily. "The numbers also start from the bottom of a horrible recession. They were very low at the time, and the technology wasn't there. The only way to go was way up, and the numbers start with the full involvement of the Bakken and the full involvement of the Eagle Ford."
The five-year period also covers the ascent of other major shale fields such as the Utica and Marcellus in Ohio, West Virginia and Pennsylvania from roughly 2008-2011.
Often referred to as the "industrial census," the report showed that the number of business establishments within the mining, quarrying, and oil and gas sector rose by 26%. The oil and gas industry alone employed about 192,000 people, for a 27% increase over the five-year period, while revenues grew by 31% to reach $333 billion and payroll grew by 60% to hit $15.4 billion.
"If the data comes from the federal government, we always ask where it came from and how," Hill said. "We don't take it with an uncritical eye, but given how this report comes from [Internal Revenue Service] data and the bureau's longitudinal data, it is highly accurate and one of the crown jewels of the census department."
Still, Hill said it's important that the public and business leaders fight the urge of "irrational exuberance" surrounding the industry's trajectory, as certain factors will influence its growth rate going forward. He did say, however, that if the price of natural gas goes up and if demand for more hydrocarbons persists in the automotive and industrial sectors, among other things, the bureau's next industrial census is likely to show even more increases for the industry.
Wednesday's release was only a national survey. The bureau will publish more detailed reports by geography and industry over the next two years.
Analysts at Wells Fargo Securities said the report's authority should help influence national and state policies at a time when the oil and gas industry is experiencing pockets of resistance and pushing for more exports amidst geopolitical crises like the one unfolding between Russia and Ukraine.
"In our view, the report underscored the importance of oil and gas in a still-fragile economy," the bank said in a note to clients. "While we are not economists or political experts, we believe it would be tough for any politician to push hard against an industry that is creating quality jobs in the current economic state."
A separate report on population estimates released by the bureau on Thursday showed that oil- and gas-rich areas in and near the Great Plains contained many of the fastest growing areas in the country last year. Of the nation's 10 fastest-growing metropolitan statistical areas, six were within or near the Great Plains and near to some of the country's largest oil and gas fields, including Odessa, TX; Midland, TX; Fargo, ND; Bismarck, ND; Casper, WY and Austin-Round Rock, TX.
The same was true of micropolitan statistical areas, those ranging in size from 10,000 to 50,000 people, near oil and gas development. Seven of the fastest growing micro-areas were located in or near the Great Plains, with Williston, ND, ranked first in growth, followed by Dickinson, ND, and Andrews, TX.
Although the rapid pace of development in the Bakken Shale has strained housing, schools, infrastructure and social services in North Dakota, officials there welcomed the bureau's latest reports. As recently as 2007, state records indicate that North Dakota was experiencing a net out-migration, or exodus of its population. Since the rebirth of oil and gas development in the state, Kevin Iverson, manager of the census office at the North Dakota Department of Commerce says the changes have been dramatic.
"The growth was widespread across all regions of the state with 38 of the state's 53 counties gaining population," Iverson said. "This is a major turnaround from just a few years ago when only a handful of counties experienced growth and the majority experienced yearly declines in population."
The population boom has led to a sharp spike in the state's employment, and oil and gas development there continues to attract more investment and new workers to the state, said Commerce Commissioner Al Anderson.