With domestic oil and gas production up by 60% since 2008 we have created over 300 thousand direct jobs in and over 2.1 million jobs overall just related to the unconventional sector of the industry. That is not only good news for unemployed Americans looking for work but for everyone paying their fuel, gas, and power bills each month. According to consultancy IHS, this boom as also increased average household disposable income in 2012 by $1,200. This gain in income comes from direct and indirect reductions in energy costs. First, households are spending less of their total income on utilities, and second lower energy costs have led to a reduction in the cost of goods and services within the broader economy.
Another key impact is the massive amount of money now staying in our local economy vs paying for imported oil and energy. With oil running around $100 a barrel over the past several years that new 3.5 million barrels of daily production is keeping $350 million a day here at home. In addition to that capital we are seeing direct foreign investment come into the US to support the expansion of new manufacturing facilities in energy intensive sectors. With over 100 new factories under development that will add $300 billion to GDP and 1 million new jobs by 2017. This development of new manufacturing investments in the US is a direct result of competitive energy costs that are half of what industry has to pay in Europe or Japan.
This focus was confirmed by Chad Moutray, chief economist for the National Association of Manufacturers, “We keep hearing about manufacturers that are increasing production here,” he said. “There’s been a lot of investment from companies using natural gas, plastic, fertilizers.” This is one of the major follow on effects that are not as obvious as the direct jobs in the oil and gas sector, but I think a far more important indicator of what the energy sector is doing to drive the economic recovery.
It is also important to recognize that the boom in energy jobs is not limited to oil and gas. The solar industry, which I wrote about in a post earlier this week, is also showing some impressive jobs growth. The latest survey from the national solar foundation showed over 23,000 new jobs in that sector last year with growth rates expected to exceed 15% a year in new jobs created.
Energy is what drives our economy and it is clearly one of the key factors driving the current recovery from such a deep recession. Oil and gas is certainly bringing stability to our prices and costs of fuel for our cars, natural gas to heat our homes, and electricity to power our businesses. That is great news we need to hear more about, but it is just as important for Americans to understand that this is not limited to oil and gas, this is also about solar, wind, and the broader manufacturing renaissance across the country.