This blog has previously discussed several different aspects of how the oil and gas industry drives economic growth in the United States. From the benefits generated for the entire nation to the positive impact on communities that host drilling and production operations, there is a lot to celebrate about the energy sector's success in recent years.
Oil and gas development will continue to play a significant role in the economy for years to come, according to an analysis performed by the U.S. Chamber of Commerce, which found that in recent years, "much of the sustained growth in the world has taken place in regions that produce basic commodities like energy and food, rather than in the financial or information capitals."
Gains in other sectors driven by expanding oil and gas activity
The Chamber's analysts also emphasized the fact that the jobs being created by the energy industry "have been an outstanding driver of high-wage employment, with an average salary of upwards of $75,000." This diffusion of capital is causing more than an increase in consumer spending. It is also spurring development in the manufacturing sector, which was hard-hit by the recession but is bouncing back as a result of relatively low energy costs and demand for building materials and oil production equipment.
The link between the oil and gas industry's expansion and manufacturing development was on display in Ohio last month, when industry stakeholders, government officials and community members gathered in Youngstown to commemorate the opening of a new pipe manufacturing facility.
The construction project, which received government support in the form of federal funding for infrastructure development, was profiled in the Department of Labor's June newsletter. According to the DOL, the Youngstown plant is "the first fully integrated oil and gas manufacturing plant in the United States."
Positioned adjacent to the promising Marcellus and Utica shales, the facility will help ensure that the nation's current oil and gas revival is not threatened by a shortage of oilfield equipment. This is critical to sustaining growth across numerous sectors.
Spreading the benefits of the energy renaissance
One of the states that is currently taking action to translate its oil and gas reserves into economic growth is Idaho. According to the Idaho Statesman, two drilling permits for sites north of New Plymouth were approved by the Idaho Department of Lands during June, while a third permit is currently under consideration.
Natural gas and a condensate of petroleum liquids were discovered in the area in 2010. According to Suzanne Budge, executive director of the Idaho Petroleum Council, drilling could begin "any day."
"There's equipment on the site now," Budge told the Statesman. "We could turn gas on to serve consumers this year."
State lawmakers have also acted to put pro-growth policies in place, voting to reform regulations and the composition of the Idaho Oil and Gas Commission. This is important because, as we've discussed, government policies can exert considerable influence on the pace of energy development. Formerly dominated by members of the Idaho Land Board, the commission now includes representatives of multiple stakeholders.
If matched by continued investment from the industry, these developments promise to raise the standard of living throughout the Gem State and drive economic growth in other areas of the country. However, the private sector will need to do its part to deliver this prosperity.
Implementing advanced production equipment can help oil and gas producers generate more value by improving recovery rates at troublesome wells. The hydraulic jet pump is a particularly useful solution because it offers a level of versatility that is unmatched by comparable products.
The unit's streamlined design allows it to be deployed in straight, horizontal or deviated wells and with no downhole moving parts, maintenance needs are minimal. It can even be used successfully at sites where problems with the completion of well casing would limit the effectiveness of other artificial lift solutions.