The debate about expanding domestic production of oil and gas may seem myopic at times, with industry insiders emphasizing the economic advantages of developing fossil resources while environmental activists endlessly pine over the industry's intrusion into their cherished natural spaces.
While there is much to discuss when it comes to how we should go about developing our energy reserves, it seems clear that the benefits of continuing to move forward with new projects far outweigh the associated costs. Below, we'll discuss some of the ways in which the recent increase in oil and gas production has generated new opportunities for Americans of all walks of life.
Support for job creation and economic development
One of the most tangible ways in which the industry's success benefits a broad swath of American society is through the creation of new employment opportunities. In addition to the huge number of people employed in the production of oil and gas products, there are many jobs in related sectors that are indirectly supported by the industry's activities.
For instance, firms involved in construction and transportation are provided with a considerable number of work opportunities in connection with oil and gas projects. Meanwhile, American companies in downstream sectors such as chemicals and manufacturing are at their most competitive when the domestic oil and gas industry is growing, as this ensures a steady supply of key inputs and helps keep down the cost of energy.
A report from PricewaterhouseCoopers suggested that the total number of Americans employed in jobs supported by the oil and gas industry is significantly more than 9 million. And the boost to competitiveness that companies across all sectors enjoy as a result of low energy prices allows them to support even more jobs.
In addition, the industry's capital spending, which exceeded $450 billion last year and has grown by almost 60 percent since 2007, supports the development of new transportation infrastructure and advanced technology. This broadens the horizons of contemporary science and spurs the creation of new opportunities for researchers, workers and entrepreneurs.
Oil and gas companies also contribute to American society through tax payments to the federal government. According to a report from the American Petroleum Institute (API), the industry's daily payments to the U.S. Treasury total about $86 million—more than any other sector. These funds are essential for supporting a wide variety of government agencies and programs.
Investment opportunities that benefit retirees and public institutions
Corporations are run for the benefit of their shareholders and many different organizations and individuals own a piece of the oil and gas industry, either directly or through mutual or pension funds.
In 2011, the consulting firm Sonecon studied the distribution of energy companies' stock and found that about 50 percent is owned by 401(k)s, IRAs and other retirement funds. Another 20 percent is owned by individual investors, although public and private universities and other institutions also have a substantial ownership share.
Many Americans have also started investing in energy infrastructure through master limited partnerships that own pipelines and other assets. A recent report from the Associated Press indicated that this type of investment has grown in popularity in recent years as low returns on traditional financial products have forced investors to embrace less conventional options.
New production technologies remain key to realizing economic benefits
The broad range of people and organizations that benefit from the success of the oil and gas industry explains why almost 80 percent of voters expressed support for increased development of domestic oil and gas resources in a recent survey conducted by the Western Energy Alliance.
However, despite the breadth of support for increased oil and gas activity, realizing the benefits of development depends on the willingness of well operators to implement new production equipment. Specifically, companies need to acquire solutions that can handle the challenges associated with tapping the unconventional plays that are emerging as increasingly important sources of energy.
The hydraulic jet pump is an especially valuable solution because it is extremely versatile. Jet pumps can be deployed in straight, horizontal or deviated wells and even remain effective in situations where issues with the completion of well casing would make other artificial lift equipment less effective.