Disputing Oil and Gas Industry Claims for Job Creation in the U.S. and in California

The Center for American Progress has taken issue with the claims made by the American Petroleum Institute (API) in its 2013 testimony before the U.S. Senate Committee on Energy and Natural Resources. The API stated that the natural gas and oil industry supports 9.2 million U.S. jobs and accounts for 7.7 % of the U.S. economy, based on two studies which estimated direct, indirect, and induced job effects in the oil and gas industry. The studies were conducted by PricewaterhouseCoopers (PwC) and commissioned by API. The Center for American Progress disputes these claims, basing their own analysis on Bureau of Labor Statistics data for employment in upstream activities (oil and gas extraction, well drilling, and operation support), and downstream activities (petroleum refining, product sales through dealers and gas stations, and pipeline construction and transportation). CAP did not include indirect jobs. CAP estimates that there are less than 2 million direct jobs in the oil and gas industry, and nearly 50% of those jobs occur in gas stations. Their analysis also shows that BP, Chevron, ExxonMobil, and Shell have shed a net total of nearly 12,000 U.S. jobs since 2007.

Another U.S. research centre, NextGeneration, has waded into California’s political discussion about the Monterey Shale development by publishing a series of six articles. In one of these articles, Too Big to Believe, five prominent economists from California universities critique the methodology and results of an influential study published in March 2013, Powering California. Powering California, conducted at the University of Southern California and sponsored by Western States Petroleum Association (WSPA), included optimistic and widely publicized estimates of an increase of 512,000 net new jobs by 2015 and 2.8 million net new jobs by 2020. Yet Too Big to Believe states: “Each of the economists said the study’s findings were unreliable and inflated. They cast doubt on its methodology, which did not base its estimates on any projections for oil production or capital investment in California oil; instead, the study’s authors said they extrapolated from the effects of economic growth in North Dakota, South Dakota and Wyoming.”

In Keeping the Story Straight, the final article in the NextGeneration series, the results of Powering California are contrasted with two other economic impact studies done by industry-related organizations: one by IHS Consultants, and another commissioned by the Western States Petroleum Association and conducted by California State University at Fresno. In both cases, estimated job impacts were “negligible” or modest.

LINKS:

Big Oil, Small Jobs: A Look at the Oil Industry’s Dubious Job Claims is at the Center for American Progress at: http://www.americanprogress.org/issues/green/news/2014/01/22/82571/big-oil-small-jobs-a-look-at-the-oil-industrys-dubious-job-claims/
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Too Big to Believe: Top Economists Doubt California Oil Industry’s Jobs Figures at: http://thenextgeneration.org/blog/post/top-economists-doubt-california-oil-industrys-jobs-figures, and Keeping the Story Straight: Industry Reports at Odds in California Oil at: http://thenextgeneration.org/blog/post/industry-reports-at-odds-on-california-oil

Powering California: The Monterey Shale and California’s Economic Future is at: http://wms.communicationsinstitute.org/energy/powering-california-project/powering-california-the-monterey-shale-californias-economic-future/¬†

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