Energy boom: surges in every sector.

• Author: Polzin, Paul E.
• Position: Statistical data

The new American energy boom has been a bonanza for federal and state government revenues. In Montana, the oil and gas industry paid about $282.1 million in taxes, royalties, leases, and other payments to state and federal governments in 2013.

But the energy boom is not simply about taxes. It is also about people, their jobs, and their wages. Increased energy-related activity is impacting the U.S. economy and certain regional economies that have long been stagnant. Employment in the U.S. energy industry has provided many new high-paying jobs while other sectors of the economy have experienced stable or even declining employment. In addition, certain places across the country that had stable or declining economies are now experiencing welcome growth because of new energy developments. It's not just people in energy industries who are benefiting--workers in industries such as construction, professional services, and accommodations now have greater employment opportunities and higher wages.

The U.S. Economy

The U.S. economy has been mired in a deep recession and a jobless recovery since 2007. The U.S. Bureau of Labor Statistics (BLS) reports that total nonfarm employment in the U.S. had not regained its prerecession peak by 2013. Overall, the number of nonfarm jobs declined about 1 percent between 2007 and 2013.

The oil and gas industry (technically part of mining), on the other hand, increased employment during the same period. Between 2007 and 2013, the number of oil and gas workers increased almost 31 percent.

The oil and gas jobs are high-paying. The BLS reports that the U.S. average annual wage (which excludes employer-paid benefits) in the oil and gas industry was about $108,000 during 2013, the latest full year available. That is more than double the average of $49,800 for all workers.

The Bakken Shale Play

The economic impacts of the new American energy boom are more dramatic when we look at a specific location. On the Montana-North Dakota border--which includes the western edge of the Bakken formation--is one of the newer oil-technology plays that is based on the latest advances in geophysics, nanotechnology, engineering, and production management and has led to the shale-energy revolution. Small rural communities are the ideal laboratory for economic analysis because the economic impacts of energy developments are not masked by other influences and trends.

There are boom-town atmospheres in towns like Sidney, Montana, and Williston...