Buried in this week’s 213-page August Monthly Energy Review from the EIA (full report here) is the fact that U.S. crude oil production for the lower 48 states is estimated to have reached a 23-year high in July of 5.865 million barrels per day (see chart above, data here). If so, that would be the highest monthly production of crude oil in the lower 48 states in more than 23 years, since April of 1989 when 5.88 million daily barrels of oil were produced. From January-July of this year, the EIA estimates that oil production in the non-Alaska states increased more than 14% compared to the same period last year, boosted by the strong, ongoing gains in North Dakota oil (+66% year-to-date through June 2012 vs. last year) and Texas oil (+35% year-to-date through June compared to 2011).
Thanks to advances in technology (fracking and horizontal drilling), domestic oil production has been increased dramatically since 2010, reversing a quarter-century downward trend in U.S. oil production that started in the mid-1980s. Over the last year, we’ve seen one of the largest annual increases (17%) in domestic oil production (for the lower 48 states) in the history of monthly EIA oil production data going back to 1973.
Accompanying the boom in domestic oil and gas production has been a huge boom in “shovel-ready” jobs for that sector (see chart above, data here). Over just the last two years, employment in the oil and gas industry for drilling-related jobs has increased by more than 23% to 195,500 jobs in July, which is the highest level for those jobs since early 1988, more than 24 years ago. America’s booming energy sector has been creating an average of 85 new jobs every business day for the last year, and those are just the direct jobs for oil and gas extraction, and doesn’t count all of the indirect jobs created throughout the supply chains for oil and gas.
A recent Bank of America/Merrill Lynch report estimates that the economic benefits to the U.S. economy from the booming domestic energy production, especially from the surging output of unconventional shale gas and oil, are approaching $1 billion per day. With all of the concerns about the sub-par growth of the overall economy during the last three years of recovery (2.2% average real GDP growth since June 2009), imagine what the growth rate of the economy would be if we didn’t have the booming oil and gas industry that is bringing energy prosperity and shovel-ready jobs to states like North Dakota, Texas and Pennsylvania.
Bottom Line: America’s booming energy sector, especially the increased production related to shale oil and gas reflected in the 23-year high for domestic crude production and 24-year high for oil and gas jobs, remains America’s “economic bright spot,” and it continues to get better and brighter all the time.