Study finds hydraulic fracturing added 725,000 jobs during the Great Recession
The energy boom brought on by hydraulic fracturing helped to soften the blow from the Great Recession, a new study conducting by the National Bureau of Economic Research found. Between 2005 and 2012, 725,000 jobs were added to support the oil and gas industry as it rapidly expanded thanks to hydraulic fracturing.
Researchers conducting the study analyzed data from over 3,000 U.S. counties and determined that within 100 miles of new production, $1 million of extracted oil and gas generated $243,000 in wages, $117,000 in royalties and 2.49 jobs.
“Aggregating to the national level we conclude that aggregate employment rose by 725,000 jobs due to fracking, causing a reduction in the U.S. unemployment rate of 0.5 percent during the Great Recession,” according to the study.
The study did not take into account the impact of lower energy prices to consumers, but did look for correlations between hydraulic fracturing and crime, and found no evidence of an increase.
Oil and gas jobs on the decline
Despite the positive impact hydraulic fracturing had on oil and gas employment in the midst of the Great Recession, the energy glut that followed has pushed prices down, and taken jobs in the industry along with them. Since the rapid decline in oil prices in November 2014, the number of jobs in the oil and gas industry has declined by 7%, according to information from the Bureau of Labor Statistics. From September to October of this year alone, the number of oil and gas industry jobs declined by 1.92%.
Even as the number of jobs in the industry falls, overall unemployment in the country continues to trend downward. The lower level of unemployment at the national level was used by President Obama to explain why his administration would formally oppose TransCanada’s (ticker: TRP) Keystone XL pipeline project after seven years of permitting red tape and delays.