ShareThis Page
Business Headlines

Western, middle states thrive with energy boom

| Saturday, June 28, 2014, 9:00 p.m.

WASHINGTON — While the national business outlook remains tepid, the energy sector is driving fast economic growth in some states.

A drilling boom for oil shale and natural gas has spurred prosperity throughout the middle of the United States. Despite having mostly smaller economies compared with coastal states, these states will continue growing for at least five more years, energy economists project, and they'll have a positive impact on American jobs and the trade balance.

“It's a boomtown mentality, something the West hasn't seen for a long time,” said Scott Anderson, senior vice president and chief economist at Bank of the West in San Francisco. “You start to think back to the gold rush days in California. You really do see that middle strip of the country outperforming the coasts for a change.”

In 2010, East Coast states generated 38 percent of the nation's gross domestic product, the sum of all goods and services produced. Last year, the East Coast produced 36 percent of the American GDP in dollars, while Midwest states increased by 1 percentage point to 14 percent of the national total. That's according to an analysis by McClatchy of a report published in June by the Bureau of Economic Analysis, part of the Commerce Department.

North Dakota's gross domestic product grew 9.7 percent from 2012 to 2013, the most of any state and much higher than the national growth rate over the same period of 1.8 percent, according to the bureau's report.

An analysis by McClatchy of employment numbers from the Bureau of Labor Statistics shows that when they're overlapped with growth data, there's a strong correlation between state-level growth and the dramatic increase in post-recession mining jobs through the Rockies and North Plains.

States with thriving energy sectors boost the local employment picture and draw people from other states who otherwise had few job opportunities, experts say. Residents in North Dakota live the job boom on a daily basis.

Vicky Steiner points to the number of out-of-state license plates in her town of Dickinson, N.D., rising quickly in the past couple of years. On a recent stop at the local Wal-Mart, she saw plates from Missouri, Michigan and Louisiana. She said towns across her state were “bursting at the seams,” trying to provide civic services for their growing populations.

“We've been so insulated from the recession we have a hard time understanding it,” said Steiner, the executive director of the North Dakota Association of Oil and Gas Producing Counties, a nonprofit community organization in Dickinson. “A lot of people who really wanted oil and gas jobs are willing to make the sacrifice to move here for the money.”

Workers arriving in North Dakota to extract natural gas and oil shale — sedimentary rock that contains a petroleum-like substance — earn $100,000 a year and more, Steiner said. North Dakota's story is mirrored in surrounding states with similar tales of higher-than-average GDP growth and spikes in energy jobs.

Wyoming, Colorado, Idaho, Montana, Texas, Oklahoma, Utah, North Dakota and South Dakota recorded GDP growth of 3 percent or higher last year, well above many of the coastal states, according to the Bureau of Economic Analysis report. They also experienced an upward tick in oil-and-gas drilling jobs after the recession ended.

“For the states with the fastest-growing GDP, a lot of that growth can be attributed to the energy sector,” said Michael Wolf, an economist at Wells Fargo Securities in Charlotte. “Assuming that prices stay relatively stable, I think we can expect continued growth.”

New drilling technologies allow for extraction in previously untapped regions of the nation. Mining, a category that encompasses oil and gas drilling, accounted for more than two-thirds of Wyoming's GDP growth as a percentage last year and almost half for Colorado.

Oil and gas extraction drove 14 percent of the GDP growth in Texas, a diverse state economy that's the nation's second largest.

The number of post-recession oil-and-gas drilling jobs in Middle America is quickly rising. Oklahoma had 43,800 mining employees in 2010; last year it had nearly 60,000 — a 36 percent jump.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.

click me