New study shows how oil and gas drive American economy

Cows on a farm adjacent to a pipeline right of way

Pipelines like Line 5 shape quality of life

Aug. 11, 2021

Along with being a key driver of every sector of the economy across the United States, the oil and natural gas industry supported 11.3 million total American jobs in 2019 alone, according to a recent study.

Commissioned by the 102-year-old American Petroleum Institute (API) and prepared by PricewaterhouseCoopers, the study shows the industry’s 2019 total impact on the value of goods and services provided in the U.S. was nearly $1.7 trillion.

“Every state across the countryboth blue states and red statesrely on American energy to fuel each sector of the economy and support millions of U.S. jobs,” API President and CEO Mike Sommers said.

“This study reinforces that America’s economic outlook is brighter when we are leading the world in energy production, and it serves as a reminder of what’s at stake if policymakers restrict access to affordable, reliable energy and make us more dependent on foreign sources.”

The mid-July release of the study comes on the heels of mounting concerns related to shortages and spikes in propane costs. Propane, along with butane and ethane, are byproducts of natural gas production.

At the beginning of July, the price of propane across much of the U.S. was 23 percent higher by comparison to the previous month, hitting the highest price levels since 2014.

Line 5 plays a key role for Michiganders

The propane transported through Enbridge’s Line 5 provides the primary fuel source for 65 percent of the Upper Peninsula and half of Michigan overall.

“Michiganders haven’t experienced the same price spikes and supply shortages that much of the U.S. is experiencing, largely due to the continued operation of Enbridge’s Line 5,” said Mike Moeller, Enbridge’s director of operations for the Great Lakes region.

“That poses the question as to why the Whitmer Administration is attempting to shutter a safe, dependable pipelinean action that assuredly would trigger local fuel shortages and price increases while exacerbating the situation much of the U.S. now is facing.”

If the State prevails in its efforts to shut down a main source of this region’s propane, price spikes would hit the wallets of area residents and business, including farming.

“It could prove devastating, particularly to those who depend on Line 5 to transport propane for their home heat and agricultural activities, such as crop drying,” continued Moeller. 

“It would have a rippling effect across the supply chain at a time when the U.S. can least afford it, particularly as we strive to rebound from a pandemic and bolster economic recovery.”

By the numbers: Data proves pipelines are essential, vital

Findings from the study demonstrate how the oil and natural gas industry is essential to economic recovery in other sectors, such as manufacturing and agriculture, as well as opportunities for job creation. According to the findings, in 2019, the industry directly and indirectly:

  • Produced $892.7 billion in labor income;
  • Supported more than 11.3 million total jobs; and,
  • Generated an additional 3.5 jobs elsewhere in the U.S. economy for each direct job in the U.S. natural gas and oil industry.

Locally, the industry will continue supporting job growth with Enbridge’s planned construction of the Great Lakes Tunnel project.Placed deep below the lakebed, the Great Lakes Tunnel will encase a replacement section of Line 5 in the Straits of Mackinac, increasing safety and environmental protections.

Enbridge is investing approximately $500 million to build the Tunnel, which it estimates will require hiring more than 200 construction workers.

Click here to review the study in its entirety.