Economic Benefits

Economic Benefits

Along with jobs and revenues, the petroleum industry in the western United States provides the affordable energy needed to keep us moving forward, grow our food, manufacture the goods we use every day and to transport them to market. It keeps public transportation and public safety fleets moving, gets our kids to school, parents to work and family members to the doctor.

Property taxes paid by oil producers and refiners help pay for local schools. The contributions of the petroleum industry are essential to maintaining not only our state's economy  but our quality of life.

 

California's Economy Depends On The Petroleum Industry

The petroleum industry is a leading economic driver and major employer in California:

  • 468,000 jobs – The petroleum industry is responsible for 2.3% of total California employment.
  • $40 billion in labor income – Jobs created or supported by the petroleum industry generate 3.1% of California’s total labor income.
  • $85 billion direct economic value – The petroleum industry’s direct economic value in California equaled 3.8% of the state’s entire GDP.
  • $113 billion total economic value – The petroleum industry’s 5.4% total GDP contribution to California alone is larger than 17 U.S. state economies.
  • $220 billion in direct economic output – The petroleum industry’s direct economic output was nearly 7% of California’s total output. This high level of output is noteworthy given the size of our employment.
  • $264 billion in total economic output – The petroleum industry’s combined direct, indirect, and induced economic output equaled 7.7% of California’s total output.

The petroleum industry makes significant fiscal contributions to state and local government in California:

  • $21.6 billion in state and local tax revenues
  • $14.7 billion in sales and excise taxes
  • $1 billion in personal income taxes
  • $3.8 billion in property taxes
  • $990 million in corporate profits taxes

The petroleum industry serves as a valuable source of jobs and economic stability in California’s regional communities:

  • The petroleum industry creates 85,620 total jobs in the Central Valley and contributes $30.7 billion to the region’s economy. Nearly 3 percent of all Central Valley residents are employed in or around the petroleum industry.
  • Southern California is home to 212,220 petroleum industry direct and indirect jobs. The petroleum industry is responsible for $105 billion in regional economic output.
  • California’s Central Coast earns $1.1 billion from the petroleum industry in local tax revenues.
  • The petroleum industry creates 77,050 direct and indirect jobs in the Bay Area and accounts for more than 10 percent of the region’s economic output.
  • Los Angeles County alone earns $5.2 billion annually in tax revenues generated by the petroleum industry. Nearly 6.5 percent of Los Angeles County’s entire economic output can be traced to the petroleum industry.

Source: "Oil and Gas in California: The Industry and Its Economic Contribution in 2012,” Los Angeles County Economic Development Corporation, March 2014.

 

The Monterey Shale Formation Important To The San Joaquin Valley's Ecoomic Future

A recent study conducted by Fresno State concluded that the development of the Monterey Shale could have tremendous impacts on the San Joaquin Valley including:

  • As many as 195,000 direct and local new jobs
  • Personal income in the San Joaquin Valley could top $22 billion
  • Taxable sales valued as high as $6.7 billion locally
  • Increase per capita GDP by $701 to $3,980

Source: "The Petroleum Industry and the Monterey Shale: Current Economic Impact and the Economic Future of the San Joaquin Valley," California State University, Fresno, August 2013.

 

Washington

Petroleum refining in the State of Washington is responsible for providing nearly 2,000 direct jobs, paying an average wage of more than $120,000, nearly two-and-a-half times the statewide average wage. 

Because of these high wages, the fact that the refineries also utilize more than 2,900 well-paid contractors and the capital intensity of their operations, refineries have an employment multiplier of 13.23. 

This means that petroleum refining is responsible for more than 26,000 jobs in Washington State that pay good wages and provide good benefits to workers and their families. As a result, each direct refining job generates nearly $894,700 in state personal income, which adds up to more than $1.7 billion in total economic impact for the State of Washington.

 

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