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Idea of the Day: Interpreting the Oil Industry’s Dubious Job Claims

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The oil and gas industry is one of the most lucrative industries in the United States. Its five largest companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—have earned more than $1 trillion in profits over the past decade. Yet this industry still fights tooth and nail to cling to its special tax provisions, worth at least $40 billion per decade. One of Big Oil’s most repeated rationales for keeping its exceedingly generous tax breaks, despite oil companies’ enormous profits, is its contribution to the U.S. employment numbers. However, a close look at Big Oil’s claims finds that this employment effect is greatly exaggerated. In fact, our analysis of government employment data identified far fewer direct jobs than the numbers hyped by the oil and gas industry. Furthermore, gas station employees—low-paid workers who sell convenience store goods and petroleum products—make up nearly half of the direct jobs.

Since 2009, the American Petroleum Institute, or API, has repeatedly claimed that the oil and gas industry has supported more than 9 million jobs in the United States. In written testimony before the Senate Committee on Energy and Natural Resources in 2013, API President and CEO Jack Gerard asserted, “Currently, the entire natural gas and oil industry supports 9.2 million U.S. jobs; accounts for 7.7 percent of the U.S. economy and delivers $86 million per day in revenue to our government.” These figures came from a 2009 PricewaterhouseCoopers, or PwC, study, which was paid for by API and employed economic impact modeling to determine direct, indirect, and induced employment impacts using 2007 data.

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This is part of a regular column: Idea of the Day

For more from the same column, click here