Oil and gas in 2010 compared to 2009

Comments

5 comments

  • Avatar
    DougO
    Direct employment is based on output per worker. So if the price of oil and gas (output) goes down the direct employment goes up (I don't remember what happened between 2009 and 2010.) We get our national output from the DOE oil and gas production website - number of units produced times average price. The employment in extraction, unfortunately, is dominated by proprietors which is not necessarily based on output. If the number of partnerships or new oil/gas producing land owners were to increase it could drop the output per worker with no regard to output. If profits were to increase relative to the output, then there is less indirect per million dollars of output. Employment for Drilling is more stable as it is more heavily weighted to wage and salary workers. Output comes from BEA (projected one year as it is lagged). The difference here can be attributed to decreased output per worker (increased direct) and increased proprietor income (from BEA REA - was REIS also projected one year) which would cause a decrease in indirect employment and a counterbalancing increase in induced employment.
    0
    Comment actions Permalink
  • Avatar
    jsidon
    Thank you for the response Doug. I want to make sure I’m interpreting this explanation correctly – with respect to O&G extraction. In Utah, for example, the direct employment multiplier increased 53% from 2009 to 2010 from 2.9 jobs/$1M to 4.5 jobs/$1M while the indirect employment multiplier decreased 20% from 1.5 to 1.2. Furthermore, the induced employment multiplier increased by 52% (2.8 to 4.3). This change may imply a substantial increase in proprietors in this sector as well as a relative increase in profits compared to output. Is the reason for the relatively larger increase for direct effects compared to indirect due to leakage? Could another explanation be that these industries are preforming more work “in-house” rather than utilizing supporting industries for certain goods and services? Thanks again.
    0
    Comment actions Permalink
  • Avatar
    jenny
    All the increase in direct employment tells us is that there were more employees per $1 of output than there were last year. The data do not tell us whether the increased employment was made up of wage and salary workers, proprietors, or some combination of the two. Employment is merely descriptive, in the sense that it does not (directly) generate further impacts. The indirect effects stem from Intermediate Expenditures (which went down per $1 of Output), while the induced effects stem from Labor Income (which is Employee Compensation + Proprietor Income and went up per $1 of Output). Because Proprietor Income per $1 of Output increased, this may imply an increase in proprietor profits; however, corporate profits (Other Property Income) actually fell. I would suggest spending some time with the Explore > Study Area Data reports - you will find them very helpful in understanding the differences you are seeing. [attachment=249]Copy of Multiplier comparison.xlsx[/attachment]
    0
    Comment actions Permalink
  • Avatar
    jsidon
    Thank you for the reply Jenny. Unfortunately, I'm still struggling to wrap my hands around the significantly uneven changes in Sectors 20 and 28 between the 2009 and 2010 IMPLAN data. I'm attaching a spreadsheet that builds on your suggestion to explore study area data. I've included data from fives states. In each case, the proportional changes in employment levels differ significantly from changes in output. In running an impact analysis, you can imagine that we are stuggling to explain how employment impact estimates increased [u]substantially[/u] while production levels stayed the same or decreased. Is there any more insight you could provide for interpreting these data? Is it possible to share with me the price and production values underlying these to sectors?
    0
    Comment actions Permalink
  • Avatar
    DougO
    Here are the underlying data for the US, which the state data reflect: Employment data for Oil and Gas Extraction is based on proprietor data from BEA REIS (lagged one year and projected to the current year based on the change in BLS QCEW wage and salary employment between the two years) and current year wage and salary employment data from BLS QCEW data: IMPLAN 2010: 786,808 REIS 2009 799,100 IMPLAN 2009: 477,091 REIS 2008 488,900 (Note that when REIS released 2009 data they revised the 2008 estimate to 575,000, but we do not revise IMPLAN data once it has been released) IMPLAN Estimate of oil and gas outputs is largely based on gas and oil production and average prices from the www.eia.gov website: IMPLAN 2010: $211 billion EIA: $261 billion IMPLAN 2009: $218 billion EIA: $218 billion IMPLAN's output estimate for 2010 is about 20% low, but even using $261 billion the comparable output per workers are: 2010: 332,000 per worker 2009: 458,000 per worker I suspect the drop in output per worker was caused by a large number of new landowners and partnerships involved in the ramping up of shale gas fields. Note, you may wish to edit sector 20 outputs, proprietor income, other property income and ibt upward by 20% to reflect the difference from the EIA source, but the difference in output per worker will remain.
    0
    Comment actions Permalink

Please sign in to leave a comment.