North Dakota's Booming Oil Economy
If there's any doubt that domestic drilling of oil and gas generate huge and significant positive economic benefits (more jobs, income, output, tax revenues, etc.), the booming economy in North Dakota provides a convincing case study. The Peace Garden State's economy is doing so well on so many different measures, here are some highlights of its ongoing economic success:
1. Monthly oil production dipped slightly in April, but is above its year-ago level by 23% and above the April level two years ago by 78.5% (see chart above). Oil production this year has averaged more than 10.5 million barrels per month, which is double the monthly production levels in 2008, and triple the levels from five years ago.
2. Oil-related employment in North Dakota has more than doubled in just two years, from 6,800 jobs in May 2009 to 15,200 jobs in May of 2011. While the national economy struggles with another "jobless recovery," North Dakota has continued to add jobs, and not just oil-related jobs. The overall state employment level reached an all-time high in May and is 2.5% above the June 2009 level when the recession ended.
3. In the first quarter of 2011, North Dakota led the country with a 6.9% increase in personal income. Second place Wyoming at 2.6% wasn't even close, and North Dakota's increase was almost four times the national average of 1.8%.
4. In 2010, North Dakota led the country with a 7.1% increase in real state GDP, almost three times the national average of 2.6%, and two full percentage points above the 5.1% growth for second-place New York.
5. North Dakota continues to lead the country with the nation's lowest jobless rate. In May, North Dakota's unemployment rate of 3.2% was lower than second-place Nebraska's rate of 4.1% by almost a full percentage point, and was almost six percentage points below the national rate of 9.1%.
6. As a result of North Dakota's booming oil-based economy, tax collections from 2009-2011 have exceeded projections by $237.5 million. Through May, sales tax collections exceeded projections by 13% and income tax revenues by 10.6%.
Bottom Line: North Dakota's impressive economic success clearly illustrates some of the benefits of domestic energy production: more jobs, record economic growth, huge gains in personal income, and even more tax revenues. There's no reason that the economic success of North Dakota can't be duplicated elsewhere, if we would only open up more U.S. land and off-shore areas to domestic energy exploration and drilling.