The Fossil Fuel Industry May Not Help the Planet, But It Employs Millions

The energy debate, particularly in the U.S., is polarized. Some see fossil fuel industries as the enemy, in their pursuit of ever-increasing profits at the expense of the planet. Others ignore or even deny the widely accepted view that oil, gas and coal are negatively impacting our environment every day. Whichever side you are on, there is one basic fact that cannot be ignored: Fossil fuels account for a huge number of jobs, both in the U.S. and globally.

Jul 10, 2014 at 11:12AM

This article was written by Oilprice.com -- the leading provider of energy news in the world. Also check out this recent article:

The energy debate, particularly in the U.S., is polarized. Some see fossil fuel industries as the enemy, in their pursuit of ever-increasing profits at the expense of the planet. Others ignore or even deny the widely accepted view that oil, gas and coal are negatively impacting our environment every day.

Whichever side you are on, there is one basic fact that cannot be ignored: Fossil fuels account for a huge number of jobs, both in the U.S. and globally.

In this argument, though, even the numbers are hotly debated. At the end of 2012, for example, when IHS Global Insights released a report claiming that at that time unconventional oil and gas extraction (primarily hydraulic fracturing) alone accounted for 1.7 million American jobs and would account for 3 million by the end of the decade, their motives and methods were quickly called into question by environmentalists.

There are fundamentally two problems with such reports and with assessing the employment impact of conventional energy.

First, what criteria should be used to calculate jobs attributable to the oil, gas and coal industries? Should we just include employment in the actual extraction facilities or should we broaden it to include support jobs? What about the accountants and lawyers who specialize in the field, or gas truck delivery drivers? What about those employed by the automotive industry? Should we, as HIS attempted to do, account for retail and other manufacturing jobs supported as those employed directly spend their money?

The second problem is simpler. As Baseball Hall of Famer Casey Stengel once memorably told us, we should never make predictions, particularly about the future. Any number of outside factors could influence the overall economy in the next few years, and therefore, jobs in the energy sector.

The only honest thing to do, it seems, is to look at the most recent historical data. Global numbers for employment in conventional energy are not available, but estimates range from four million to forty million or more. If that range seems wide, see the above paragraph, and if the upper end of the range seems high, keep in mind that the Chinese oil company Sinopec alone employs over 1 million people.

There are, though, reliable figures for the U.S., so let's concentrate on those. The Bureau of Labor Statistics breaks down employment by sector in their Current Employment Statistics. I have taken a narrow approach and included only those directly employed by oil, gas and coal companies and in direct support or supply of their products. Even using those restricted criteria, the fossil fuel business employed over 2 million people in America alone as of the end of May 2014.

Calculated number
*Calculated number; breakdown for coal only not available. Coal accounts for 36.9% of mining jobs and total mining support jobs are 426,900. 36.9% of that number is 157,500.
** May include some non-coal mining machinery

Employment in the fossil fuel industries in the U.S is significant and, as shown by the U.S. Energy Information Administration chart below, growing rapidly. The increase in production of oil and gas has, it seems, provided much of the impetus for recovery from the 2008 financial collapse.

Change in Employment 

Source: EIA

There is no doubt in my mind that there are risks to the rapid expansion of oil and gas extraction in America, and to the country's continued dependence on fossil fuels, both in terms of environmental damage and the diversion of resources away from research into the alternative energy sources that will be needed in the future.

When considering those risks, however, we should remember that over 2 million people (and in many cases their families) directly depend on those industries for their livelihood. That level of employment cannot be ignored.

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Written by Martin Tillier at Oilprice.com.

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