This week, IPAA through Declaration of Independents, analyzed how United States consumption of petroleum correlates with economic growth. To do this, our economists broke up petroleum consumption by state and broke up the gross domestic product (GDP) which measures economic growth by state. They juxtaposed the results on two color-coded maps of the United States.
Clearly, the maps bear a striking resemblance to each other which identifies the positive correlation that petroleum consumption has on the growth of a state’s economy. In other words, a greater level of petroleum consumption is an integral part of a productive economy. An industrial manufacturing sector cannot exist without the fuel of petroleum to power the process. Plastic, lubricants, asphalt, rubber and many other finished products are also not possible without the value-adding substance of petroleum. To understand more about the consumption-economic growth correlation, please read the entire analysis.
Our economists highlighted this telling fact: Out of the top ten petroleum producing states, nine of them have unemployment rates below the national average.
Where do independents fit into this picture? Independent oil and natural gas producers are the “leaders in the exploration and production of domestic petroleum, which makes this economic development possible in the United States.” Without independents, the supply of American petroleum would be crippled. Without abundant petroleum, economic growth is stunted. When economic growth is stunted, American jobs are lost.
Petroleum powers the economy of this nation overall, evidenced by this strong correlation between states that have high petroleum use and high output. Petroleum is integral in our daily lives, not just as a fuel, but because it is present in common objects that are crucial to living a high-quality life.