2018 OFFICIAL PUBLICATION OF THE MONTANA PETROLEUM ASSOCIATION
The Continuing Contributions of the Oil and Gas Industry
to the Montana Economy
Modern energy use, made possible by fossil fuel technology, has
revolutionized the lives of individuals around the world. In particular,
access to abundant, reliable, and cheap energy has helped power the
modern economies and support the higher standards in developed
countries. Whether we are discussing work productivity, climate controlled
building atmosphere, e cient transportation, or the way people
spend their leisure time, access to modern energy enhances nearly
every aspect of our quality of life. It is no wonder then, that a vibrant
fossil fuel sector plays a very important role in the economic growth
and prosperity of a region.
e oil and gas industry in Montana is a constantly changing landscape,
continuously impacted by shi ing patterns of consumption,
trade, and technological development. ese shi ing patterns a ect
oil and gas prices, and these price uctuations have near and longterm
implications for market participants in the sector. However,
while short-term employment and production prospects are heavily
in uenced by short-term price movements, in the long-term, physical
and human capital continue to accumulate in the oil and gas industry
in Montana. is continued capital accumulation has a longterm
impact on the state economy.
is article reports on an analysis of those continued contributions.
We estimate that Montana’s oil and gas producers, transportation
providers, and re neries in 2017 jointly support 32,000 permanent,
high paying jobs in the state economy, nearly $2.3 billion in income
received by Montana households, as well as over $106 million in oil
and gas production taxes paid to the state of Montana.
Tracking Oil and Gas Activity’s Impacts in Montana
Cheap, abundant, and reliable energy has been a vital –
perhaps the most vital – ingredient to economic prosperity.
e production, transportation and development of the fossil fuel
resources that have ultimately supported modern industrialized
economies such as ours are themselves an important part of that
economy. at is particularly true in states like Montana where energy
activities form an important part of our state’s economic base.
Oil and gas activity adds directly to the economy in Montana in a
variety of ways.
• Oil and gas production in Montana, including both extraction
and the drilling and completion of new wells, supports a broad
spectrum of industry jobs as well as vendors and suppliers;
• e transportation of oil and gas at various stages in production,
through pipeline, rail, trucks and other means, whether sourced
from Montana wells or facilities or otherwise, provide services
that support employment and the state and local tax base;
• e construction associated with expansions and maintenance in
energy production, processing and transportation infrastructure
are an important economic activity which would not exist if it
were not for the presence of the oil and gas industry in our state;
• e oil re neries in Billings, Laurel and Black Eagle are highly
capitalized, high value-added facilities which pay wages substantially
above the state average;
• e services and intermediate goods provided by Montana-based
facilities both within (e.g., mining services) and outside (e.g., food
vendors, security services, equipment repair) the oil industry in
support of oil and gas production in Montana, Wyoming, North
Dakota and elsewhere broaden the footprint of the oil and gas
industry beyond production and transportation.
is oil and gas activity is made more signi cant in the economy
as a whole because of the substantial wages earned by oil and gas
by Patrick M. Barkey and Brandon Bridge
Todd Klassy | www.toddklassy.com