UM Economist to Testify before Congress about Economic Impacts of Energy Boom

July 23, 2014

MISSOULA – The new American energy boom associated with shale oil and natural gas extraction has led to increased high-paying jobs and stronger rural economies, according to a University of Montana economist who will testify before a congressional committee of the U.S. House of Representatives on Thursday.

In Montana and North Dakota, towns that might have become ghost towns are booming because of the energy-related activities in the Bakken, said Paul Polzin, director emeritus at UM’s Bureau of Business and Economic Research.

“In Sidney, Mont., and Williston, N.D., the oil drilling rigs sprout like wildflowers, the traffic is astonishing and there are no vacancies in the few hotels,” Polzin said.

Polzin will speak before the U.S. House of Representatives’ Subcommittee on Energy and Power about how differing energy policies and regulations are creating differing results as far as job creation and economic growth.

“The streets of Sidney and Williston are crowded with petroleum engineers, drilling managers, environmental specialists and other natural resource workers,” Polzin said. “But these high-paying specialties are not the only ones to benefit from the boom. Almost all sectors of the local economies are experiencing greater-than-expected growth in employment and wages.”

In construction, for example, statewide employment grew 3.6 percent, and average worker wages increased 42 percent from 2003 to 2013, Polzin said.

Professional, scientific and technical services – which include professionals such as lawyers, accountants, architects and computer specialists – grew 21 percent for the same time period, with average wage increases of 87 percent.

In the accommodations industry – which includes workers such as waitresses, cooks and hotel clerks – employment increased by 17 percent, and average wages increased by 44 percent during that 10-year period.

Additionally, in Montana the oil and gas industry paid about $282 million in taxes, royalties, leases and other payments to state and federal governments in 2013, Polzin said. “These trends in energy-producing areas can have a powerful effect in providing higher wages and strengthening rural economies,” he said.


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Contact: Paul Polzin, director emeritus, UM Bureau of Business and Economic Research, 406-243-5113, paul.polzin@business.umt.edu.