New Study Reveals Independents' Role in U.S. Oil and Gas Economic Landscape

The Crucial Role of Independents in U.S. Oil and Gas

A new study released by the American Exploration & Production Council (AXPC) has shed light on the pivotal role that independent producers play in the upstream oil and natural gas sector and their substantial impact on the U.S. economy. Conducted by Rystad Energy, this comprehensive analysis reveals the depth of contributions made by onshore independent producers, emphasizing their significance in both energy production and economic stability.

The report highlights that these independents supported an impressive 3.1 million jobs across the nation, underscoring the direct and indirect employment opportunities created by this segment of the energy sector. In 2024 alone, they contributed $277 billion in labor income and paid a staggering $129 billion in taxes, which represents an astounding 87% of the total economic contributions of the sector during that year.

Anne Bradbury, CEO of AXPC, commented on the study, stating, "Independents are the backbone of America's oil and natural gas production and the economic strength it delivers." This statement reflects the companies' dual role in not only ensuring energy reliability for the nation but also in catalyzing job creation and generating substantial government revenues that benefit communities nationwide.

The study further noted that from 2022 to 2024, independent producers consistently accounted for more than 85% of onshore crude and condensate production, along with 90% of all onshore natural gas produced. This dominance in production is critical as the U.S. positions itself as a global leader in oil and natural gas output.

One of the key findings of the Rystad Energy report is that, in 2024, onshore independent producers contributed $488 billion towards total GDP output. Remarkably, for every dollar these producers contributed directly to the economy, there was a corresponding $1.26 in secondary contributions. This multiplier effect underscores the extensive economic ecosystem surrounding the upstream oil and gas sector.

The sprawling economic impact also includes the generation of 3,172,000 jobs nationwide, with nearly 1.1 million direct jobs attributed specifically to independent producers. This sector engenders a significant amount of labor income, reported at $277 billion, which includes $121 billion from direct jobs and an additional $156 billion derived from supply chain activities and increased consumer spending resulting from higher incomes.

Moreover, the findings reveal that independent producers were responsible for operating 95% of all producing onshore wells and drilling 90% of new onshore wells from 2022 to 2024. This high level of activity is indicative of the critical role that these companies play in not only meeting the country’s energy needs but also in facilitating broader economic growth.

Indeed, the total upstream onshore sector produced a notable economic impact in 2024, with the U.S. leading the charge globally in oil and natural gas production. It was noted that this sector contributed approximately 2% of the total national GDP, accumulating a total of $563 billion. Additionally, the sector supported 3,601,000 jobs throughout the country, encompassing direct, indirect, and induced impacts.

There were significant tax contributions as well, with the onshore sector paying $149 billion in various taxes, including $71 billion to state and local governments and $78 billion allocated to the federal government. This tax revenue is crucial for sustaining community services and infrastructure nationwide.

To summarize, the findings from this pivotal study not only confirm the essential position of independent oil and gas producers in America’s energy landscape but also their unwavering influence on the economic vitality of the nation. As these companies continue to grow and innovate, their impact reverberates throughout the economy, enhancing energy security while fostering job creation and community development.

For more insights, the full study is accessible online, detailing the extensive findings and key metrics that underline the importance of independents in the U.S. oil and gas sector.

About AXPC: The American Exploration & Production Council is a national trade association representing leading independent oil and natural gas companies in the United States. AXPC advocates for policies that support safety, innovation, and economic growth, ensuring that reliable and affordable energy is delivered to consumers across the nation.