While many states throughout the nation struggle to make ends meet, surrounded by economic uncertainty, Texas is booming. Robust investment in the energy industry – from deep-water drilling to above ground production, and everything in between – has allowed the state to succeed despite an inconsistent U.S. economy.
None of this is news to those living in the Lone Star State – and in fact Texas has received a steady stream of national attention for its economic success – however it is worth noting that a key reason for such outstanding growth has been the investment in and development of our nation’s extensive energy infrastructure.
In April 2013 alone, Texas created over 33,000 jobs, which is more than any other state in the country, and nearly one-fifth of all the jobs created in the United States. And that growth was despite a federal payroll tax increase, spending cuts by the U.S. government, and an overall slowdown in the global marketplace.
This boom is reflective of a new energy landscape, very different throughout the country from what it was a decade ago. Recent discoveries and innovation within the natural gas, shale gas, and oil production process have propelled the U.S. to a point of leadership in terms of energy production. This strategic growth has placed us in a position to invest domestically in infrastructure that gives confidence to consumers who are wary of changing energy prices, and stagnant job growth.
One area ripe for investment are Master Limited Partnerships (MLPs). These are businesses primarily engaged in midstream energy activities that include pipelines, storage, processing, and other activities that turn petroleum from producers (some of whom are also MLPs) into useable products and transport them where they are needed.
A sector of the energy industry critical to the nation’s energy lifeblood, MLPs currently support more than 320,000 jobs directly and indirectly and are projected to pay approximately $147 billion in cumulative wages for current and future jobs over the next five years.
Consider that more than 400,000 Texans are employed by the energy industry, with average salaries about $100,000 per year. These are well-paying jobs and they are growing by the thousands. MLPs are no doubt part of those encouraging numbers, and with sound policy, they will be able to continue contributing to the energy rebirth that has been so critical to our collective economic recovery.
Pulling back the curtain on energy production reveals just how much the U.S. owes to those who manufacture, develop, and operate the infrastructure needed to support the energy renaissance the country is currently experiencing.
Texas has doubled its oil output since 2005, producing as much oil as the four next-largest producing states combined. The entire U.S. produces about seven million barrels per day of oil, and Texas pumps almost two million of those. And the room for growth is enormous.
A 2011 Interstate Natural Gas Association of America study said the U.S. would need to invest $130 billion in pipeline infrastructure alone to handle the production demands our country will face in the future. Today, oil and gas pipelines already carry 60-70 percent of the country’s energy product. And some 300,000 miles of those pipelines are owned and operated by MLPs.
As policy makers in Washington, D.C., and throughout the country look for ways to inspire job creation and economic growth (especially in the context of tax reform), they should first consider the positive impact the energy industry and infrastructure projects have had thus far, and what they will continue to do long into the future.
Let’s hope they allow the energy industry to continue doing what it does best: provide jobs, hope and reliable energy to millions of Americans each and every day.
– Mary Lyman is executive director of the National Association of Publicly Traded Partnerships (NAPTP). NAPTP is a trade association representing master limited partnerships , businesses that raise private sector capital to finance energy pipeline infrastructure.