Fracking fuels the post-Recession economy and growth
Oh how a housing bust, a nasty economic downturn and a shale oil and gas boom can change things.
Seven years ago this spring, the Census Bureau released a flurry of numbers about the economy and growth, which then spawned a bunch of articles about which parts of the country were growing fastest and why. Topping the list were mostly suburban, sun-belt counties with subprime mortgage-related housing booms. Palm Coast, Fla., gained the highest percentage of population between 2000 and 2006. Western counties near the top included Douglas in Colorado, Teton in Idaho, Lyon in Nevada, Washington in Utah and Pinal in Arizona. Forbes summed up the driving forces of the growth boom:
The high cost of urban living, cheaper land in the suburbs and new business opportunities in periphery communities are contributing to this boom. Not surprisingly, many of the most popular counties are in the South and Southwest–warm, business friendly, inexpensive and less populated than the Northeast.
Last week, the newest Census numbers were released, documenting the fastest growing metro areas in the U.S. between 2012 and 2013. The results look a bit different than they did back before the boom. The top five fastest growing counties now are:
1. Williams, N.D. (Unemployment rate: 1 percent)
2. Duchesne, Utah (Unemployment rate: 3.5 percent)
3. Sumter, Fla. (Unemployment rate: 5.4 percent)
4. Stark, N.D. (Unemployment rate: 1.7 percent)
5. Kendall, Tex. (Unemployment rate: 4.7 percent)
The fastest growing metro areas are:
1. The Villages, Fla.
2. Odessa, Tex.
3. Midland, Tex.
4. Fargo, N.D.
5. Bismarck, N.D.
6. Casper, Wyo.
And, finally, the fastest growing micropolitan areas:
1. Williston, N.D.
2. Dickinson, N.D.
3. Heber, Utah
4. Andrews, Tex.
5. Minot, N.D.
6. Vernal, Utah
Now, I don't know what's going on in The Villages in Florida, but I do know that nearly all of the other places listed above are in or near the oil and gas patch. Gone, apparently, are the days when amenity migrants and equity refugees flock to warm climates where houses are sprouting like weeds in the desert. Now people just want jobs. And these days the jobs, like it or not, are in the oil and gas industry.
That was confirmed last week, when the Census Bureau released its 2012 Economic Census Advance Report. According to the report, the mining, quarrying, and oil and gas extraction industry grew more between 2007 and 2012 than any other in the nation. The oil and gas sector, alone, increased revenues by nearly $80 billion during that time, upped its payroll by $6 billion (note the vast gap between the two, an indicator that profits jumped handsomely), and the number of employees by 41,000. Manufacturing saw a significant drop in revenues and employees during that same period. The print publishing industry, for those who care, shed 228,000 employees during that time, and saw revenues plummet more than $22 billion.
Before getting too fired up about both the economic and population growth rankings, consider the caveats. Despite all the growth, the oil and gas industry remains a fairly small part of the overall economy, dwarfed by the revenues from and employees in retail and wholesale trade, health care, professional services and, of course, manufacturing. Similarly, North Dakota's Williams County, despite the fast rate of growth, isn't exactly brimming over with people: Its population has increased by a mere 7,000 since 2010 for a grand total of just 29,959 residents. It's hardly Tokyo. Or, for that matter, the Phoenix metro area, which gained more than 70,000 people over just one year. Nevertheless, Williams County's growth is remarkable considering the fact that between 1982 and 2005 its population was steadily shrinking.
And what of the fastest growers of the early Aughts? For the most part, they've stagnated. Teton County in Idaho has gained virtually no population since 2010. Utah's Washington County continues to grow relatively rapidly -- by more than 7 percent since 2010 -- but that's nothing compared to the in-migration population explosion of a decade ago. And Pinal County, a once-booming exurban Phoenix area, has grown just 3.6 percent since 2010.
Clearly, the housing bust and subsequent economic collapse changed our migration patterns significantly. Throw in the oil and gas boom, driven by high oil prices and by advances in hydraulic fracturing and horizontal drilling technology, and you've got a major reshuffling of the West's demographic landscape. With all the negatives the boom brings -- high crime rates, pollution, skyrocketing housing costs -- it also has something going for it: jobs. Williams County's unemployment rate is just 1 percent. No wonder everyone is moving there.
Jonathan Thompson is a senior editor at High Country News. He tweets @jonnypeace.