A barrel of oil is selling for almost $40 in the U.S. today. The U.S. economy has become less reliant on oil and gas production over the past 30 years. In 1981 oil production accounted for 4.3% of U.S. GDP while in 2011 only accounted for 1.6%. Today we have a more diversified economy in the U.S. and the individual states. A majority of the country’s oil and gas production occurs in Texas, North Dakota, Montana, Alaska, Colorado and California. Some of these states have become less reliant on oil production after past decreases in price per barrel drastically affected their economies.
Texas And Louisiana
Texas and Louisiana have one of the largest oil and gas production sectors in the U.S. accounting for 22 % of all U.S. crude oil produced each year. Texas’s economy has become less dependent on the oil industry by decreasing the expected revenues to 5% of the state’s budget. Louisiana has felt a bigger impact from the price of oil falling because its general fund revenue represents 8%. This past year Louisiana saw a loss of $2 billion from its budget.
Alaska has one of the most dependent operating budgets with over 80% of their budget coming from oil and gas related revenues. State representatives and Governor Walker have attempted to implement new taxes on alcohol and other activities to offset the high dependence on oil.
Hundreds of thousands of jobs have been eliminated since the price of oil continued to plummet last year. However by looking at the past reliance on the oil industry, it is clear that things could have been much worse if most of the main oil producing states didn’t diversify their economies.