The Most Oil-Rich States

As gas prices reach record highs across many parts of the country, Americans have been blaming oil companies. But as much as they are disliked, the oil and gas industry is also an indispensable part of many states and an asset to their local economies. 24/7 Wall St. has identified the 10 states with the most oil reserves, or the estimated amount of oil in the state, and examined the effects that the industry has on their economies.

Read: The Ten Most Oil-Rich States

In the states with the greatest amounts of oil reserves, those effects can be tremendous. The oil and natural gas industry supports nearly 25% of the economies of Texas and Wyoming, much more than the 6.8% it supports on a national scale. Every state on this list exceeds the national number by a significant amount.

The oil and gas industry also can have an outsized impact on employment in some states. On a national level, only 4.6% of all jobs are attributable to the operations of the oil and gas industry, directly or indirectly. In many states, the industry’s impact on employment is significantly higher. In five states, all of which are included on this list, the industry supports more than 10% of all jobs.

While it is not necessarily the cause, the states with the most oil reserves generally have particularly strong economies. Six of the 10 states with the most reserves have among the lowest unemployment rates in the country; seven had the smallest increases in the unemployment rate from 2004 to 2010; and eight of the states had the largest increases in median household income from 2005 to 2010.

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To identify the states with the most oil reserves, 24/7 Wall St. reviewed data from the U.S. Energy Information Administration. We also examined data from the Census Bureau, the Bureau of Labor Statistics and the American Petroleum Institute.

These are the 10 states swimming in oil.

10. Montana
> Proved reserves of crude oil: 343 million barrels
> Oil refineries: 4 (tied for 10th most)
> Unemployment rate, Jan. 2012: 6.5% (tied for 13th lowest)
> Share of jobs supported by oil and gas: 6.4% (11th highest)

Montana’s huge oil reserves have caused the oil industry to become a major in-state jobs provider. As of 2009, the oil and natural gas industry accounted for 6.4% of total employment, including both direct and indirect employment, in the state. Additionally, the labor income — defined as the wages, salaries and benefits, as well as proprietors’ income — made by those working in the industry accounted for 7.7% of the state’s total labor income. This is the eighth-largest share in the country.

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9. Louisiana
> Proved reserves of crude oil: 370 million barrels
> Oil refineries: 17 (3rd most)
> Unemployment rate, Jan. 2012: 6.9% (16th lowest)
> Share of jobs supported by oil and gas: 15.1% (2nd highest)

The oil and gas industry appears to have a greater effect on Louisiana’s economy than it has in some states with even more crude oil reserves. For instance, the state has 17 oil refineries, the third most in the country, and the oil and natural gas industry accounts for 15.1% of total employment in the state — the second-largest share in the country. The industry also supports just under 23% of the state’s economy — also among the country’s highest rates.

8. Utah
> Proved reserves of crude oil: 398 million barrels
> Oil refineries: 5 (tied for seventh most)
> Unemployment rate, Jan. 2012: 5.7% (ninth lowest)
> Share of jobs supported by oil and gas: 4.9% (15th highest)

In general, Utah has a strong economy. Its unemployment rate is significantly lower than the national average, and from 2005 to 2010, median household income in the state increased by more than 14% — one of the country’s highest rates. The state also sits on top of nearly 400 million barrels of crude oil. The oil and natural gas industry accounts for 7.4% of the state’s economy. While this is only the 14th largest share, it is still quite significant.

7. Wyoming
> Proved reserves of crude oil: 583 million barrels
> Oil refineries: 6 (tied for fourth most)
> Unemployment rate, Jan. 2012: 5.5% (seventh lowest)
> Share of jobs supported by oil and gas: 15.8% (the highest)

Wyoming has the second-lowest population density in the country — and lots of oil. As a result, nearly one in six residents work for the natural gas and oil industry, either directly or indirectly. This is the largest share in the country. Just under 20% of labor income is produced in the industry — also the highest rate. Compared to 2005, residents of Wyoming are now making more money on average. Median household income has increased by 15.8%, the second most in the nation.

6. Oklahoma
> Proved reserves of crude oil: 622 million barrels
> Oil refineries: 6 (tied for fourth most)
> Unemployment rate, Jan. 2012: 6.1% (12th lowest)
> Share of jobs supported by oil and gas: 14.1% (fourth highest)

Oklahoma has six oil refineries — the fourth most among states — to accommodate its vast reserves of crude oil. The state’s oil and natural gas industry supports nearly 300,000 jobs in the state, or 14.1% of total employment. This is the fourth-largest share in the country. The industry also accounts for 19.3% of the state’s total labor income — the largest share among all states.

5. New Mexico
> Proved reserves of crude oil: 700 million barrels
> Oil refineries: 3 (tied for 14th most)
> Unemployment rate, Jan. 2012: 7.0% (tied for 19th lowest)
> Share of jobs supported by oil and gas: 7.5% (seventh highest)

The oil and natural gas industry has a strong presence in New Mexico, which sits atop 700 million barrels of proved reserves of crude oil. The industry accounts for 10.6% of the state’s economy and is responsible for 7.5% of total jobs. From 2004 to 2010, the unemployment rate in the state increased from 5.8% to 7.9%. While this is a significant increase, it is among the lowest increases in the country for this period.

4. North Dakota
> Proved reserves of crude oil: 1,046 million barrels
> Oil refineries: 1 (tied for 24th most)
> Unemployment rate, Jan. 2012: 3.2% (the lowest)
> Share of jobs supported by oil and gas: 7.5% (sixth highest)

North Dakota has one of the strongest economies in the country. The state currently has an unemployment rate of just 3.2% — the lowest among all states, and even lower than its 2004 rate of 3.5%. From 2005 to 2010, median household income in the state increased by 18.6%, the country’s highest rate. The state is currently experiencing an oil boom, with crude production in January jumping by 59% from one year prior. The oil and natural gas industry supports 11.8% of the state’s economy — the sixth-largest share in the country.

3. California
> Proved reserves of crude oil: 2,835 million barrels
> Oil refineries: 19 (second most)
> Unemployment rate, Jan. 2012: 10.9% (tied for second highest)
> Share of jobs supported by oil and gas: 4.6% (16th highest)

California is the third-largest state by size, and sits on top of the third-largest amount of oil. As a result, the state is home to 19 refineries — the second most in the country. This oil contributes a significant amount to the economy, supporting 7% of the state’s total gross domestic product in 2009. The industry also supports more than 900,000 jobs, or 4.6% of total state employment. While the share is rather small, the absolute total number is the second largest in the country.

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2. Alaska
> Proved reserves of crude oil: 3,566 million barrels
> Oil refineries: 6 (tied for fourth most)
> Unemployment rate, Jan. 2012: 7.2% (22nd lowest)
> Share of jobs supported by oil and gas: 10.3% (fifth highest)

Alaska, the nation’s largest state by size, is home to more than three and a half billion barrels of crude oil. The oil and natural gas industry supports 16.9% of the state’s economy. It also accounts for 10.3% of jobs in the state — the fifth-largest share in the country. The industry likely will expand in the near future as more oil is accessed.

1. Texas
> Proved reserves of crude oil: 5,006 million barrels
> Oil refineries: 23 (the most)
> Unemployment rate, Jan. 2012: 7.3% (23rd lowest)
> Share of jobs supported by oil and gas: 14.3% (third highest)

Texas is the nation’s largest center for oil, with more than 5 billion barrels of proven reserves. It is also home to 23 refineries, which add to the size of the sector. The oil and natural gas industry supports 24.3% of the state’s total economy, which ties with Wyoming for the nation’s largest share. The industry also is responsible for 14.3% of total employment in the state, both directly and indirectly, which is the third-highest percentage. In numbers, this represents nearly two million jobs — the highest in the country.

-Charles B. Stockdale