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Trump could help these energy-fueled local economies bounce back

Cities and towns that depend on the energy business had a pretty ugly 2016, but their fortunes could be turning under Trump.

New government data shows local economies relying on the energy industry suffered steep declines in output last year, as weakness in the price of oil, natural gas, and coal cut down on drilling and mining activity.

Like Odessa, Texas, for instance. The key city near the heart of the West Texas shale oil fields known as the Permian Basin felt the steepest year-on-year drop in economic growth, with total economic output from the Odessa metro falling 13.3 percent. Caspar, Wyoming, at the epicenter of Wyoming’s important coal, petroleum, and natural gas industries, slid hard as well, seeing its gross domestic product drop 11.6 percent.

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While the energy industry is no stranger to boom and bust cycles, the energy sector in Western states have been key sources of good-paying jobs since the Great Recession, especially for those without college education. Oil and energy construction and extraction workers—who typically only need a high school diploma or equivalent to qualify for a job—earned an average annual wage of $61,630 in 2016. By comparison, the median annual wage for high school graduates without college education in 2016 was less than $35,000.

While smaller oil and energy–based economies suffered some of the biggest percentage declines among American cities last year, larger cities also were touched. The GDP of the Houston area fell by 3 percent (and it’s likely to suffer at least a short-term decline because of Hurricane Harvey). Midland, the super-affluent corporate capital of Texas oil, was down a slight 0.6 percent.

On the other hand, there’s likely to be some significant recovery for these areas this year, as the early months of this 2017 saw a surge of investment in oil and energy extraction, as oil prices have shown signs of stability and the Trump administration moves to significantly cut environmental regulations.