spwm volatileoilCapital investment in the oil and gas industry grew rapidly after 2006, but has shown itself to be more volatile than overall capital investment, creating both a boon and a potential bane for the economy, according to an analysis by the Federal Reserve Bank of Kansas City.

From 2006 to 2014, capex by publicly traded companies was up 41 percent primarily driven by energysector investments, which were up 125 percent, reaching more than $300 billion in 2014.

When oil prices collapsed in 2014, energy capex dropped more than 50 percent by 2016, which was enough to push overall business capex down by 15 percent for the period.

“As energy production increased in the United States, the U.S. economy became increasingly sensitive to fluctuations in energy investment,” the analysis said.

The biggest target for capex in the oil and gas sector was exploration and production. The paper notes that the variability in this area, with drilling starting or stopping quickly, adds to the unevenness.