08 March 2012

How Shale Revolution Creates Jobs; How Obama Destroys Them

The oil and gas industry could be creating even more jobs if the United States had more of a pro-development policy for traditional energy sources instead of a government-driven, heavily subsidized, green energy approach. For example, energy consulting firm Wood Mackenzie evaluated the impact on production, jobs, and government revenues of implementing regulatory policies that support the development of oil and natural gas resources, including: a) opening federal land that is currently “off limits” to exploration and development; b) lifting the drilling moratorium in New York; c) increasing the rate of permitting in the offshore Gulf of Mexico; d) approving the Keystone XL and other future Canada-to-U.S. oil pipelines; and e) leaving regulation of shale resources predominantly at the state level.

Under a scenario that encourages the development of new and existing domestic energy resources, Wood Mackenzie estimates that by 2015 an additional 1.27 million barrels of oil equivalent (BOE) could be produced, rising to 10.4 million BOE by 2030. That would be a 47 percent increase over the estimated 2030 production levels under a current development path case.

Furthermore, under the new development path, there would be a potential increase of 1 million new oil and natural gas jobs by 2018, and 1.4 million new jobs by 2030, while adding cumulative potential government revenue of $36 billion by 2015, and nearly $803 billion by 2030. _American
A Remarkable Lack of Concern for America's Energy Future

A new report from the World Economic Forum (PDF) reveals that about 9% of new US jobs in 2011 were created by the shale energy revolution.
The report said the oil and gas industry contributed 37,000 direct jobs in 2011, which led to the creation of an additional 111,000 indirect jobs during the same period. It said the multiplier effect for solar and wind energy were lower during operation, but higher at up to 3.3 times during construction.

“We always suspected that energy had a vital role to play in the economic recovery but we were still surprised when the data uncovered the magnitude of the sector’s multiplier effects,” Roberto Bocca, head of energy Iidustries at the World Economic Forum, said in a release.

The domestic U.S. oil and gas industry is in the midst of the its biggest boom in a generation, with hydraulic fracturing and horizontal drilling technology unlocking billions of barrels of oil and decades’ worth of natural gas from previously untappable tight coal seam fissures. _Reuters via GWPF
The Obama administration has, of course, been trying to find a way to shut down as many forms of energy production as possible -- and to hell with jobs.
The oil and natural gas industry, one of the strongest job-creating sectors of the U.S. economy, has been unfavorably targeted by President Obama’s proposed 2013 fiscal year (FY) federal budget. To start with, Obama is proposing, for the fourth consecutive year, to repeal Section 199 of the “American Jobs Creation Act.” If enacted, this selectively punitive treatment would increase taxes on oil and natural gas companies by almost $12 billion over the next decade. It could possibly jeopardize some of the millions of American jobs supported by oil and natural gas producers and prolong the sub-par “jobless recovery.”

Overall employment in the U.S. economy still remains short by almost 5 million jobs, and more than 3 percent below the pre-recession employment peak in November 2007. But the oil and natural gas industry has added 34,200 jobs over that period and expanded industry employment by more than 22 percent. Oil and natural gas companies have been on a hiring spree, adding almost 100 new payroll jobs every day for the last year.

In contrast, job creation in green energy projects has so far been very disappointing. According to a recent Wall Street Journal analysis of $4.3 billion in public funding for wind energy under Section 1603 of the American Recovery and Reinvestment Act, there were 36 wind farms that employed 7,200 American workers during the peak of their construction, or an average of 200 workers per project. Today, according to these companies and state and local government economic development officials, those projects employ only about 300 workers, at a cost to taxpayers of more than $14 million per permanent job. _TheAmerican
Obama's antagonism toward reliable sources of energy appears to be based upon at least two foundations: 1. A desire to please big money faux environmentalist supporters, who are pursuing an agenda of carbon hysteria, and 2. A desire to punish and discipline successful private sector enterprises, and to bring them more under the control of a bloated central governmental bureaucracy.

Anyone who has read Mr. Obama's first two autobiographies and observed his early career in community organising and political activism, will understand the man's antagonism toward capitalism, free markets, and any source of wealth and power creation which competes with a central, redistributive government.

The people of the US, in the meantime, must find ways of surviving despite their president's internal whims and caprices.

Good luck with that.

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