How can America create more jobs? It’s a question a lot of people are asking on the heels of another highly disappointing jobs report from the Labor Department – and in advance of the president’s jobs-focused speech this evening.
No matter how many differences of opinion there are in Washington on a wide range of issues, I think everyone agrees that what our nation needs is solid growth in sustainable, long-term employment.
Two compelling proposals released in the past few days tell us just how to do that.
Yesterday, the American Petroleum Institute released a study by Wood Mackenzie that found that with the right development policies, the U.S. oil and natural gas industry could create 1 million new jobs over the next seven years – and 1.4 million jobs by 2030. Such policies could also generate more than $800 billion in new government revenue by 2030.
This study comes a day after the U.S. Chamber of Commerce released its six-point plan for capitalizing on the private sector’s power in job creation and growth – not surprisingly, “producing more American energy” was one of the six points.
Both organizations stressed that policy decisions that promote sound regulation and access to energy supplies are critical to unleashing potential job growth in the energy industry. Here are Wood Mackenzie’s criteria for greater job growth:
- Opening of U.S. regions that are currently closed to leasing, drilling and development – including the Eastern Gulf of Mexico, the Atlantic and Pacific coasts, and multiple areas of Alaska and the Rocky Mountains.
- Lifting of the drilling moratorium in New York state.
- Increased rate of permitting in the offshore Gulf of Mexico.
- Approval of the Keystone XL and other future Canada-to-U.S. oil pipelines.
- Regulation of shale resources remains predominately at the state level.
Unfortunately, it is frustrating to observe that several of these commonsense, job-creating policy choices have been strongly opposed by some environmental activist organizations. Recent protests against the Keystone XL pipeline in front of the White House, for example, do nothing other than slow down our nation’s prospects for new employment.
Don’t get me wrong: Robust dialogue about policy choices is a critical component of our democracy. Everyone has a right to their opinion. But I can’t help concluding that some environmental activist groups – which often pay little or no taxes and employ relatively few people – seem more interested in political agendas without much thought about their impact on the economy and efforts to put people back to work.
And from a pro-jobs perspective, history shows that more resource access means more employment. Data from the Labor Department show that U.S. jobs directly involved with finding, developing and producing oil and gas rose by more than 50 percent in the last decade as deepwater and shale gas development expanded.
This growth is happening in places like Pennsylvania, where Marcellus shale gas development has contributed to a 130 percent rise in jobs in the state’s “core” oil and gas industries over the last 10 years. It’s also happening in places like North Dakota, where greater development of the Bakken shale led to the petroleum industry supporting more than 65,000 jobs in 2009 – up from 25,700 in 2005.
Compare data like this to the disappointing results of recent “green jobs” initiatives that have been made clear by several studies and news stories in just the past few months alone.
Just this week, New York Times columnist David Brooks critiqued the promise of green jobs as a fix for the U.S. economy. In “Where the Jobs Aren’t,” he cites data, economists and real-life examples showing that the green economy has not lived up to its expectations.
Another recent New York Times article found that government records show that “Federal and state efforts to stimulate creation of green jobs have largely failed …” The reporter cited an example from the Economic Development Department in California, which “reports that $59 million in state, federal and private money dedicated to green jobs training and apprenticeship has led to only 719 job placements — the equivalent of an $82,000 subsidy for each one.”
Let me be clear: New energy technologies that are economically viable and capable of sustaining employment should be welcomed. But it is somewhat ironic that many of those who support green jobs do so by calling for green industries to receive financial support funded by increasing taxes on the oil and natural gas industry. These tax increases are marketed as the removal of oil industry “subsidies.” Yet even the U.S. Energy Information Administration points out that what the administration regularly calls “big oil subsidies” are actually tax provisions that benefit other industries, which exist to support U.S. economic competitiveness – including Section 199 of the American Jobs Creation Act of 2004 and the “dual capacity taxpayer” credit.
To boost employment and revive our economy, Americans – and their elected representatives – should support industries that create real, long-term, sustainable jobs. For one leading example of where this occurs, look no further than the U.S. oil and gas industry.
“Drill baby Drill” will provide a short term boost a decade or two, and benefit Exxon shareholders, but just delays the time when the US has to address its addiction to petroleum. The current American way of life is sustainable when oil is $20 a barrell but not when it nears $100.
Just to add to your comment…..Our way of life was based on “Getting the job done quickly” even if it meant inefficient use of resources at hand. For years our free market got the job done faster than other countries. It made us who we are today. Now that commodity prices have increased focus needs to be shifted towards finding ways to get the same job done more efficiently. Americans have done a fantastic job at finding ingenious ways to overcome many hurtles. This hurtle is no exception. The people at the bottom in companies, governments, and especially households know literally millions of little ways to increase efficiency. Everyone just needs to understand how the system really works. Through that understanding, people are empowered. An easy to use framework to channel these ideas from bottom to top, top to bottom and sideways is required to implement these ideas. As an example, if every American could save 10% per year on there household bills it could be used to spend. Individuals and companies benefit through this spending. Through taxes governments benefit with less of a need to increase… read more »
…taxes. It’s a win-win situation. If the framework is there and just half of Americans participate we could all live better.
John, we have more oil in the U.S., Mexico and Canada to last us a century or two, not just a decade or two. If you examine all the options of extracting oil, we are better off than Saudi Arabia.
America needs to get rid of its self-destructive behavior and stop committing slow suicide by enriching our enemies. The all-or-none mentality is life-threatening. Find a happy medium. This starts with a reasonable environmental policy that allows jobs to be created under safe conditions, an overhaul of our tax code, tort reform, and an energy policy that rewards innovation.
How many thousands of ExxonMobil’s jobs in the United States have been lost because of offshoring to countries such as Brazil, Thailand, and Hungary? When is ExxonMobil going to realize that outsourcing doesn’t work in the long term when the remaining USA employees have to cover for those offshored employees when they are out on their numerous holidays and/or when they just don’t understand how to to do the jobs anyway!
Exxon is in the business of exploring and drilling for energy… That is what they do, that is how they employ thousands of people, and create a livelyhood for their families. Exxon and the other oil companies are not criminals, the billions of dollars in investments and taxes that are paid by energy exploration companies literally makes the American economy excel against all others in the world. They invest in alternative energy sources when they are viable, they are NOT good investments yet. Solar and wind require storage, there are no batteries capable of storing these energies when the sun is not shining or the wind is not blowing. These sources have not attracted investment capital, the only source of operating capital is coming from the American taxpayer, and directed through know nothing government agencies who are doling out vast sums of tax money to friendly political supporters.
When the free markets identify investment opportunities, there will be no need for government employees to give away our tax dollars, but they will anyway. The sources of energy that propels our country now did not originate through the government, they stood on thier… read more »
…own and represented a legitimate investment opportunity and small operators took risks, most failed, the winners succeeded, but all could percieve some gain at the end of the day. That is the American way. As you stand and watch these harebrained ideas one by one go down the drain and take a big chunk of our GDP with them, try and understand that all our oil and energy operators want from the government is a frigging permit!
If our government would turn ExxonMobil et. al loose to exploit our resources here at home, you would see more activity here and less overseas. Free market forces dictate where we do business and the more we impose costly restrictions on the industry here at home, the more incentive there is to go overseas.
One of the best quality of life indicators would be energy usage per capita.
Whether it’s light bulbs to read by, a larger video display, or a heated hot tub, the process of using energy is called ….”living”. Newly found huge deposits of US shale oil indicate well over 100 more year of energy supply. The technology needed to access it is here. The opportunity for jokes regarding the term “fracking” are almost as limitless [ smile ]. An additional benefit of creating millions of jobs in the energy sector would be the availibility of abundant cheaper energy. This make life better for people in an overall, individual freedom enhancing way. It will not happen until the false demonization of energy use is gone, most probably once its political leaders are gone. I would like to see a public awareness ad program aimed at restoring the true idea that energy usage per capita is good, growth producing, and the essence of life. Like the anti-smoking idea, once the public gets it, real change can hppen fast.
Am a retired employee (1982) and former GM of the PT. Arun LNG plant
in North Sumatra, so am aware of the problems of medium and long term
problems; however, it is important that we think ahead and a little out of the box to continue to grow. The natural gas boom is wonderful and am happy we are in the middle of it, but we must plan to be in the lead with collection and storage of natural gas and LNG if we are realize the tremendous potential for us to become energy exporters in the next few
years. For instance, forward planning with salt producers to prepare salt
domes for gas storage, right of ways to major pipelines and LNG plants, and possible coordination with power plants for supply and power shaving facilities could result in some very profitable and job creating activities in areas that can be developed inexpensively.