EnergyFactor By ExxonMobil | Pespectives has a new home

Where the jobs are

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.

  • Worth a deeper look...