Right on the heels of recent misplaced criticism about how the oil and natural gas industry counts the jobs it helps support comes a report from NPR detailing the multiplier effect of the shale gas industry in Ohio and Pennsylvania.
The story highlights the resurgence of the steel industry due to rising shale gas production – an example I mentioned in my blog post earlier this week. But it also delves into the jobs created because of greater investment in steel production.
A new sandwich shop, filled hotels and increased contractor activity are just a few examples of the multiplier effect of greater shale gas production.
Consider what’s happening at Chapman Corp., a contractor for U.S. Steel: “The $6 million investment that we’re putting into our new fabrication facility shows our confidence that the Marcellus Shale play is here to stay,” Chapman’s vice president for sales and marketing told NPR.
To me, this illustrates one of the most fundamental – and often overlooked – aspects of the entire jobs debate: Larger corporations and industries often help create the demand that enables smaller businesses to get off the ground, expand and eventually hire more employees.
A reporter with Slate recently talked about demand as a determining factor in small business growth in a recent article analyzing the Administration’s small-business loan program: “But if small businesses don’t really believe that those customers are going to come in, well, they tend not to want to take on any debt. At some point, the problem isn’t a lack of credit. It’s an economy-wide lack of demand.”
Another recent report from NPR quoted a CEO who came to a similar conclusion: “Just going out and creating jobs, you can’t do it without demand,” the executive told NPR. “Demand drives the job market.”
When we’re allowed to operate, the oil and natural gas industry creates enormous demand for raw materials, supplies, contract work and countless other services that are a mainstay for other businesses and industries around the country.
But as our chairman and CEO, Rex Tillerson, said at last week’s Washington Ideas Forum, this ripple effect doesn’t happen automatically; it happens “by allowing our industry to do the things we’ve done for decades in this country – and that means we have to go out and have access to acreage to drill wells, develop the capacity, put in facilities, and build the infrastructure so energy is available to the economy.”
It’s true the oil/gas industry creates many jobs. However, it’s also true that without creating those jobs the oil/gas industry would not be able to move product to the customer.
You hire and compensate your employees to extract money from all of us, and you get plenty in exchange for what you provide.
It is my opinion that you do not create jobs just to be a good citizen; to the contrary, you provide jobs because they are necessary for your ability to profit.
Phillip, would you start a corner sandwich store or grocery store and hire people to run them if you did not make enough money to pay them and have some money left over to pay your taxes and give you just a little profit? Even Gates, Jobs, Buffet, etc. require their businesses to make a profit. Actually, they are required to because they have a fiscal responsibility to do so. If they don’t they will be in court faster than you can shake a stick. Also, If they don’t, all the employees that work for them would lose their jobs with the “multiplier” effect of that.
ExxonMobile is run by employees who have the same responsibility (yes, even Rex is an employee). I think it is run very well by some very smart, mostly compasionate people. I don’t always agree with their decisions, but overall I think the organization top to bottom is one of the gold standards of world wide industry.
Just my opinion.
Well guess what; any company that does not make a profit is not going to be in business very long and then what happens to all the people the company employs and the the ones that support the business. Very few companys are there for purely humanitarian reasons. That is not the way the world works.
I don’t think anybody is making a claim that businesses create jobs to be good citizens. Obviously, a primary goal of a business is to generate a profit. However, that said, I think many companies do try to be good corporate citizens because it is the right thing to do and does benefit them in the long run.
My questions to you are:
1) what’s wrong with generating a profit?
2) Don’t you work so you can make money to provide for yourself and your family?
3) if you started a small business, don’t you want to generate a profit so your business can grow and you can become more successful?
I suppose if there really is a multiplier effect for hydrofracking, then their probably is an equal divisor effect due to all the pollution.