Producing jobs and economic growth by producing more oil and gas

Energy historian Daniel Yergin has a must-read piece in The Wall Street Journal that gives a big-picture view of the unconventional oil and gas revolution transforming the American economy.

The Journal piece accompanies the recent publication of a report prepared by Yergin’s IHS consulting group. “America’s New Energy Future“ highlights the economic contribution of dramatically increased oil and gas production from unconventional sources like shale and tight rock.

The numbers reported by Yergin and IHS are extraordinary:

    • More than 1.7 million new American jobs created so far, a number that could rise to as much as 3 million by 2020. The majority of those jobs arise in a wide range of manufacturing and other sectors that support oil and gas drilling.
    • A 25 percent increase in domestic oil production since 2008, which Yergin notes is “the highest growth in oil output of any country in the world over that time period.”
    • Nearly $62 billion in additional federal, state and local tax receipts in 2012, and more than $2.5 trillion in cumulative added tax revenues between 2012 and 2035.

Yergin notes that the enormous increase in domestic natural gas production could well spur a continued manufacturing renaissance in the United States, particularly for energy-intensive industries or those – like the chemical business – that rely on natural gas as a feedstock.

To give an example of what that could mean, consider ExxonMobil Chemical Company’s recent permit application to expand production along the Gulf Coast. Plans for the multi-billion dollar project include constructing a new ethane cracker – a project explicitly designed to capitalize on abundant supplies of domestic natural gas.

Pending regulatory approval and a positive investment decision, the project has the potential to create 10,000 construction jobs. Once completed, it will add 350 permanent positions to the company’s workforce in Baytown, TX. It hardly stops there. If this project proceeds, the effects will ripple through the community, supporting more than 4,000 jobs in the greater Baytown area, increasing regional economic activity by $870 million annually, and generating more than $90 million per year of additional local tax revenue.

There’s been a lot of bad news on the employment front over the past several years. It’s great to see this kind of recognition of the oil and gas industry’s positive contribution to the U.S. jobs picture.


5 Comments

Already have a username? Log in to comment. First-time commenting? Sign up to create your username. It's easy, and we won't share your information.

  1. Richard Baty says:

    I hope you guys are spending a lot of $ to get rid of the OBSTRUCTIONIST STUMBLE BUM now occuping the White House!

    • Linda Brown says:

      Totally agree.
      Got to vote Romney. That’s all we can do.
      Also hope the API will step up their lobbying for the oil and gas industry.
      The “green agenda” is not working.
      Join Energy Nation. Send dollars and emails. Also Americans for Prosperity is good. We need to do something.

  2. mike dar says:

    Actually, pricing will only go up as any consortium will protect it’s margins by supply throttling. But the issue of more jobs is important…right now. Speaking of which, we need more attention(jobs) in study and developing better fracing and drilling methods, especially on the issue of fracing fluids. Also the some 600,000+ wells in the U.S. for NG that offgas enough to negate the positives for NG over oil. That certainly would help ‘Jobs’, having to expand surrounds on initial tanks, creating a system to capture the off gassing or enabling ‘flareoff’ at each site.
    While the cost would go up, maybe then also would NG 1000 Cube prices also. Can’t have both sides, no Clean Air-Clean Water avoidance AND higher pricing.
    Also, IMO, the Natural Energy deposits should be thought of as National Treasures. And certainly part of a National Energy Policy. Now they are just National Assets and treated as such, sold or bartered without a consistant plan for the future, other than primary dealers to the Federal Reserve in making futures dirivitives, therefore Banks, greatly by way of OTC dirivitives, much in non transparent offshore accounts.

  3. Aaron Peterson says:

    Fuel provides is with an excellent quality of life, one where we work less for the great things we have.

    This oil energy reserve is like our savings account. We are withdrawing energy from reserves that the previous generations of life have saved for us.

    Machinery takes fuel to operate. Machinery saves on labor costs. The more machines we use, the more cooler stuff we get and also the more time we get or have to play with that stuff.

    If we spend some of that time to make a machine more efficient, or use less stuff, we use less fuel.

    If we trade manual labor time for machine time, we use less fuel.

    If we increase the price of fuel(and other scarce natural resources, say by funding our government by taxing the removal of difficult to replenish natural resources. We will require more manual labor to maintain our quality of life.

    If we want jobs, we need to tax non-sustainable farming, and oil withdrawl to such a level that it becomes economical to choose a sustainable resource to replace it.

     The American lifestyle is overly decadent, and is taking more than we give back. Our future is more important than just feeling good by being pampered into a lazy existence.

    There is great pleasure in labor.
    Use fuel to set quality of life.
    Use our labor to get what we need.

  4. Robert Sherman says:

    If there is no increase in refining capacity, the price will continue go up for gasoline and home heating oil. The other thing needed is a national standard for gasoline in the U.S. The existing regional standards lead to small markets subject to enormous price bottlenecks.

    I would be interested to see a discussion about Exxon Mobil’s efforts in these areas. Clearly changing President’s will help. but if there is no industry led effort for uniform national standards and increases in refining capacity, then prices will continue to increase, particularly in the Northeast where access to natural gas supplies is simply unavailable in much of the region.

  5. Richard Baty says:

    I hope you guys are spending a lot of $ to get rid of the OBSTRUCTIONIST STUMBLE BUM now occuping the White House!

    • Linda Brown says:

      Totally agree.
      Got to vote Romney. That’s all we can do.
      Also hope the API will step up their lobbying for the oil and gas industry.
      The “green agenda” is not working.
      Join Energy Nation. Send dollars and emails. Also Americans for Prosperity is good. We need to do something.

  6. mike dar says:

    Actually, pricing will only go up as any consortium will protect it’s margins by supply throttling. But the issue of more jobs is important…right now. Speaking of which, we need more attention(jobs) in study and developing better fracing and drilling methods, especially on the issue of fracing fluids. Also the some 600,000+ wells in the U.S. for NG that offgas enough to negate the positives for NG over oil. That certainly would help ‘Jobs’, having to expand surrounds on initial tanks, creating a system to capture the off gassing or enabling ‘flareoff’ at each site.
    While the cost would go up, maybe then also would NG 1000 Cube prices also. Can’t have both sides, no Clean Air-Clean Water avoidance AND higher pricing.
    Also, IMO, the Natural Energy deposits should be thought of as National Treasures. And certainly part of a National Energy Policy. Now they are just National Assets and treated as such, sold or bartered without a consistant plan for the future, other than primary dealers to the Federal Reserve in making futures dirivitives, therefore Banks, greatly by way of OTC dirivitives, much in non transparent offshore accounts.

  7. Aaron Peterson says:

    Fuel provides is with an excellent quality of life, one where we work less for the great things we have.

    This oil energy reserve is like our savings account. We are withdrawing energy from reserves that the previous generations of life have saved for us.

    Machinery takes fuel to operate. Machinery saves on labor costs. The more machines we use, the more cooler stuff we get and also the more time we get or have to play with that stuff.

    If we spend some of that time to make a machine more efficient, or use less stuff, we use less fuel.

    If we trade manual labor time for machine time, we use less fuel.

    If we increase the price of fuel(and other scarce natural resources, say by funding our government by taxing the removal of difficult to replenish natural resources. We will require more manual labor to maintain our quality of life.

    If we want jobs, we need to tax non-sustainable farming, and oil withdrawl to such a level that it becomes economical to choose a sustainable resource to replace it.

     The American lifestyle is overly decadent, and is taking more than we give back. Our future is more important than just feeling good by being pampered into a lazy existence.

    There is great pleasure in labor.
    Use fuel to set quality of life.
    Use our labor to get what we need.