The U.S. economic recovery from the Great Recession is tepid at best. The nation’s economic growth for the first quarter was a paltry 2.2 percent, well below expectations. Foreclosures and the inability to get financing are dampening hopes for new housing starts. Gasoline prices are pinching family budgets. This month’s unemployment figures released yesterday, show virtually no change.
With more than 20 million Americans either seeking work, under-employed, or giving up entirely on finding a job, one would think that aiding the economy and putting workers back on a payroll would be Washington’s primary focus. Although the oil and natural gas industry holds great promise for creating well-paying jobs, the federal government seems intent upon preventing its growth and success.
The United States has huge deposits of oil and natural gas to be developed. A study by the analytical firm Wood MacKenzie calculates that just increasing access to currently underdeveloped regions could result in nearly 700,000 new jobs in the United States by 2030. Moreover, data show that the oil and gas industry provides some of the best-paying jobs in the country.
In his State of the Union speech in January, President Obama spoke of the need to increase domestic energy production, specifically mentioning increasing oil and natural gas production. With a growing population that will need more energy, the oil and gas sector can be an engine of job creation that can help pull the economy out of the doldrums – as the President said.
Consider the scale of the oil and gas industry’s contribution to the national economy. Just in 2010 the industry invested $266 billion in new projects and enhancements to refineries and other facilities. It paid out $176 billion to 2.1 million U.S. employees and oil and gas leaseholders. Another $35 billion was returned as dividends to investors, which include many of the nation’s pension and retirement funds, and $31 billion was paid in government taxes, royalties and fees. In total, that is equal to more than half of the Obama “stimulus” plan spending.
But it appears the Administration’s actions will not match its rhetoric. Despite the President’s call for an “all of the above” energy strategy, ten separate federal departments and agencies are considering regulations on hydraulic fracturing, the technology without which the sharp increases in domestic oil and natural production would not be possible. It is, in truth, more of a “none of the above” strategy.
Although the President recently signed an executive order creating a task force to coordinate these regulatory actions, the drive for more regulations seems unstoppable. The American Petroleum Institute says that “adding potentially redundant federal regulation could stifle the kind of investment that has led to lower energy prices for consumers, more American jobs, and increased energy security.”
In my home state of Colorado, the Bureau of Land Management (BLM) has prompted criticism over its proposal to scale back the amount of acreage available for oil shale and tar sands development. The boards of three counties have passed resolutions against the BLM’s plan, demanding more public input. The Mesa County statement claims BLM has been hijacked “by a host of anti-oil shale pro-wilderness groups steering BLM’s every move.” Sound melodramatic?
Consider that the estimated 1.5 trillion barrels of oil in the Piceance Basin shale formation exceeds all of the known oil reserves of the entire world – yet is still largely off limits under current federal policy.
Even without it, Colorado’s promising Niobrara shale formation and other energy activity is helping to fill America’s energy needs and creating jobs. It’s estimated that the oil and gas industry already employs 50,000 Coloradans directly, and indirectly supports 190,000 more jobs. But the state’s energy potential could be cut short by piling on additional federal regulations, while walling off some of our most energy-rich lands.
If we really want to create jobs, shouldn’t we ramp up domestic energy production, rather than slow it down?