Oil and Gas Boom that Obama Can't Kill

Bob Beauprez
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Posted: Nov 29, 2011 12:01 AM

Moratoriums, permitting bans, cancelling leases, Wild Land designations, EPA regulations on steroids, and tens of billions in DOE loans and subsidies for the alternative green energy industry…..the Obama Administration has done everything in their considerable power to strangle America’s oil and gas industry to death, but it just refuses to die.  In fact, it seems to be stronger than ever. 

With 26 million people unemployed, under-employed, or having completely given up even trying to find a job, the oil and gas industry is bucking the trend during this prolonged economic recession by adding jobs and producing more badly needed energy right here at home.  A Thanksgiving weekend editorial in the Wall Street Journal reports that business is booming in energy rich America in the shrinking number of places not shut off by an Administration Steve Forbes blasted for “the most anti-oil and gas record in U.S. history.”  Following is a summary of the WSJ editorial:

  • Oil and gas production now employs some 440,000 workers, an 80% increase, or 200,000 more jobs, since 2003. Oil and gas jobs account for more than one in five of all net new private jobs in that period.
  • States that embrace oil and gas production are reaping the rewards. North Dakota has the nation's lowest jobless rate, at 3.5%, and the state now has some 200 rigs pumping 440,000 barrels of oil a day, four times the amount in 2006. The state reports more than 16,000 current job openings, and places like Williston have become meccas for workers seeking jobs that often pay more than $100,000 a year.
  • Production in Pennsylvania's Marcellus shale formation created 18,000 new jobs in the first half of 2011. Some 214,000 jobs are now tied to a natural gas industry that barely existed in the Keystone State a decade ago.
  • Energy firms are also rushing to develop the Utica shale in eastern Ohio, and they are expanding operations in Texas, Louisiana and Oklahoma, among other places.
  • Oil and Gas could do even more for our struggling economy if the Obama Administration would just stop waging war against it.  The Wood Mackenzie consulting firm estimated that better federal energy policy would create an additional 1.4 million jobs by 2030.

For all the blather about saving-and-creating jobs, you might think the Administration would embrace what’s going on in oil and gas and try to glom on to the good news in one of the few industries doing well right now.  But, no; in fact the war on oil and gas goes on. 

In the new five-year plan recently released by Ken Salazar at the Interior Department, most of the Outer Continental Shelf remains off limits.  The President has delayed even a decision on the Keystone XL pipeline for at least another year; a project that would create 20,000 direct jobs and deliver 900,000 bpd of Canadian tar sands oil to the gulf coast refineries. 

The energy goal of the Obama Administration to “boost the price of gasoline to the levels in Europe” is well on the way with gas at the pump currently 80 percent more costly than when Obama took office.  And, while we pay more at the pump, federal revenue from offshore bonus bids – a front end payment from lease sales – has plummeted to just $36 million from the $9.5 billion in FY 2008 according to the WSJ.

So, while the Administration’s policy is costing consumer’s more for energy and they have squandered billions on questionable, even scandalous, green energy loans like Solyndra, billions in revenue is also lost due to an unwillingness to even make leases available at auction. 

As the WSJ editors explain, “The ironies here are richer than the shale deposits in North Dakota's Bakken formation. While Washington has tried to force-feed renewable energy with tens of billions in special subsidies, oil and gas production has boomed thanks to private investment. And while renewable technology breakthroughs never seem to arrive, horizontal drilling and hydraulic fracturing have revolutionized oil and gas extraction—with no Energy Department loan guarantees needed.”

Healthy, growing economies require adequate supplies of affordable energy and for the foreseeable future about 85 percent of America’s needs are going to come from fossil fuel sources.   The oil and gas industry played a vital role in the growth of the great American economy during the last century, and it can lead the way for our economic recovery and a strong future again if only our government would give it a fight chance.