Time to Get Real About Jobs

Mark Green
Posted September 2, 2011

Heading into the Labor Day weekend, there's this report:

"Job creation came to a halt in August, according to new government data that show an economic recovery that appears to be sputtering out. The Labor Department on Friday reported zero net job creation in August, far worse than the 68,000 net jobs analysts had expected to be added. The unemployment rate was unchanged at 9.1 percent. The July job growth number was revised downward, as well, to only 85,000 jobs added that month--not the 117,000 that was estimated."

Amid the wash of the grim August jobs report, the Wall Street Journal's Stephen Moore has some good news [subscription required]:

I recently traveled to Wheeling, W.V., which is 45 minutes down the road from Pittsburgh along the Ohio River and smack in the heart of the old Rust Belt. Unlike most places you go to these days, the town is booming. Defying the national mood, people are optimistic about the future. Why? It's what residents are calling the "West Virginia gold rush."

Except it's not gold, it's natural gas. Wheeling sits atop the famous Marcellus shale formation--one of the biggest treasure troves of natural gas ever discovered in America. With recent breakthroughs in hydraulic fracturing technology, that gas can be extracted at very affordable prices. A few years ago Wheeling farmers and land owners were getting about $50 to $100 an acre for drilling rights. Now they get up to $3,000, plus monthly royalties. What was once a dying town now has jobs and new funds for schools and roads, while West Virginian farmers and land owners are getting rich. The same story of economic revival can be told about counties in Pennsylvania and Ohio sitting atop the Marcellus bonanza.

... according to data from the Federal Reserve Board's Industrial Production Indexes, the oil and gas industry, which the Obama Energy Department loathes, has had more growth in output than any other manufacturing industry in the U.S. from 2005 through 2011. As a reward, the administration is proposing $35 billion in new taxes on the industry to slow it down. Even if we accept the dubious White House claim that all the oil and gas tax write-offs are unwarranted loopholes, a 2011 Congressional Research Service study finds that per unit of electricity produced, for every two cents of tax subsidy to Big Oil, Big Green (wind and solar) get closer to $1 in handouts.

"The environmentalists are for any energy source unless it actually works," notes Stephen Hayward, an energy expert at the American Enterprise Institute.

Look, August's jobs report reflects an economy that's still deep in the woods. While Washington searches for answers on jobs, the oil and natural gas industry is ready to help - as one of the few industries to actually create jobs last month. "With the right public policies, we can do more to help generate more American jobs and help get our economy back on track," said API President and CEO Jack Gerard.

Oil and natural gas can drive economic growth while providing the majority of the energy we use. Real energy, real jobs. It's time to get real.