Energy and Real Job Creation

Mark Green
Posted September 7, 2012

Listening to President Obama’s convention speech, it’s hard to avoid the thought that if his administration had adopted pro-development energy policies a few years ago – clearing the way for America’s oil and natural gas industry to find new resources, create 1 million new jobs by 2020 and stimulate the larger economy – he wouldn’t be left talking about solid job growth as a still-distant goal.

With the U.S. energy sector leading the way, building on the strength it maintained during the economic downturn, we’d be seeing it. The kind of energy-related job creation and growth that’s occurring in states like North Dakota, Pennsylvania, Texas and Ohio would be spreading to other parts of the country.

Instead, Americans are asked to keep waiting for robust job creation and economic recovery, underscored by an August jobs report that showed a middling 96,000 new jobs were created last month. Unemployment fell to 8.1 percent, but experts said that was because more than 360,000 people left the workforce. Indeed, if the workforce was as large now as it was in January 2009 (see The Washington Post’s chart below), unemployment today would be 11.2 percent.

The president sounded familiar energy themes in  Charlotte. He said his administration has opened millions of acres for oil and gas development and took credit for reduced oil imports. Yet, reduced demand for crude oil, stemming from the struggling economy, surely played the key role there, and gains in domestic production have come largely on state and private lands. Because of administration policies production in the Gulf of Mexico is just now returning to 2010 levels. Leasing and permitting on western federal lands are down, and the administration’s offshore leasing plan leaves 87 percent of outer continental shelf acreage on the shelf, closed to development. And the Keystone XL pipeline, which would bring crude oil from Canada while playing a key role in the creation of hundreds of thousands of U.S. jobs, remains blocked by the president’s political calculations.

All highlight the point that the administration’s actions on oil and natural gas development collide with energy reality: Oil and gas power our economy now, supplying 62 percent of our energy, and will continue to power it in the future, according to the Energy Information Administration. In Charlotte the president sketched an energy path that seems unaware of that reality:

“You can choose the path where we control more of our own energy. … We’re offering a better path, a future where we keep investing in wind and solar and clean coal; where farmers and scientists harness new biofuels to power our cars and trucks; where construction workers build homes and factories that waste less energy, where we develop a hundred year supply of natural gas that’s right beneath our feet. If you choose this path, we can cut our oil imports in half by 2020 and support more than 600,000 new jobs in natural gas alone.”

We’ve talked about renewables, solar and wind, before. They’re an essential part of America’s energy mix, but not yet a large part – only about 1.4 percent of our country’s total energy. Growing renewables’ contribution is important, but reality requires substantive policies and actions to secure and increase our oil and natural gas supply.

With the right policies we can secure our energy future, increase revenues to government and create hundreds of thousands of new jobs. Then everyone could cease sweating out the monthly jobs report.