The oil and gas boom is producing millions of jobs, and not just where you might expect. Employment is up 40% in the oil and gas fields since the recession began in late 2007. But in every one of the 10 states where hydrocarbon production is on the rise, overall employment growth has outperformed the nation.Incentives are only part of the story. Most of the new energy drilling is on state rather than federal lands. If the congress forced the president to open up more federal land to drilling (including fracking) the jobs boom and related stimulus to the economy will skyrocket.
These jobs, moreover, are "sticky" — anchored in the local economy and ranging from information services to training, health care, housing, education and related manufacturing.
The gains have emerged from a profound change in the energy landscape. Since the recession officially ended in mid-2009, U.S. oil production has risen 60%, bringing about a 50% collapse in oil imports.
Besides reducing the GDP-robbing trade deficit, this has had the immediate impact of creating hundreds of billions of dollars in new economic value.
The boom has also attracted a similar scale of new foreign direct investment. Because of low-cost energy abundance, 100 factories are set to come on line by 2017. When all are up and running, another $300 billion will be pumped into GDP and 1 million more jobs created.
This is proof that economic stimulus — of the right kind — works. Unlike the stimulus undertaken by the Obama administration, this one is coming at no cost to taxpayers, has been fueled by private-sector investment, and has taken place entirely on state and private lands.
From fuels and chemicals to fertilizer and energy-centric products of all kinds, the hydrocarbon stimulus is creating middle-class jobs and generating tax revenues, not burdens.
Why not provide incentives to get even more of this? Some have argued that doing so would benefit only Big Oil. But the facts tell otherwise.
Over 75% of America's oil and gas production comes from some 20,000 companies — the same ones responsible for nearly all the recent growth in output. These small and midsize companies, and thousands more in the supply chain, are deploying the smart-drilling technologies that, along with hydraulic fracturing, have unlocked hydrocarbon-rich shale fields.
Another issue is the states who are impeding development. Take for example the Marcellus Shale formation. It is estimated that Marcellus holds 1,300 trillion cubic feet of natural gas, enough gas to supply the US for 65 years.
One of the states that could most benefit from Marcellus is NY, however the state government keeps on avoiding the issue with new health studies.
Another issue slowing down the development of energy production are the environmentalists. Energy, especially fracking is a double-devil. There are the local environmentalists who ignore the science and claim fracking causes everything from earthquakes to contaminated ground water. Then there are the national environmentalist who fight any carbon-based energy product, ignoring the 1,350+ peer-reviewed studies that refute the global warming theory.
The US has been mired in a weak economy for six years, it's time for the United States federal and state governments to jump with both feet into the energy production pool, it will not only help those in the energy related industries but their jobs and salaries will act as free-market, easy-on-the-federal budget stimulus to the economy.