The President's Missed Opportunity

Mark Green
Posted September 9, 2011

We'll leave it to others to analyze the details of what was included in the president's jobs speech Thursday night. Here's what was left out: energy - and with it one of the best ways to give the economy that "jolt" the president mentioned as he outlined his plan.

Both parties in Washington may find areas of agreement in the $447 billion plan of government spending and tax cuts - $29 billion less, by the way, than the oil and natural gas industry contributed to the economy in 2010. Yet, the concrete economic benefits of the president's plan are unclear. One early estimate said it might yield just 300,000 jobs, or 1.9 million, or 2.1 million, or maybe 4.3 million. The numbers are all over the place. If only there was an opportunity available in an industry with a proven track record of job creation. Oh wait, there is.

A new study released this week by Wood Mackenzie showed that with pro-energy development policies in place, the oil and natural gas industry could generate an additional 1 million jobs by 2018, growing to 1.4 million by 2030 - all without additional federal spending. To the contrary, those added jobs would bring with them increased tax revenue, nearly $800 billion in cumulative receipts to government by 2030 - enough to have funded NASA's entire budget the past 50 years. The Foundry's Nicolas Loris writes:

"Increasing access to oil and natural gas reserves in the United States both onshore and offshore, would help offset rising demand, increase jobs and revenue, and provide the real economic boost our country needs rather than more the same tried-and-failed government spending programs."

Indeed, the administration's quest for infrastructure projects to help boost the economy is laudable. Unfortunately, they're taking a pass on energy, missing the tangible benefits of unleashing America's oil and natural gas industry. API President and CEO Jack Gerard:

"The president missed an opportunity to pick the low hanging fruit of job creation. Allowing the responsible development of more of America's vast domestic oil and natural gas resources could generate more than one million new jobs in just seven years, with thousands of shovel-ready jobs that could be created almost immediately."

Shovel-ready? The Keystone XL pipeline, which has been waiting three years for administration approval, would instantly add more than 10,000 U.S. jobs, according to its builder. The Canadian oil sands crude it would deliver to U.S. refiners is part of a pro-development energy strategy that Wood Mackenzie says would increase daily oil and natural gas production by 10.3 million barrels of oil equivalent by 2030. The bonus result: A future in which 100 percent of this country's liquid fuel needs could be met domestically and from Canada.

Meanwhile, the president again mentioned raising taxes on a handful of energy companies as part of his approach - companies that are part of a sector that actually added jobs last month while the rest of the economy stalled. Higher energy taxes will decrease oil and gas production and put jobs at risk. "Raising taxes on an industry that already contributes more than $86 million every day to the federal government takes us in the wrong direction," Gerard said.

The right direction is job creation. It's right in front of us, but unfortunately, the administration can't or won't see it. Writes The Atlantic's Megan McArdle: "Economically, this is mostly treading water while we wait for something to change."

That something? The administration's energy policy.