Want More Jobs? The Low-Hanging Fruit Is Energy

Everyone knows that Obama’s jobs program is a joke; but let’s assume that you actually do want to help create a million or more jobs, while simultaneously increasing government revenues by many billions of dollars. How would you do it? It’s actually easy: just stop the irrational antagonism to energy development that is America’s most glaring public policy failure.

The energy consulting firm Wood Mackenzie released a report on Wednesday that attempted to quantify the additional jobs and revenue that would result from a relaxation of the federal government’s current anti-energy policies. You can read the report in its entirety, but here is the bottom line:

Wood Mackenzie’s analysis found that U.S. policies which encourage the development of new and existing resources could, by 2030, increase domestic oil and natural gas production by over 10 million boed, support an additional 1.4 million jobs, and raise over $800 billion of cumulative additional government revenue.

Wood Mackenzie compared a “current path case” against a “development policy case” to derive these figures. This is the current path case; i.e, continuation of the Obama administration’s policies:

• The “Current Path Case” assumes the following policy and regulatory initiatives:

• Continued “slow walk” of Federal permitting for offshore Gulf of Mexico
•The case assumes an increase from current offshore exploration and development activity levels, but not back to pre-Moratorium rates

• Tighter Federal hydraulic fracturing and water disposal regulations which are beyond the current state regulations
• Slow down of onshore drilling due to increased cost of well completions. Results in a negative impact on development economics

• No opening of new areas for exploration and development
• No new exploration and development in frontier areas of Alaska, Eastern Gulf of Mexico, Atlantic and Pacific offshore, and Federal Rockies

• Restrictions on new pipeline development from Canada
• Curtailment of oil sands pipeline infrastructure into the U.S.. No development of the Keystone XL pipeline or other future Canada to U.S. pipelines

If the federal government got serious about job creation, we would have the development policy case:

• The “Development Policy Case” assumes the following policy and regulatory initiatives:

• Opening of Federal areas that are currently “off limits” to exploration and development
• Commencement of leasing, drilling and development activity in currently closed regions. Regions to be opened include: Eastern Gulf of Mexico, portions of the Rocky Mountains, Atlantic OCS, Pacific OCS, Alaska National Wildlife Refuge (ANWR) – 1002 Area, National Petroleum Reserve, Alaska (NPRA) and Alaska offshore

• Lifting of drilling moratorium in New York State
• Commencement of drilling and development of Marcellus shale in New York State

• Increased rate of permitting in the offshore Gulf of Mexico
• Allows for a return to pre-Moratorium exploration and development activity

• Approval of the Keystone XL and other future Canada to U.S. oil pipelines
• Facilitates additional Canadian oil sands development, thereby increasing the demand for U.S. supplied equipment and infrastructure

• Regulation of shale resources remains predominately at the State level
• Environmental regulation of shale gas and tight oil plays are not duplicative or unduly burdensome. Permitting levels are at sufficient rates to develop resources in a timely manner

What is remarkable is how quickly jobs would be created, if only the federal government would get out of the way:

I have mixed feelings about increasing government revenues, but, as Marco says, it is better to have new taxpayers than new taxes. The impact of allowing energy development would be considerable:

All of this, of course, is the effect of drastically increased energy production, which will ease the cost of energy:

This is all such a no-brainer that Obama’s failure to reform his administration’s energy policy can only be explained by the fact that he is a slave to ideology, and has no understanding of economics.