The recent uptick in American energy production is one of those economic miracles not thought possible a decade ago. Oil and gas production will reduce United States dependence on imports and we may become an energy exporter, something that will strengthen our international status, which is at a low point under the present Administration. You can make the case that much of our job growth has come from the energy sector and certainly with no help from Obama administration whose policy is to slow the oil/natural gas production onslaught. As Manhattan Institute fellow Mark Mills noted in a recent article, “Growth in natural gas has made America the world’s largest producer and could soon make us a huge exporter. In the past half-dozen years, America’s hydrocarbon juggernaut has boosted our economy by billions of dollars.”
Mills noted there are some myths that need to be dispelled. The first being that big Oil is the biggest benefactor as Mills observed that 75% of our oil and natural gas production comes from 20,000 small and midsize oil and gas firms with an average size of 15 employees.
The oil and the natural gas boom is part of a larger tech boom as it is dependent on what Mills describes as “The emergence of information-centric “smart” drilling, which relies on sensors, computers and control systems that, when combined with steerable horizontal drilling, fracking and a skilled work force, created the boom.”
This boom has spread throughout the country. North Dakota has become a job mecca and Texas job production has been aided by its energy industry. The boom has been active unexpectedly in Pennsylvania, Florida, Illinois, New York and Ohio. California ranks behind Texas in energy production and potential. Many of these states are classified as blue and this energy revolution has the potential to lift these states out of the economic doldrums they are involved in.
For every job created in the field, there are three or four jobs created including information services, blue collar jobs and education based. This has led to foreign firms investing 166 billion dollars and more importantly, these are jobs that can’t be exported overseas! What happens in the field has impact beyond imagination. Hydrocarbon manufacturing including petroleum refining and extraction has grown 40% over the past six years and these plants have generated 600,000 jobs.
The key obstacle to this boom is Federal government policy. Antiquated laws that restrict natural gas exports no longer make sense, in particular in light of the recent Russian moves in Central Europe. These exports mean more jobs and more investment. The final obstacle will be the temptation of this Administration to add job-killing regulations and some states will add their own in responses due to pressure by environmental extremists.
This energy boom is a game changer but it runs opposite of what this Administration wants to happen as the left in this country want to move away from hydrocarbon energy and into so-call alternative energy.