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Page added on June 18, 2013
The American Oil & Gas Industry Is Rescuing The Obama Economy
In Comeback: America’s New Economic Boom, author Charles Morris refers to “the new X-factor, the American energy advantage.” The “game changer”—shale oil and gas technology and production—has put the United States and Canada in the world’s leading economic saddle.
An Oil Pump in western North Dakota (Photo credit: Wikipedia)
Noted expert Daniel Yergin concurs. “Abundant low-cost energy is stimulating a revival of manufacturing in the U.S. as well as well as increased American economic competitiveness,” he states, countering what otherwise is “a time of stubbornly high unemployment.”
Yes, technologically unlocked oil and gas has created an energy revolution and industrial bright spot in the otherwise dim Obama era. By 2020, according to Yergin, shale gas alone is expected to support 4 million jobs (versus 1.7 million today). And the United States is expected to surpass Saudi Arabia as the world’s leading oil exporter, according to the International Energy Agency. Natural gas, meanwhile, is on course to overtake coal as the second largest source of energy worldwide by 2025.
Renewables like wind, solar, and ethanol are no substitute for the above boom of carbon-based energy. In 2011, renewable energy accounted for less than 10 percent of total U.S. consumption—about the same as sixty years ago. And should all-out government subsidies and mandates recede or end, all renewables except for hydropower will shrink precipitously.
That’s why the surging supply of natural gas, the least carbon-intensive of traditional energy sources, is welcomed by all except a deep-ecology fringe. Natural gas produces half as much carbon as coal and a third the quantity of nitrogen oxides. The more prevalent the use of natural gas, the cleaner the air across America.
Expanded oil and gas production benefits state and local government as well. North Dakota, which welcomed the industry’s new technologies, saw its taxable sales and purchases jump nearly one-third in 2012 compared to the year before. Oil and gas tax receipts for the current biennium came in at $3.8 billion, leaving the Roughrider State with a budget surplus of $1.6 billion.
The energy boom is also putting money in the pockets of North Dakota residents. On average, weekly wages have increased 40 percent since 2009. With a 3.3 percent unemployment rate statewide, North Dakota is attracting new residents in droves, and the state’s construction, financial, insurance and real estate sectors all grew significantly in the last year.
Pennsylvania, too, has looked to energy as a new source of vitality. In the teeth of the Great Recession, the state saw thousands of new wells drilled. In 2010 alone, natural gas development in Pennsylvania supported almost 140,000 jobs.
Pennsylvania residents who lost their jobs when sawmills, quarries and manufacturing shops closed for good are finding work in industries related to oil and natural gas extraction. These new energy jobs are good ones, too; a Penn State study found that fracking-related jobs in Pennsylvania paid $62,000 on average, as much as $25,000 more than the state average. Many of these in-demand energy jobs require little more than a high-school diploma. In a state where more than one in ten residents are stuck below the poverty level, this potential is life-changing.
The positive spillover effects of the energy boom in Pennsylvania are large and growing. Another Penn State study found that small local businesses outside the energy sector are among the chief beneficiaries. In Bradford County, a rural area where hundreds of new wells have been drilled since 2008, one-third of all local businesses saw increased sales directly attributable to drilling activity. Restaurants, financial services businesses and the wholesale trade and business-service sectors all reported surges in revenues.
The above energy boom is a net creator of tax dollars, not a net user of tax dollars as the politically correct energies of wind, solar, and ethanol. Better yet, the energy-industry success is contributing to a more secure retirement future for millions of Americans with private and public pensions holding about half of all shares in U.S. oil and natural gas companies.
A study for the American Petroleum Institute found that between 2005 and 2008, energy stocks made up 3.9 percent of public pension holdings in Michigan, Missouri, Ohio and Pennsylvania but accounted for 8.6 percent of their returns.
The United States has always been blessed with bountiful resources and entrepreneurial citizens, of which the oil and gas boom is the latest example. The myriad benefits from the New Prometheus have the potential to continue to advance the American dream for all of us as consumers, producers, and investors.
14 Comments on "The American Oil & Gas Industry Is Rescuing The Obama Economy"
Kenz300 on Tue, 18th Jun 2013 1:00 pm
Forbes — an infomercial for the top 1%.
mo on Tue, 18th Jun 2013 1:20 pm
Ya gotta be kidding.shale oil and gas cheap?????
BillT on Tue, 18th Jun 2013 2:01 pm
You have to remember that the average sheeple IQ is dropping along with the value of the dollar. With half of the nation’s households sucking the government teat, they are not going to bite the hand that feeds them by questioning their masters.
Arthur on Tue, 18th Jun 2013 2:11 pm
All short term feel-good jubilation. If Forbes was an intelligent responsible medium, it should look further into the future than just the next few years. It takes decades to switch to a different mode of society. If Forbes would pay a little attention, it could know that the bridge half an hour down the road has collapsed. Yet Forbes decides to enjoy the scenery and step on the gas.
DMyers on Tue, 18th Jun 2013 3:30 pm
Noted expert Daniel Yergin concurs. “Abundant low-cost energy is stimulating a revival of manufacturing in the U.S. as well as increased American economic competitiveness,” he states, countering what otherwise is “a time of stubbornly high unemployment.” [quote from principle article]
Noted expert? In what, wishful thinking? (okay, sure, I know who Yergin is) What we’re dealing with here is not all that abundant, unless you choose to throw in the rock along with the “oil” and act like it’s all equal. It isn’t “low cost”, and there is not a revival of manufacturing in the U.S., new energy or not. I wish it were so!
“…. technologically unlocked oil and gas has created an energy revolution…” It is essential that we understand this is a product of TECHNOLOGY, so we can realize that we are, in the end, the same nature conquering nation we always have been, and we will once again assume our rightful place as world leader in gadgets and transportation.
And, of course, what article of this genre could forget to mention “….the United States is expected to surpass Saudi Arabia as the world’s leading oil exporter…?” I believe that moment is slated to occur at exactly the same time that we arrive at equality with Saudi Arabia in terms of access to fresh water.
At any rate, don’t be heading out to Pennsylvania, where “…[T]he positive spillover effects of the energy boom …are large and growing,” until you can confirm that whatever is spilling over up there does not include fracking water.
Newfie on Tue, 18th Jun 2013 3:48 pm
And then… the shale oil will run out… and then ?
Never ending growth is a fairy tale. Never ending consumption of non-renewable resources is a dead end street.
“The most significant characteristic of modern civilization is the sacrifice of the future for the present, and all the power of science has been prostituted for this purpose.” – William James
Plantagenet on Tue, 18th Jun 2013 4:05 pm
Drill baby drill worked.
DC on Tue, 18th Jun 2013 4:20 pm
RoFL! There is no ‘Obama’ economy, just the prison-war-oil-agricorp-gun-wall mart-wall st. economy. All heavily subsidized too.
GregT on Tue, 18th Jun 2013 4:36 pm
More like “Obama Is Rescuing The American Oil & Gas Industry”
“The myriad benefits from the New Prometheus have the potential to continue to advance the American dream for all of us as consumers, producers, and investors.”
“The owners of this country know the truth: It’s called the American dream because you have to be asleep to believe it.”
George Carlin
J-Gav on Tue, 18th Jun 2013 4:58 pm
Give us a break with Yergin the gherkin, already …
greg vega on Tue, 18th Jun 2013 6:04 pm
Are u kidding me daniel yergin noted expert. His phd is in international relations a bullshit degree. When the oil drum had phds in geology and other geot-echnical posters it was unanimous that this guy was a quack and still is
rollin on Wed, 19th Jun 2013 12:00 am
The polarization of thought occurring during peak oil is absolutely amazing. It seems to be infecting every aspect of life.
dave thompson on Wed, 19th Jun 2013 7:15 pm
This article proves that fossil fuel energy is the economy. The people on top win. The rest of us are…………….
Bob Owens on Wed, 19th Jun 2013 10:20 pm
Nothing like some oil-candy to give me sugar shock.