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Page added on February 21, 2014
Jobs, Economic Growth And Security
For all the climate-based hysteria put out into the public domain in recent weeks attacking the oil and natural gas industry (even the Weather Channel got into that act recently), three key factors continue to give policymakers pause about acting in ways that would negatively impact the ongoing boom. Those factors are:
- Jobs;
- Ancillary stimulative impacts on other industries; and
- National Security.
The reality for the United States is that the oil and natural gas industry has greatly enhanced the picture around all three of these critical factors in recent years, nowhere more than in my home state of Texas.
Where jobs are concerned, Texas has consistently outperformed the national economy in terms of job creation and rate of unemployment in every month since the advent of the Great Recession and the discovery of the Eagle Ford Shale play, both of which took place in October of 2008. Indeed, during the 24 month period from July 2009 through June of 2011, Texas created 49% of all new jobs created in the United States, and the vast majority of those jobs were either directly or indirectly the result of the state’s oil and natural gas boom, centered in plays like the Eagle Ford in South Texas, the Permian Basin of West Texas, and the Granite Wash play in the Texas Panhandle.
Nationally, the story is almost as good. Investors Business Daily ran a great piece on February 19 detailing much of the story from a national standpoint. Here is a key excerpt:
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.
Direct employment in the oil and gas industry rose 40% from 2007 through 2013, as compared to a decline of about 3% in the overall U.S. economy. All the new oil production that has come online since 2008 has reduced oil imports by about 50%, and lower natural gas prices brought about by the boom in supplies of that commodity. This has in turn attracted a rush to invest in new plant and equipment among industries that use petroleum products as feedstocks – think fertilizers, chemicals, plastics, cosmetics and many more – or service or sell products to the industry.
IBD points out that more than 100 new plants and factories in a variety of such industries are planned to come online by 2017, and “When all are up and running, another $300 billion will be pumped into GDP and 1 million more jobs created.”
One industry that is often overlooked in this discussion is the U.S. shipping industry, which is experiencing a boom of its own as demand increases for the ability to move oil and liquefied natural gas between U.S. ports or overseas. As CNBC pointed out last October, the Jones Act mandates that all goods moved from one U.S. port to another – as much crude oil must be in order to be refined – be carried on vessels that are built and flagged in the United States. U.S. shipbuilders are having a field day attempting to fill this new, growing demand for their products, and according to the U.S. Department of Transportation, are experiencing their largest boom in more than 2 decades.
And the boom cascades on down to the ports that service and supply the ships. About mid-year in 2013, the Port of Houston surpassed the port of New York City to become the nation’s top export market. To no one’s surprise, this was due mainly to the surge in oil and gas related activity at the port.
The Port of Corpus Christi has also seen a similar rapid ramp-up in activity, and now exports almost 400,000 barrels of oil each day overseas and to other U.S. ports. The surge in Corpus Christi has come mainly from light sweet crude produced in the nearby Eagle Ford Shale.
The oil and gas boom has also served to significantly enhance the national security positioning of the United States, reducing the country’s dependence on unstable parts of the world, like the Middle East, and enhancing its ability to conduct effective negotiations with hostile nations such as Iran. Writing in the March/April issue of Foreign Affairs, Robert D. Blackwell and Meghan L. O’Sullivan do a wonderful job of detailing the myriad ways in which the oil and boom enhances U.S. standing in the international community, arriving at this conclusion:
The energy boom will add fuel to the country’s economic revitalization, and the reduction of its dependence on energy imports will give it some measure of greater diplomatic freedom and influence… the huge boom in U.S. oil and gas production, combined with the country’s other enduring sources of military, economic, and cultural strength, should enhance U.S. global leadership in the years to come — but only if Washington protects the sources of this newfound strength at home and takes advantage of new opportunities to protect its enduring interests abroad.
And that is the challenge faced by policymakers at the state and national level: to avoid – to put it in crude terms – screwing all of this newfound opportunity up with misguided policy decisions.
Hysteria mongers like Ceres, like Bill McKibben, like the Center for Public Integrity, Earthworks and the Center for Biological Diversity would have our policymakers toss away all of these jobs, reject all of this massive economic impact, and toss aside all the strategic advantages the oil and natural gas boom has brought to this country and its people over the last six years. Unfortunately, we see their talking points and fake ‘studies’ largely parroted without critical examination in much of the nation’s news media on a daily basis, a disservice to the public and to policymakers who need real, accurate information in order to make intelligent decisions.
Even in Texas, we see these groups becoming increasingly active and getting more attention in the state’s media outlets. Those who feel strongly about the need to avoid bad policy decisions that could prematurely end this ongoing boom should get active and communicate your views to your various government representatives. They need to hear from you, because you can rest assured they are hearing from the very loud – if tiny – minority who would kill this boom each and every day.
God Bless Texas.
15 Comments on "Jobs, Economic Growth And Security"
Davy, Hermann, MO on Fri, 21st Feb 2014 2:11 pm
Damn, I am tired this morning of writing. The talk too much and you can deceive yourself into thinking you know what you are talking about. The weather is improving and I have to get in the garden and get some prep work going. Spring is around the corner. Look, if you read my previous post then more of the same here. There are bigger things going on than FORBEs can get a handle on here. There are trade off that until, We as a Global Society, acknowledged, then we are beating our heads against the wall. One last time…we must move up the ladder here and elsewhere. If we can’t and maybe we can’t then game over in a bit. It will be a big retirement party for all of us. My wore out advise “fasten the seat belts and enjoy life now”!!!!
Kenz300 on Fri, 21st Feb 2014 2:22 pm
Forbes — a tool of the top 1% — more propaganda for the fossil fuel industry.
Northwest Resident on Fri, 21st Feb 2014 2:58 pm
This article is an excellent portrait of BAU with its head stuck up its ass. It is a pathetic sight to see writers like this one trumpeting economic growth when the very ground they stand on is crumbling beneath them and they don’t even know it.
rockman on Fri, 21st Feb 2014 4:32 pm
NR – Sorry…our ground in Texas isn’t crumbling. BAU is not “as usual” in Texas…it’s doing a heck of a lot better. So there’s nothing incorrect in this piece. OTOH it’s very myopic for sure. But he’s not talking about the rest of the world or even the US. He’s talking about the oil patch. With $95/bbl oil we’re doing great. Especially those who developed oil reserves back when they were justified developing at $30/bbl.
Propaganda??? I don’t see much if any at all. A fair bit of unsavory bragging for sure. But as we say in Texas: It ain’t bragging if it’s true. Which, of course, is still unsightly bragging. LOL. No mistake about it: society is royally screwed…and it’s bound to get worse. But he’s talking about the oil patch…and we ain’t screwed. At least not yet.
Northwest Resident on Fri, 21st Feb 2014 4:53 pm
rockman — It does look like Texas is rocking and rolling right now, but the author did state “Nationally, the story is almost as good. Investors Business Daily ran a great piece on February 19 detailing much of the story from a national standpoint.” I think the oil business in Texas has gone through a “few” peaks and valleys in our time, boom and bust — you know that tune. Only thing is, this boom in Texas — and nationally — is built on the last fumes of a once vast resource and when it goes bust this time, it is likely to be the bust that outdoes all the previous busts and by a big margin — in Texas, and nationally. I just hate to see writers standing up on a soapbox crowing about how great things are going from an economic standpoint when truth is we are on the verge of a 2008-style economic collapse of epic proportions — even if they are making fistfuls of dollars in Texas, for now.
GregT on Fri, 21st Feb 2014 5:00 pm
“God bless Texas”
Wow, quite the PR campaign that, kind of difficult to argue with God…………
robertinget on Fri, 21st Feb 2014 5:27 pm
Forbes has yet to reflect on public anguish bankers brought down on America, indeed the entire world. Yet, when higher gas and oil prices reflect exceedingly cold weather in North America and record heat
in Australia, Forbes gets all defensive
on us.
Ya know how folks around these parts are always writing about “BAU”?
Well Forbes, FOX, is all about “RWJAU” (right wing journalism as usual)
Rockman is correct, everything in the piece is true, it’s what Forbes is NOT saying is what is important.
During the “Cold War” our CIA folks read “Asvesta” (Russian for truth) cover to cover just to see what Soviets deleted from important news stories. This was one great way to discover political trends.
In defensive pieces like above we discover weakness, not strength as intended. The Right is divided over science. The Republican working class ‘base’ are getting slightly less confident people have little or nothing to do with Climate Change. Whenever this sort of feeling is in danger of turning into a movement, it’s time for injections of “good news”. I have feeling we will be inundated with more great fossil fuel news as storms, droughts, heat waves become unmanageable news wise.
GregT on Fri, 21st Feb 2014 7:47 pm
“I have feeling we will be inundated with more great fossil fuel news as storms, droughts, heat waves become unmanageable news wise.”
I see it more like the waves of an incoming tsunami on a rising tide. Every time the waves go back out there is a moment of relaxation, and more good news from the media propagandists. Eventually the waves will become too big to ignore, hopefully people wake up, long before it gets to that point.
DC on Fri, 21st Feb 2014 7:52 pm
Of course things are good in the ‘oil patch’,-from the inside. Think about it, when have times EVER been bad for the oil cartel, especially in the US of war and coal. The US is best place in world, well except, maybe for the Niger to be in the oil business.A regulation-free environment, endless corporate welfare, a corrupt police, legal and military system to bash anyone heads that get in the ‘way’, and a virtually royalty-free environment. How can the oil could the oil cartel *not* be doing well in the Us, seriously. Between sustained high prices and endless corporate welfare, the oil cartel can afford to be generous to the relatively small # of people on the ‘inside’. Forbes propaganda fluff machine can bless, gawd, capitalism, endless subsidies and so on, but just because times are ‘good’ for the oil cartel, hardly means its ‘good’ for everyone.
For an equally valid example, times have never…ever been better for the Wall St oligarch and frauds. They came out of the manufactured ‘crisis’ of 2008, wealthier and stronger than ever. Outside of Wall St however, few people would say any of this is a good thing. Likewise, the ongoing corruption(BAU) and environmental destruction of the oil cartel does indeed provide material benefits-for a few. For everyone else, its just means more pollution, higher costs for dirty, destructive energy, and it keeps moving everyone towards that energy cliff at high speed. But hey, amerikan rednecks that can barely spell their own name can make 400k a year!
So no one feels bad, the tar-sands in alta. also pay rednecks that can barely spell their own names exorbitant wages as well.
So its all good….
rockman on Fri, 21st Feb 2014 8:28 pm
NR – I agree. Like most Texans he didn’t know when to shut up. A “bridge too far”, so to speak. LOL.
And that’s why I harp on the point that the increase in US oil production has NOT been a good thing for the consumer. The increased price tag for all that new oil has cut deep into an economy that’s been struggling to recover.
Do I lay in bed at night feeling guilty over the increase in oil costs for the economy? No. OTOH when oil got close to $10/bbl in the mid 80’s and I was paying the bills by delivering produce to restaurants I wasn’t cursing the situation either. Just part of the inevitable business cycle. Kinda like cursing a hurricane: don’t like them either but sh*t happens and it’s not really anyone’s fault. I sit here now anticipating a crash in the oil patch. Do I expect one just around the corner? Not necessarily. But I’ve been thru enough booms/busts that the expectation is unavoidable. Kinda like death. LOL.
Bob Owens on Fri, 21st Feb 2014 9:47 pm
Yes, the environmentalists are going to screw up everything if we let them. We have such a great deal going now and they only want to destroy everything. What a self-serving article. It is dripping oil all over the place. I can’t stand it. If all this investment that he talks about had been invested in renewable energy it would have had the same economic impact and the windmills would be around a lot longer than any of these fracking wells will be! And if the Trillions of dollars spent on wars over the past decade had been put into renewables we would be free of oil now. We have gone too far down the road of stupidity to turn back now.
Makati1 on Sat, 22nd Feb 2014 3:24 am
More BS in heavy doses coming as the Oil Giants are brought down by Jack 6 pack’s lack of income to consume. More BS from the Banking Cartel trying to convince us that the economy is growing and unemployment is shrinking. Fun to watch. Not so much fun to experience.
Who needs TV or movies if you are into world events? I sure don’t. And it is going to get more and more exciting as time passes. Need to go an stir the beef stew. Sunny and 85F today.
Davy, Hermann, MO on Sat, 22nd Feb 2014 10:56 am
Joe 6 pack Makati at least in Amerika as DC calls it
mo on Sat, 22nd Feb 2014 1:01 pm
I didntknow the eagle ford was only discovered in 2008.
Makati1 on Sat, 22nd Feb 2014 1:44 pm
Davy, it was a reference to Jack the Giant Killer of Jack and the Beanstalk fame. would Daniel 6 pack have been more appropriate? I don’t do Bible fables except when I refer to the Four Horsemen.