President Obama would have us believe that he considered everything when he came up with his latest plan to create jobs. Yet he ignored a plan that could create 1.4 million more jobs and $803 billion in revenue. According to a the Wood Mackenzie Study, funded by the American Petroleum Institute (API), the United States could increase oil production by 10 million b/d of oil equivalent, create 1.4 million jobs, and generate more than $803 billion by 2030, if we just developed existing resources within the country.
The Wood Mackenzie study was presented at an energy jobs summit in Washington, D.C. The study considered two different scenarios, the Current Path Case Production — what the job situation would be if the government continued on its current path — and Development Policy Case. Under the Development Policy Case, the study claimed that a jobs and revenue boon could result if the government opened up federal areas that were currently off-limits to drilling, such as the Eastern Gulf of Mexico, parts of the Rockies, and the Alaskan National Wildlife Refuge (ANWR); if it lifted a drilling moratorium in the state of New York; if more offshore drilling were allowed in the Gulf of Mexico; if the Keystone XL pipeline and other pipelines from Canada to the U.S. are approved; and if regulation of shale is done predominantly at the state level.
If the U.S. follows these steps, oil production would increase 76% over 2010 levels. For every job created directly for energy production, several more would be created indirectly, from revenue spent by the newly employed. Revenue would reach $36 billion by 2015.
At the same time, the Wood Mackenzie study predicts that the current path would simply increase the regulatory burden on domestic producers. Its Current Path Case Production assumes that the federal government will never permit Gulf of Mexico drilling to return to pre-moratorium levels, that it will introduce regulations for hydraulic fracturing and water disposal that are more burdensome than those by state governments, that it will not open up new areas of development, and that it will restrict new pipeline development from Canada. Under this scenario, the job production would remain nearly flat, with just a little over 500,000 jobs added by 2030.
Inevitably, proposals this ambitious would face major fights in Congress and push-back from Obama’s liberal supporters. There is little support for expanding drilling into ANWR, and Obama himself would be too fearful of offending his supporters by expanding offshore leasing to the extent in the study. But this is the sort of big thinking that needs to happen in order to get the U.S. economy back on track. For too long, the Obama administration has found a handy scapegoat in energy producers from Texas and other parts of the country. He claims they are responsible for all of the environmental and economic ills of the country. Yet a Texas oil and gas attorney knows that most energy producers are decent and law abiding. They want to keep their businesses afloat without being drowned in regulations. Obama could make energy producers allies, not enemies, and everyone would benefit.