Obama, the Ingrate
The December jobs report was truly awful, with 74,000 non-farm jobs created and the labor-force participation rate at a 35-year low. Liberals -- the same bunch who insist that the climate is warming at an alarming rate -- were quick to point to cold weather as a factor discouraging job-creation. They also insisted that the jobs numbers are volatile and that they might be better next time. Of course, they might be worse.
Regardless, nothing can hide the fact that Obama's job-creation record has been a disaster. Having "focused like a laser" on job growth several times in the past, Obama reportedly plans to do so again in his State of the Union address on January 28.
Interestingly enough, jobs and the economy were the centerpiece of Obama's State of the Union speeches in 2010, 2011, 2012, and 2013. And each year, the labor-participation rate and net number of jobs declined as a greater number of discouraged workers gave up than found jobs. For 2014, it's more of the same: empty words, a new initiative ("promise zones"), and no result.
Ironically, the only sector that has seen strong and persistent job growth since 2008 has been oil and gas. Ironic, because Obama has done all he can to slow domestic oil and gas production by expanding regulation, restricting leasing of federal lands, and proposing huge tax increases on the sector.
From 2008 to 2013, jobs in the oil and gas sector increased by 26.2%, as compared with minus 2.3% overall job growth. From its trough in 2004 to 2013, the sector added a net 75,000 high-paying jobs and millions of jobs indirectly in fields such as transportation, fabrication, housing, education, and services. Oil and gas jobs continue to be created at a rapid pace. According to the Bureau of Labor Statistics, another 9,700 jobs were created directly in the oil and gas industry in the first half of 2013, with the full year on track for some 20,000 net jobs created.
Given the magnitude of these numbers, and their importance in supporting spin-off jobs, one would expect the Obama administration to be solidly behind the shale drilling revolution. Unfortunately, that is not the case. The best one can say is that Obama has offered two cheers -- or maybe just one -- for natural gas as a "bridge fuel" to wind and solar, and no cheers at all for oil.
That's unfortunate, because it's oil even more than natural gas that is supporting current job-creation. As natural gas prices fell from $14 per mBtu to below $2 (recovering to the current level of around $4.50), energy companies shifted resources from gas exploration to oil. Most of the jobs now being created in the sector are linked to exploration and production in oil-rich areas such as the Bakken Formation in North Dakota, the Eagle Ford in south Texas, and the Permian Basin in west Texas.
This investment has resulted in a dramatic increase in domestic oil production, from 4.550 million barrels per day in October 2005 to 7.753 million barrels per day in October 2013. In fact, the U.S. has now passed Saudi Arabia as the largest producer of oil in the world.
What is the Obama administration's response to all of this? Inaction, and for the most part, silence. Oil remains the left's bogeyman, and Obama is not about to defy the left's irrational bias against oil.
While Obama has given lip service to increased use of natural gas as a cleaner alternative to coal, he remains largely silent on the benefits of increased domestic oil production. A whitehouse.gov page that acknowledges the recent increase in domestic oil production nonetheless proclaims: "We can't drill our way to cheap gas prices," and "[m]ore domestic drilling will never meet our energy needs."
Those are mantras, not rational arguments. Obviously, we can drill our way to cheaper gas prices. We have done so over the past three years as domestic drilling has increased. And more domestic drilling will contribute the lion's share of U.S. energy needs well into the future, according to BP's "Energy Outlook 2035."
As the BP report makes clear, domestic oil production is and will continue to be one of the strongest sectors of the U.S. economy for decades to come. It will create hundreds of thousands of new jobs directly and support millions of others indirectly. Yet Obama can barely bring himself to utter the word "oil." And when he does, it's with the reminder that "we can't drill our way out."
What could the president do, aside from approving the northern section of the Keystone Xl pipeline, to spur domestic and North American oil production? He could begin by dropping his demand for $44 billion of new taxes on domestic oil and gas companies. That demand has been a staple of every one of Obama's State of the Union addresses, and no doubt it will be repeated again on January 28.
He might also end his attacks on energy company profits. On whitehouse.gov, the administration proclaims that "oil companies profit when Americans pay more at the pump." True -- and they lose money when gas prices decline, in line with the underlying price of oil. Apparently the president is not aware of the fact that oil prices do quite frequently decline, and that when they do, oil companies see their profits decline. Or is he just playing politics, thereby putting our energy future at risk?
If the president really were serious about job-creation, he would be cheering the explosive growth of domestic oil production. Instead, even as he takes credit for increased production, he attacks oil companies, proposes huge tax increases on them, and attempts to block new production through strict regulation of hydraulic fracturing and the slow-walking of federal drilling permits.
Instead of three cheers for domestic oil, Obama gives oil the Bronx cheer. But even this president must know that domestic oil and gas production is saving his bacon. Even as he parrots the left's irrational bias against oil, perhaps Obama will have enough sense not stand in the way of increased production in the future. One can only hope.
Jeffrey Folks is the author of many books on American politics and culture, including Heartland of the Imagination (2011).