Job security, energy security and economic growth are three things that are extremely important in the global economy. At the time of writing, the UK unemployment figure was just below 2.5 million and US unemployment stood at approximately 15 million. Unemployment levels are forecast to increase throughout 2011 and this is a great cause for concern. At The State of American Energy Event at the Newseum, Washington DC, US, held on 4 January 2011, American Petroleum Institute (API) President and CEO Jack Gerard delivered a speech and introduced the report, ‘The State of American Energy 2011’. Both Gerard’s speech and the report discuss the importance of the oil and natural gas industry in supporting and creating US jobs, funding the US economy and encouraging GDP.
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The report states that the US oil and natural gas industry currently sustains more than 9.2 million US jobs (both directly and indirectly) and argues that access to off limits reserves in areas such as the Outer Continental Shelf, Arctic National Wildlife Refuge and the Rockies could create an additional 160 000 jobs by 2030. It also suggests that increased production from the Canadian oilsands has the potential to add 340 000 jobs to the North American market. At the moment only 10% of the oilsands are economically recoverable, so surely, if greater investments were made in technology and environmental regulations were finalised, a higher percentage of the 1.7 trillion bbls of crude bitumen could be recovered and the 340 000 potential jobs could be created. These are all big asks, but surely the long term economic benefits are worth these propositions being considered?
The report also argues that access to off limits reserves of oil and gas could help generate higher levels of revenue for the US government, reaching US$ 1.7 trillion. The industry has already contributed US$ 1 trillion (between 1980 and 2008), which is 7.5% of US GDP and provides the US treasury with US$ 20 million each day.1 The report ‘calls on policy makers to encourage domestic energy growth, which, in turn will result in increased government revenues and avoid punitive taxes and over reaching regulations that could harm economic growth and energy security.’ Economic growth and energy security are two areas of the US economy, in fact the global economy, that are exceedingly important at the moment as the world continues to emerge from the still recent financial crisis.
Natural gas is focused on heavily in the report, which asks policy makers to ‘recognise the environmental, economic and efficiency benefits of natural gas’ and US President Barack Obama is quoted as saying ‘we’ve got, I think, broad agreement that we’ve got terrific natural gas resources in this country. Are we doing everything we can to develop those?’ In this issue of Hydrocarbon Engineering, Gordon Cope, Contributing Editor looks at the American natural gas industry in the article ‘Gas bubble trouble’ (p. 12). Cope discusses the glut in natural gas production currently being experienced by the US petroleum sector. So maybe, as far as natural gas is concerned, accessing reserves from off limits areas and encouraging development from already well established natural gas sources would not necessarily be the best thing to do for the US economy at the moment.1. American Petroleum Institute, The State of American Energy 2011.