Saturday, November 26, 2011

The Non-Green Energy and Jobs Boom

Drill, drill, drill = jobs, jobs, jobs in North Dakota
From today's WSJ staff editorial:

"The ironies here are richer than the shale deposits in North Dakota's Bakken formation. While Washington has tried to force-feed renewable energy with tens of billions in special subsidies, oil and natural gas production has boomed thanks to private investment. And while renewable technology breakthroughs never seem to arrive, horizontal drilling and hydraulic fracturing have revolutionized oil and gas extraction—with no Energy Department loan guarantees needed.

The oil and gas rush has led to a jobs boom. North Dakota has the nation's lowest jobless rate, at 3.5%, and the state now has some 200 rigs pumping 440,000 barrels of oil a day, four times the amount in 2006 (see chart above). The state reports more than 16,000 current job openings, and places like Williston have become meccas for workers seeking jobs that often pay more than $100,000 a year.

Or take production in Pennsylvania's Marcellus shale formation, which the state Department of Labor and Industry says created 18,000 new jobs in the first half of 2011. Some 214,000 jobs are now tied to a natural gas industry that barely existed in the Keystone State a decade ago. Energy firms are also rushing to develop the Utica shale in eastern Ohio, and they are expanding operations in Texas, Louisiana and Oklahoma, among other places. 

Yet earlier this month the Interior Department released a new five-year plan that puts most of the Outer Continental Shelf off-limits for oil drilling. And the Administration has delayed for at least another year the Keystone XL pipeline that is shovel-ready to create 20,000 new direct, pipeline-related jobs.

The Office of Natural Resources Revenue recently noted that federal revenue from offshore bonus bids (from lease sales) in fiscal 2011 was merely $36 million—down from $9.5 billion in fiscal 2008. The Obama Administration has managed the nearly impossible feat of turning energy policy into a money loser, pouring taxpayer dollars into green-energy busts like Solyndra. The Washington Post reported in September that Mr. Obama's $38.6 billion green loan program had created a mere 3,500 jobs over two years. He had predicted it would "save or create" 65,000. 

Mr. Obama nonetheless keeps talking about "green jobs" as if repetition will conjure them. He'd do more for the economy if he dropped the ideological illusions and embraced the job-creating, wealth-producing reality of domestic fossil fuels."

10 Comments:

At 11/26/2011 11:19 AM, Blogger rjs said...

Renewable power trumps fossil fuels for first time...

Electricity from the wind, sun, waves and biomass drew $187 billion last year compared with $157 billion for natural gas, oil and coal, according to calculations by Bloomberg New Energy Finance using the latest data. Accelerating installations of solar- and wind-power plants led to lower equipment prices, making clean energy more competitive with coal.

http://www.latimes.com/business/la-fi-renewables-20111125,0,2421278.story

 
At 11/26/2011 1:23 PM, Blogger westexas said...

Note that total US crude oil production (EIA, Crude + Condensate) will probably average about 5.7 mbpd (million barrels per day) in 2011, versus the pre-hurricane rate of 5.4 mbpd that we had in 2004.

And here is a look at some global numbers for 2002 to 2010:

Five annual "Gap" charts follow, showing the gaps between where we would have been at the 2002 to 2005 rates of increase, versus the actual data in 2010 (common vertical scale):

EIA Total Liquids (including biofuels):
http://i1095.photobucket.com/albums/i475/westexas/Slide1-18.jpg

BP Total Petroleum Liquids:
http://i1095.photobucket.com/albums/i475/westexas/Slide06.jpg

EIA Crude + Condensate:
http://i1095.photobucket.com/albums/i475/westexas/Slide05.jpg

Global Net Oil Exports (GNE, BP & Minor EIA data, Total Petroleum Liquids):
http://i1095.photobucket.com/albums/i475/westexas/Slide07.jpg

Available Net Exports (GNE less Chindia’s net imports):
http://i1095.photobucket.com/albums/i475/westexas/Slide08.jpg

I would particularly note the difference between the first chart, total liquids, and the last chart, Available Net Exports (ANE).

 
At 11/26/2011 1:25 PM, Blogger westexas said...

To capture the links to the images, copy from below the link.

 
At 11/26/2011 1:48 PM, Blogger arbitrage789 said...

rjs @ 11:19

I fully, and indeed, enthusiastically support "green energy" PROVIDED that it can stand on its own without taxpayer support.

 
At 11/26/2011 3:51 PM, Blogger juandos said...

re: Renewable power trumps fossil fuels for first time

This is from the UN?!?!

The same UN that is trying foist off the IPCC scam?

Gee! I wonder what the real numbers are espcially in light of this: The renewables boom, spurred by about $66 billion of subsidies last year?

 
At 11/26/2011 5:15 PM, Blogger PeakTrader said...

This comment has been removed by the author.

 
At 11/26/2011 5:34 PM, Blogger PeakTrader said...

RJS says: "Electricity from the wind, sun, waves and biomass drew $187 billion last year compared with $157 billion for natural gas, oil and coal."

U.S. electricity generation by source - 2010:

Coal 45.6%
Natural Gas 23.99%
Nuclear 19.30%
Hydro 6.4%

Roughly 5% for everything else, including wind, solar, biomass, geothermal, wood, etc.

 
At 11/26/2011 9:48 PM, Blogger kmg said...

As Instapundit points out, feminists have been blocking anything that creates male jobs, and diverting money to anything that creates female jobs (market needs be damned) :

http://pjmedia.com/instapundit/132373/

In America today, destroying 2 male jobs to create 1 female job is acceptable.

 
At 11/28/2011 5:24 AM, Blogger juandos said...

Again from the WSJ:


The Bureau of Labor Statistics reported recently that the U.S. jobless rate remains a dreadful 9%. But look more closely at the data and you can see which industries are bucking the jobless trend. One is oil and gas production, which now employs some 440,000 workers, an 80% increase, or 200,000 more jobs, since 2003. Oil and gas jobs account for more than one in five of all net new private jobs in that period...

It gets better: The Office of Natural Resources Revenue recently noted that federal revenue from offshore bonus bids (from lease sales) in fiscal 2011 was merely $36 million—down from $9.5 billion in fiscal 2008. The Obama Administration has managed the nearly impossible feat of turning energy policy into a money loser, pouring taxpayer dollars into green-energy busts like Solyndra. The Washington Post reported in September that Mr. Obama's $38.6 billion green loan program had created a mere 3,500 jobs over two years. He had predicted it would "save or create" 65,000...

 
At 11/28/2011 10:09 AM, Blogger VangelV said...

The Bureau of Labor Statistics reported recently that the U.S. jobless rate remains a dreadful 9%. But look more closely at the data and you can see which industries are bucking the jobless trend. One is oil and gas production, which now employs some 440,000 workers, an 80% increase, or 200,000 more jobs, since 2003. Oil and gas jobs account for more than one in five of all net new private jobs in that period...

This is all fine. The problem is that we do not have any evidence that the shale gas and oil production is anything more than marginal. If you look at the 10-K filings and listen to the conference calls you will find negative cash flows that create huge funding gaps and a lot of talk about asset sales. That is not very promising to me particularly when we have natural depletion rates of more than 6% from wells in existing conventional fields, 25% for wells in off shore fields, and 75%-90% for wells in shale formations.

I see Mark keep posting references to articles that hype up shale gas and oil but have yet to see any rational discussion about the very real issues in the sector. My problem is that the hype may lead people to make lousy bets yet again even as they ignore some very good energy plays in the conventional space that are dirt cheap. As someone who is optimistic about the long run solutions I fear that there are too many empty suits who will make the transition much more difficult than it needs to be and will make most investors much poorer.

 

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