While yesterday's disappointing employment report reflects an economy struggling to create jobs during an extended, sub-par "jobless recovery," it's been a much rosier employment picture in one of America's most successful "shovel-ready" job-creating industries: Oil and Gas Extraction.
The chart above displays the monthly percentage changes in employment levels since January 2007 for oil and gas extraction jobs compared to total nonfarm payroll jobs. As of last month, total nonfarm payroll employment is 3.0%, and 4.1 million jobs, below the January 2007 level. In contrast, the explosion of new oil and gas jobs has increased employment in that industry by more than 38% since January 2007. Over the last 12 months, oil and gas companies have added 21,800 new workers, at a rate of almost 100 new hires every business day. And this just accounts for the new jobs created that involve the actual drilling, extraction and production of oil and gas.
A recent study found that for every one new job added in oil and gas extraction activities, there were three new additional jobs created elsewhere in the economy. The report also found that "the jobs-multiplier effect of U.S. oil and natural gas activity is higher than many other U.S. industries, including the financial, telecommunications, software and non-residential construction sectors. This is the result of the energy industry’s long supply chains and relatively high levels of spending by employees and suppliers." As a result of the multiplier effect, the U.S. economy has potentially been adding almost 400 new jobs per day over the last year due to increased oil and gas production.
Imagine what the jobless rate might be today, and imagine all of the additional shovel-ready, energy-related jobs (direct and indirect jobs) that could have been created over the last several years in the oil and gas industry (and its supporting industries), if the Obama administration: a) hadn't been so unfriendly to the low-cost, job-creating, dependable fossil fuel industry (think Keystone XL pipeline for example) that doesn't require picking the pockets of the taxpayers; and b) instead been so over-friendly to the subsidy-dependent, high-cost, unreliable but politically-favored "green" energies. On the other hand, imagine what the jobless rate might be today if we hadn't had the tremendous "energy-stimulus" to the U.S. economy that has resulted over the last few years from increased oil and gas drilling due to technological advances of hydraulic fracturing and horizontal drilling, and taking place mostly on private land?
The chart above displays the monthly percentage changes in employment levels since January 2007 for oil and gas extraction jobs compared to total nonfarm payroll jobs. As of last month, total nonfarm payroll employment is 3.0%, and 4.1 million jobs, below the January 2007 level. In contrast, the explosion of new oil and gas jobs has increased employment in that industry by more than 38% since January 2007. Over the last 12 months, oil and gas companies have added 21,800 new workers, at a rate of almost 100 new hires every business day. And this just accounts for the new jobs created that involve the actual drilling, extraction and production of oil and gas.
A recent study found that for every one new job added in oil and gas extraction activities, there were three new additional jobs created elsewhere in the economy. The report also found that "the jobs-multiplier effect of U.S. oil and natural gas activity is higher than many other U.S. industries, including the financial, telecommunications, software and non-residential construction sectors. This is the result of the energy industry’s long supply chains and relatively high levels of spending by employees and suppliers." As a result of the multiplier effect, the U.S. economy has potentially been adding almost 400 new jobs per day over the last year due to increased oil and gas production.
Imagine what the jobless rate might be today, and imagine all of the additional shovel-ready, energy-related jobs (direct and indirect jobs) that could have been created over the last several years in the oil and gas industry (and its supporting industries), if the Obama administration: a) hadn't been so unfriendly to the low-cost, job-creating, dependable fossil fuel industry (think Keystone XL pipeline for example) that doesn't require picking the pockets of the taxpayers; and b) instead been so over-friendly to the subsidy-dependent, high-cost, unreliable but politically-favored "green" energies. On the other hand, imagine what the jobless rate might be today if we hadn't had the tremendous "energy-stimulus" to the U.S. economy that has resulted over the last few years from increased oil and gas drilling due to technological advances of hydraulic fracturing and horizontal drilling, and taking place mostly on private land?
Wow...that's an amazing set of statistics there.
ReplyDeleteIt is and will ALWAYS be about philosophy - The current administration is opposed to oil/gas (fossil fuels) no matter what the impact of that industry may be to the economy - I would guess that those opposed to oil/gas consume MORE than those that simply try to live and survive.
ReplyDeleteYes, they ARE interested in holding onto power anyway they can (yes, like all politicians, all parties) - so I would expect them to do something "dramatic" in the months/weeks leading to the election in Nov 2012 - who knows, they may approve the Keystone pipeline (only to yank it if they win again) - I would also expect them to claim credit for the lowering of gasoline prices (In their mind, when prices go up, it is the fault of the speculators - when prices come down, it is because THEY did something good)
The Sierra Club has targeted "fracking" - I am sure they will be asked to tone down their rhetoric till Nov 2012 - after which (if they win) we will see our economy really tank ... and cause incomparable pain to the ordinary folk in many, many ways ...
I ignore what they say (the self appointed elites who think they know everything) - and look at the philosphy that drives them - Nothing will fundamentally change their mind no matter what they appear to do to win elections
It is indeed sad what we (they) have had done to us recently - and I am afraid there is more abuse to come - even as we watch and read about the amazing energy revolution in the US
so how many of the 69,000 were from the oil and gas "boom"?
ReplyDeletehow many oil/gas jobs added since January?
Wow. I'm no fan of Romney (or Obama), but these kinds of statistics could provide one of his strongest avenues of attack, combined with the failing subsidized solar companies and all.
ReplyDeleteWell even if Exxon is using a bit of public relations hyperbole in their one for three claim it probably still is not far from the mark...
ReplyDeleteMy brother who lives in Laredo (considered the very southern tip of the Eagle Ford area) has seen his work load with copiers and other types of office equipment increase by about 50% since Thanksgiving of last year...
My brother has a friend he's known since 1st grade and his friend's father who is in his early seventies now started up a garbage hauling business that is 90+% work in the Eagle Ford area...
He now has his whole family working the business and forty five other folks along with 16 new trucks, all work and paychecks (and taxes being paid) that weren't there last Xmas...
How long will it all last?
Who cares?
Its paying off handsomely right now for all concerned...
Now what would really be nice is if federal government over reach could be curtailed somewhat...
ReplyDeleteWouldn't that improve the prospects of more job creation and lower priced products?
From the Oil & Gas Journal: EPA issues final rule for refinery flares, process heaters
The new rules won’t deliver what EPA promises, API and AFPM officials said in separate responses. They will be tremendously costly to refiners without providing significant environmental benefits, API Regulatory and Scientific Affairs Director Howard Feldman maintained.
“Refineries have spent billions of dollars to improve environmental performance and air quality continues to improve under existing regulations,” he said. “This is part of a tsunami of new EPA air regulations for refineries that could diminish our fuel manufacturing capacity and increase our reliance on imported fuels.”
David Friedman, AFPM’s vice-president for regulatory affairs, said EPA’s final rule was more balanced than previous proposals, but that, “EPA still falls short in issuing commonsense standards.” He said, “This final rule will not ‘dramatically save’ but rather cost the industry significant amounts each year, adding to the billions already paid in complying with the myriad fuel and stationary source regulations, some of which are conflicting and contradictory.”
" Employment in other major industries, including mining
ReplyDelete...and logging, retail trade,
information, financial activities, leisure and hospitality, and government,
changed little in May."
okay.. can anyone explain why we're having an oil/gas "boom" that is producing jobs... housing shortages.. increased sales....etc
and it does not show up on the jobs report?
Larry,
ReplyDeleteOil and gas has "saved or created" jobs all across the economy. We'd be in even worse shape without the boom. It's kinda like Obama's defense of his stimulus, except it has the benefit of being true.
"It's kinda like Obama's defense of his stimulus, except it has the benefit of being true"...
ReplyDeleteDing! Ding! Ding! paul nails it in one!
From the American Enterprise blog: Did the stimulus create as much growth as Obama predicted? Not even close
By James Pethokoukis
June 2, 2012, 8:59 am
"but gained 6700 jobs since December. Big effing deal"...
ReplyDeleteAsk a few of those 6700 how big a deal it is...
"Do you idjits know that HP laid off more workers last month than all the gas and oil extraction jobs created in the last 2 years?"...
Do you know you have nothing credible to back up that statement?
According to the BLS yesterday, there are 15.1 million unemployed who want jobs and 8.1 million employed who want full-time jobs.
ReplyDeleteAlso, 1.5 million jobs are needed each year just to keep up with population growth.
...for one, as big as they are, the fossil fuel industries (FFI) don't have as far of a reach into the economy as one may think in lieu of the 28k laid off from HP. The majority of HP's business that experienced the highest layoffs wasn't the PC world, but is the commercial use of mini-computers. That part of their business generally represents longer established business that have deeper roots in the economy.
ReplyDeleteWhat's been the FFI's impact on the food industry? It's a fairly short supply chain (at least I thought it was). Thinking of it in terms of "from field to fruition."
Also, wouldn't the lower price of fuel have a positive impact on the DOA and sales within the whole federal school lunch program?
And to a point I think was materializing [Krishnan], wouldn't the nation be better off developing new industry and its new revenue sources and exploits of its technology rather than digging (or drilling) into what's pre-existing? After all isn't what's pre-existing part of the old problem, the way it's been handled, that kinda helped get us where we are? Why wouldn't our nation want to develop renewables anyway - it's not si-fi after all. Personally I think that all local and state governments should develop solar farms and collect a check from power producers for what's contributed back to the grid. Small towns could really benefit.
John Lambert says: Why wouldn't our nation want to develop renewables anyway...I think that all local and state governments should develop solar farms and collect a check from power producers for what's contributed back to the grid."
ReplyDeleteBecause it's too expensive, and taxpayers-consumers will pay government too much, one way or another.
"Why wouldn't our nation want to develop renewables anyway - it's not si-fi after all"...
ReplyDeleteYou're right, its not sci-fi, there's at least some small chance that some sci-fi will become reality at some point in the future and won't be needing tax dollars to float it...
But 50% of those oil and gas jobs are not going to women!!!
ReplyDeleteWe must demand that jobs for women be created so that 50% of the new jobs are women. Jobs that entail moving paper from one side of a desk to another, and gossiping about TV shows and her new hairdo.
Even after that, we must ensure policies that punish companies if these jobs only pay 77% of what men are paid (even if the women do just 10% of the work her hour).
Paul - did you read the report and what it said about new mining jobs?
ReplyDelete" Employment in other major industries, including mining
...and logging, retail trade,
information, financial activities, leisure and hospitality, and government,
changed little in May."
did you read that part?
"Also, wouldn't the lower price of fuel have a positive impact on the DOA and sales within the whole federal school lunch program?"...
ReplyDeleteGot a better idea, let's dump the federal school lunch program and make the parents responsible for feeding their own kids...
"And to a point I think was materializing [Krishnan], wouldn't the nation be better off developing new industry and its new revenue sources and exploits of its technology rather than digging (or drilling) into what's pre-existing? After all isn't what's pre-existing part of the old problem, the way it's been handled, that kinda helped get us where we are"...
Well consider the recent track record in that scam...
Obama's sterling track record with renewables
For those who only hear about these failing companies one by one, the following is a list of all the clean energy companies supported by President Obama’s stimulus that are now failing or have filed for bankruptcy...
Evergreen Solar
SpectraWatt
Solyndra (received $535 million)
Beacon Power (received $43 million)
AES’ subsidiary Eastern Energy
Nevada Geothermal (received $98.5 million)
SunPower (received $1.5 billion)
First Solar (received $1.46 billion)
Babcock & Brown (an Australian company which received $178 million)
Ener1 (subsidiary EnerDel received $118.5 million)
Amonix (received 5.9 million)
The National Renewable Energy Lab
Fisker Automotive
Abound Solar (received $400 million)
Chevy Volt (taxpayers basically own GM)
Solar Trust of America
A123 Systems (received $279 million)
Willard & Kelsey Solar Group (received $6 million)
Johnson Controls (received $299 million)
Schneider Electric (received $86 million)
"Clean energy companies...that are now failing or have filed for bankruptcy."
ReplyDeleteIt must be those oil speculators fault.
" Over the last 12 months, oil and gas companies have added 21,800 new workers"
ReplyDeletethat's an average of about 1800 jobs a month.
depending on whose opinion you read/believe - a "keep up" number of jobs is about 100,000 per month.
but something must be wrong with the jobs report because we keep hearing about all these new jobs being created in ND and Eagle Ford that are not showing up on the BLS report.
one table actual shows -.01% for gas and oil extraction.
http://www.bls.gov/news.release/empsit.t17.htm
so what gives between this report and all the news and blog reports of an oil and gas "boom"?
Perhaps the BLS data is not that accurate? (seems like I've heard complaints about BLS data before in CD..... eh? )
sounds like the jobs report might actually be UNDER COUNTING gas and oil jobs?
"It must be those oil speculators fault"...
ReplyDeleteIt's Bush's fault pt...
so what gives between this report and all the news and blog reports of an oil and gas "boom"?
ReplyDeleteThis report is detailing the jobs created/lost from April to May. What Dr. Perry is blogging on is the jobs created since 2007.
You are right that it averages to be about 1,800 jobs a month. But that is just an average. Some months perform better than the average, some don't.
Example: let's say you have a baseball batter who gets one hit for every three at-bats (a batting average of .333). In one game, he doesn't get a hit at all (his average for that game is .000). Does that mean his overall batting average is miscounted or incorrect? Nope. Statistical anomaly. That's what we got here.
In the scenario of the batter, were there any hanging chads involved... Only kidding.
ReplyDeleteThe problem seems more to be where ideas generate or whom gets or takes credit rather than ideas standing on their own merit. As for renewables, it's a bad idea as long as its a democrat that backs it. When, I suppose should Romney endorse renewables, maybe it'll be a good thing then. At any rate we're going to need new revenues in the Energy department.
I work in an alternative education school, the last resort for many children to receive an education. These kids are largely indigent and neither they nor their families can afford the cost of school lunches. Therefore I advocate on their behalf for free lunches, at no cost to any of them. We can do this, this is what we need new revenue sources for. I'm without regard for anyone who disregards the poor.
A recent study found that for every one new job added in oil and gas extraction activities, there were three new additional jobs created elsewhere in the economy. The report also found that "the jobs-multiplier effect of U.S. oil and natural gas activity is higher than many other U.S. industries, including the financial, telecommunications, software and non-residential construction sectors. This is the result of the energy industry’s long supply chains and relatively high levels of spending by employees and suppliers." As a result of the multiplier effect, the U.S. economy has potentially been adding almost 400 new jobs per day over the last year due to increased oil and gas production.
ReplyDeleteHere is the big problem. We already know that shale gas is a huge loser that has killed off the profit even in the conventional gas sector. A sector that keeps depending on debt to stay in business will not last very long. This means that the shale gas jobs and those that depend on them directly are in jeopardy.
Because of what I stated above we have seen the shale companies try to move from being about shale gas to being about 'shale liquids.' But there is absolutely no evidence that the shale companies can withstand the effects of an economic contraction or that they can make a profit from the average formation at anywhere close to this price level. This puts the shale oil jobs at risk too.
And let us not forget what the shale gas industry has managed to do to coal via the regulatory route. The EPA is making it impossible to increase coal based electricity generation capacity. This means that higher electricity prices will be inevitable, just as they were in the EU when it took a similar route.
"We already know that shale gas is a huge loser that has killed off the profit blah, blah, blah"...
ReplyDeleteWho's we?
You got a mouse in your pocket?
" This report is detailing the jobs created/lost from April to May."
ReplyDeleteWell it shows from May 2011 also... and the 20K jobs created are consistent with what Prof. Perry has stated i.e. 21,800 jobs.
It's not chump change... for sure but as a portion of the total economy ....existing and needed, it's not so much.
and not likely to be the only reason that we'd be able to emerge from the current morass....
It kind of puts the oil/gas job creation in a larger context....
what I did not see (and possibly missed) was how many new oil/gas jobs created since 2007.
Who's we?
ReplyDeleteYou got a mouse in your pocket?
Anyone who has looked at 10-K statements from the shale gas producers or listened to the conference calls. You can't make money by selling for $3 what costs you $8 to produce. Even a permanent optimist like Mark should be able to figure that one out.
"Anyone who has looked at 10-K statements from the shale gas producers or listened to the conference calls. You can't make money by selling for $3 what costs you $8 to produce"...
ReplyDeleteWell if that's the case you could be making fortune selling contrarian advice...
Well if that's the case you could be making fortune selling contrarian advice...
ReplyDeleteI find that no matter how great the advice volatility renders it useless for those that do not fully understand the issue. Because they lack the knowledge they panic and sell when they should be buying and buy when they should be selling.
"Because they lack the knowledge they panic......
ReplyDeleteHmmm, yeah I guess you got pretty good point there vangeIV...
juandos: "Got a better idea, let's dump the federal school lunch program and make the parents responsible for feeding their own kids..."
ReplyDeleteGot a better idea, let's dump the federal school ----- program.
(overstrike would be so handy in this comment section)
This is at least partly a "jobless recovery" because HR people currently acting as flappers for all the jobs are incompetent imbeciles.
ReplyDeleteWhen you see a job "opportunity" seeking a one-eyed lefthanded Pulitzer Prize winning twin with experience in Elephant Training, Professional Water Polo, and Numerical Business Analysis using J.Random Company's OddballPro MBAtools....
THEY ACTUALLY ARE LOOKING FOR *exactly* THAT.
There will be no "almost matches", these nitwit morons actually are looking for only those people matching exactly and precisely those ridiculous specifications.
I have this on pretty much direct authority from a recruiter regarding an IT job I could rather blatantly do (obviously with slightly less absurd qualifications), but would not be considered since I didn't have experience with the EXACT SAME tool the company used -- I have experience with several others that do the exact same thing, but that's NOT acceptable to these pinheads.
She indicated that it wasn't just "this job" but all jobs -- she was a veteran HR person and said that, while, in the past, the HR people would look at a resume and use it to determine if the person was capable of the job and how well they communicated, nowadays they are doing word searches for the terms and if you don't match most of the terms you don't get considered. They no longer (her words) look for "can do" -- only "have done".
This clearly makes the job pool of available candidates insanely smaller than it rationally has any business in being.
"Got a better idea, let's dump the federal school ----- program"...
ReplyDeleteNow that's an idea I can support also ron h...
Still the Kenyan Kommie Klown wants even more federal largesse as this video shows: Obama's Latest Bailout Plan Summarized In 4 Words: "3000 Bucks For Thingamajigs".
"3000 Bucks For Thingamajigs"
ReplyDeleteOr, I'll give you $3000 of other peoples money if you vote for me.
He doesn't do well without that teleprompter, does he.
If the Obama has been so "unfriendly" to the oil industry why is the production rate of oil in the USA now at a 14 year high??
ReplyDeleteCrude production from US sources is at least 20% higher than the average rate during the entire Bush II administration which publically bragged about how oil-friendly it was.
If the Obama has been so "unfriendly" to the oil industry why is the production rate of oil in the USA now at a 14 year high??
ReplyDeleteThank SEC rule changes a long time ago and lousy accounting that allows producers to hide losses by assuming high EURs. Clinton wasn't particularly kind to dot coms but they proliferated because so much money flowed into them thanks to promoters hyping the NEW THING and investor greed driving reckless behaviour. But in the end reality will prevail. Tight oil from shale formations is not economic except in the core areas. Eventually investors in shale will have the same experiences as investors in dot coms or housing stocks.
Crude production from US sources is at least 20% higher than the average rate during the entire Bush II administration which publically bragged about how oil-friendly it was.
So? The leases were sold by the Bush Administration, not Obama. And most of the money was raised and plans were made before Obama was elected.
This clearly makes the job pool of available candidates insanely smaller than it rationally has any business in being.
ReplyDeleteThe pool is smaller because many people do not have what it takes. A lot of the jobs are actually not hard to learn and the companies are very lenient and patient in developing new employees who will wind up as contributors after a few full cycles.
The problem are those people who expect something for nothing and want to be babied when doing jobs that, although easy to do, are physically and mentally demanding. For $75K per year the companies want a guy who will work hard, not do anything stupid, and pay attention to detail. Sadly, there are few such people who apply.
Ed R: "If the Obama has been so "unfriendly" to the oil industry why is the production rate of oil in the USA now at a 14 year high??"
ReplyDeleteIn addition to the above, keep in mind that most of the activity has occurred on private and state land, not subject Obama policy.
ReplyDeleteIn addition to the above, keep in mind that most of the activity has occurred on private and state land, not subject Obama policy.
True, but you did have some drilling on federal land. Unfortunately for the Obama promoters most of the leases were auctioned off under Bush's watch.