Oil Industry Report Outlines How to Create Temporary Jobs While Permanently Destroying the Climate

Oil production has soared under Obama.  But Big Oil and its allies in Congress say Obama “has hardly missed any opportunity to block, impede, delay, hinder or obstruct American energy production.”  What must he do to win their love, since that seems to be his goal?

The American Petroleum Institute released a report this morning outlining how the U.S. could create over one million jobs in the next decade through increased domestic drilling and use of tar sands. The solution? Open up every possible pocket of American soil and waters to drilling rigs — turning “drill, baby drill” into “drill, baby, drill, ’till there’s nothin’ left to drill.”

The report outlines aggressive oil and gas drilling scenarios for the Outer Continental Shelf, the Gulf of Mexico, onshore and offshore in the Arctic, and on various other public lands around the U.S., as well as development of the Keystone XL pipeline — all measures that would supposedly increase oil and production by nearly 50% compared with our current path (which is already set to raise production substantially) and increase tar sands production by 280%.

In other words, jobs creation through more climate destruction.  And they are all temporary jobs, since they aren’t sustainable.  We will be getting off of oil in the coming decades if we’re going to avoid catastrophic climate change.

“All [Obama] has to do is say the word,” said API President Jack Girard, in a challenge to the president at an event to promote the report. The study comes out a day before Obama is set to give a speech about job creation to Congress.

Doc Hastings, a Republican from Washington State who serves as Chair of the House Natural Resources Committee — one of the oil industry’s most stalwart advocates — used the release of this morning’s report to spread the myth that Obama is anti-drilling in order to make the case for the industry to drill anywhere it can fit a rig:

The Obama Administration has hardly missed any opportunity to block, impede, delay, hinder or obstruct American energy production. Instead of moving our country forward, President Obama has moved 180 degrees in the opposite direction. Now I don’t say that lightly. It’s not 45 degrees, it’s not 90 degrees, it’s 180 degrees from my perspective.

Along with blocking, impeding, delaying, hindering, obstructing and turning a full 180 degrees, Hastings (who took $85,000 in campaign contributions from oil and gas companies last election cycle) also talked about the President “misleading” Americans on fossil energy production.

But this data on domestic oil production from the Energy Information Administration doesn’t show a 180 degree turn, much less a 45 degree pivot. It’s more like a full-court press on oil production [see picture above]

And more data released from the EIA shows a similar picture. Oil companies in the U.S. are deploying more drilling rigs than anytime since the mid-1980’s.

It’s actually the first time since 1987 that over 1,000 drilling rigs were deployed in the U.S. Why? Because of the higher cost of oil due to increased global demand — companies have the economic incentive to drill for more places around the country. As a result, production has increased substantially.

“The evidence is not there that the Obama Administration is in a war against the industry. I don’t think you give Obama credit for creating all this production, but he certainly isn’t killing the industry. You also don’t give the Bush Administration that credit. Production is up primarily because of technology and high oil prices,” explained Michael Levi of the Council on Foreign Relations to Climate Progress.

Even though Obama probably doesn’t get the credit, the Administration is still working through permits for new drilling. In 2010, the BLM processed 5,000 drilling permit applications; in 2011 that number is projected to be 7,200.

No matter what he does, Obama will get attacked for not doing enough to support oil and gas. The question is, if he opened up new, environmentally-sensitive areas to drilling in the name of jobs, would it have the major economic impact that the industry suggests?

  • An Energy Information Analysis issued an analysis in 2009 that compared opening the entire Outer Continental Shelf to drilling with a more restricted approach. It found that by 2030, gasoline would only be 3 cents cheaper under an open-drilling scenario.
  • Fishing jobs could be put a risk by drilling. The API Report cites a possible creation of 100,000 drilling jobs in Florida as part of its broader suite of job creation numbers. Yet Floridians have consistently opposed opening new areas to drilling because of the impact it would have on tourism. A 2006 report from the National Ocean Economics Program cites 361,000 Tourism & Recreation jobs in Florida (261,000 direct, and 100,000 indirect and induced), plus about 9,000 commercial fishing jobs, all of which would be put at risk by drilling.  Tourism, recreation, and fishing contributed $18.9 billion to Florida’s GDP in 2005. Other reports have pegged Florida’s tourism industry as supporting more than a million jobs.
  • Spills and other disasters are inevitable and will cost money to clean up and impact the local economy. After the BP Horizon disaster, Gulf coast fishermen experienced nearly a 40% drop in landings, and to date, BP has paid out more than $5.5 billion in claims.
  • The report assumes that “slow walking” in the Gulf continues, but the Administration has been issuing offshore leases and is about to issue more. According to BOEMRE, 68 new shallow water permits have been issued since June 2010.  Permits have averaged more than 7 per month since fall 2010, about equal to 2009. 112 permits for 34 deepwater wells requiring subsea containment have been approved.  And last month the administration announced a massive sale of offshore leases in the Gulf of Mexico, and approved initial permits for Royal Dutch Shell to commence exploratory drilling in the Arctic — an area where there is no infrastructure for clean-up.
  • The sheer expanse of U.S. drilling has some companies worried about recruiting employees.  As Headwaters Economics stated, “It is not clear how this already booming industry could add an additional million jobs.  In fact, drilling is increasing at such a fast pace that there now is the prospect of a shortage of skilled labor and machinery.”  The Wall Street Journal quoted Schlumberger Chief Executive Andrew Gould saying, “The ability to provide both North American and international markets with required people in a continued growth phase will be a challenge”
  • U.S. federal lands actually have very few proven oil reserves.  The U.S. has 5.3 billion barrels of proved oil reserves on federal land. That is what the U.S. consumes in just 15 months.
  • The oil and gas industry are letting millions of leased acres sit idle. Around 41 million acres of public lands are under lease to the oil and gas industry, yet just 12 million are producing. So the industry has 29 million acres that it has leased but not yet developed.  According to a recent report issued by the Interior Department, “more than 70 percent of the tens of millions of offshore acres under lease are inactive, neither producing nor currently subject to approved or pending exploration or development plans.”
  • Much more acreage is under lease to drill than is protected.  Around 42% of the intermountain west is already leased to oil and gas, while only 1% is off limits.
  • Increased drilling won’t lead to energy independence.  For a country that consumes approximately 22% of the world’s oil but has only a fraction of the world’s proven oil reserves, no matter how much of our oceans we open to offshore drilling, it will never be enough.  In 2009, the EIA estimated that even if the Pacific and Atlantic coasts and the eastern Gulf of Mexico were all opened up to drilling, the U.S. would still be importing 41% of the oil we use in 2030.

Perhaps this is why Wood Mckenzie, a reputable organization, includes a careful disclaimer in the footnotes of its study.  The opinions in the report “have been arrived at following careful consideration and enquiry consistent with standard industry practices but we do not guarantee their fairness, completeness or accuracy.”

Michael Conathan and Jessica Goad of the Center for American Progress contributed to this report.

10 Responses to Oil Industry Report Outlines How to Create Temporary Jobs While Permanently Destroying the Climate

  1. prokaryotes says:

    Insiders Warn “Shale Plays are Just Giant Ponzi Schemes” in Bombshell-Laden NY Times Piece on Natural Gas, Fracking

    US Slashes Estimate of Recoverable Gas in Marcellus Shale by 80%

    Shale gas ‘worse than coal’ for climate

  2. We feel increased drilling, and therefore increased dependence on oil, fails to provide a realistic path towards energy independence. Instead, solar, wind, OTEC, and other renewable energies will help pave the way. Join the discussion about OTEC and the power of renewable energy at The On Project:

  3. David B. Benson says:

    Don’t see why Doc Hastings needs any campaign $$; nobody serious is going to run against him (again).

  4. Shaheer says:

    Here’s how we can create more jobs:

    -Increase incarceration rate.
    -Build more jails.
    -Start another drug war.
    -Reduce automation in mining.
    -Put more laborers underground.
    -Increase the size of the police force.
    -Start foreign wars.
    -Start a world war
    -Increase climate catastrophes so we need to rebuild all the time

  5. Mulga Mumblebrain says:

    Doc Hastings illustrates a brutal truth of politics in capitalist polities, the Anglosphere in particular. That is that the Right have simply given up speaking rationally or even bothering to make their utterances even a distant approximation to the truth. Just say anything you like, and the journalist/stenographers will simply swallow it all, then regurgitate it without criticism. For some reason, connected to ideological correctness I’d say, there is no longer any penalty for the most ludicrously mendacious statements. Oh for the day when the truly Big Lies are met with derision and rebuttal. Some chance! A society built on ever more grotesque mountains of bull-dust is in pretty bad shape.

  6. NJP1 says:

    The race for oil is symptomatic of the situation we’re in. Oil put 7 billion people on a planet that has the resources to support 2 billion at most without it, probably far less. Global food supply is now 99% oil dependent. We deluded ourselves that oil production was GDP, and oil use was growth. That is all our ‘economy’ has been. ‘Jobs” have been entirely dependent on oil burning: the faster we burned it, the more jobs were created. That formula can be applied to any production line you care to name, so yes, it might be possible to create a million jobs through a frenzy of oil drilling and use, but they will be jobs dedicated once again to oil burning; they will have no other basis in reality. They will stop when the oil stops.
    drilling will go on because without oil we face starvation; eventually we will reach parity: when the energy expended to get each barrel of oil is the same as what we get from it. And even at that point, politicians will still cling on to their jobs, insisting that there’s more oil available somewhere..anywhere because our illusion of prosperity is based on infinite consumption of a finite resource. We just have to drill more and pray more. it will take a while to sink in, that the oil era really is over.
    One could say that we are there now, world wide unrest might carry an image of political or religious dogma, but the underlying causes are about unemployment and escalating food prices, both linked to the rising cost of oil. Nobody riots if they have a job, a secure home and a full stomach. 40 million Americans on food aid, 10% unemployment and a growing homelessness problem might serve as a warning about what will happen when there just isn’t enough oil to keep everyone alive.

  7. Roger Blanchard says:

    One sentence in the article states that oil production is up substantially in the U.S. For the first 3 month of 2011, U.S. crude + condensate production was up 1.99% relative to the first 3 months of 2010 based upon US DOE/EIA data. Is that substantial?

    The U.S. production increase in the last few years has been due to increases in the deepwater Gulf of Mexico (GOM), Bakken Shale region on North Dakota and Texas.

    Through the first 4 months of 2011, GOM oil production is off ~164,000 b/d relative to the first 4 months of 2010. Since most of the oil production in the GOM is from the deepwater, deepwater GOM production is declining rapidly. I see continuing declines through the year.

    Compared to the last quarter of 2010, North Dakota’s oil production is down 0.79% through the first 4 months of 2011 so it appears like the large increases from the Bakken Shale region of the last few years may not continue.

    Texas’ oil production is up only 0.38% in the first 4 months of 2011 relative to the last quarter of 2010 so increased production due to fracking down there may have pretty much reached a limit.

    The gist of all this is that I would not be at all surprised if U.S. oil production in the second half of 2011 is lower than that of the second half of 2010. Actually I expect it.

    Roger Blanchard
    Sault Ste. Marie, MI

  8. Solar Jim says:

    “All [Obama] has to do is say the word,” said API President Jack Girard . . . and the military-industrial complex (which is pathologically addicted to burning extracted, fossil carbon materials financed by monetizing of minerals), will send the climate crashing through Abrupt Climate Cataclysm. Hallelujah to Kingdom come.

    Should Jesus (or some other deity) say the word, or Obama say The Word.

  9. Ric Merritt says:

    Over several years, this blog has, I would say, become a bit more aware of where the world is, and is going, in oil production. However, a sentence in this post is dangerously misleading:

    “We will be getting off of oil in the coming decades if we’re going to avoid catastrophic climate change.”

    That’s silly. We will be getting off of oil in the coming decades no matter what, no matter who is elected, no matter what happens in politics and technology. There isn’t enough oil accessible with reasonable effort and expense to keep up.

    This kind of thoughtlessness garbles the message.

  10. Mulga Mumblebrain says:

    Roger I do appreciate your factual and concise contributions. The amount of verbiage, ill-informed or misleading, surrounding oil production and reserves is quite daunting to engage with. It appears that the oil industry believes that the truth is so vital that it must be carefully guarded by a phalanx of lies, if I may torture Churchill’s observation.