To create jobs, develop U.S. energy resources

David Holt President, Consumer Energy Alliance
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In the coming days, President Obama is expected to unveil another plan to create jobs, spur economic growth and revive our stagnant economy. This is critical, as the nation’s unemployment rate continues to hover above 9.0% and nearly 14 million Americans are out of work. Those caught in this economic malaise need help and they need it now.

Fortunately, job creation is easier to achieve than the president might think. Just ask North Dakota. Thanks to the state’s efforts to safely develop its natural resources, North Dakota has the lowest unemployment rate in the nation — an enviable 3.3%. Its employers are actually struggling to fill job openings. Realizing gains like this on a national level, however, will require a meaningful commitment from the federal government to develop our nation’s vast energy supplies. Doing so would create a significant number of jobs and substantial government revenue and economic growth, benefiting all Americans at little to no cost to the federal government.

A recent IHS-CERA study from the Gulf Economic Survival Team (GEST) entitled “Restarting the ‘Engine’: Securing American Jobs, Investment, and Energy Security” found that resuming oil and gas production in the Gulf of Mexico would be a good first step. The study found 230,000 jobs could be created in 2012 with an additional 199,000 jobs created in 2013 just by returning to production levels that existed before last year’s blowout incident. Keep in mind that these numbers are only based on increased production in the Gulf and don’t account for the additional 20,000 jobs that could be realized by increasing output from the Keystone Pipeline or the additional jobs the Trans-Alaska pipeline could support if its full capacity of 2.2 million barrels per day were realized (regulatory hurdles have kept Alaska offshore development locked down and reduced the pipeline’s flow to 600,000 barrels per day).

These jobs would benefit all states and would not be confined to areas where energy exploration and development is occurring. In fact, the GEST study found that some of the hardest-hit states would be among the biggest beneficiaries of increased energy production, as one-third of the new jobs would be created outside of the Gulf. For example, California, which has the second-highest unemployment rate in the nation, would gain over 20,000 jobs. Florida, which has the sixth-worst jobless rate, would gain over 10,000 jobs.

Developing our energy resources would also provide significant revenues for governments at all levels. The GEST study estimates that royalty payments from increased production could exceed $12 billion in 2012. To put this in context, that’s enough revenue to fully fund both the Department of Labor and the Department of the Interior for an entire year. With the federal government struggling to rein in its deficit and states facing their most significant financial challenges since the Great Depression, this revenue is needed now more than ever.

Further, fully developing our energy resources would spur investment in our economy. The GEST study indicates that increasing our domestic production would add more than $71 billion to the nation’s gross domestic product over the next two years — a staggering sum. Of that, $44 billion would be available as early as 2012, providing an immediate boost to a flat-lining economy that is teetering on the verge of recession.

As millions of unemployed Americans will tell you, we can no longer wait for these opportunities. A May 2011 Gallup poll showed that 60% of Americans support increased offshore production activities.

If the president is serious about job creation, any policy he presents should include increasing domestic energy production to meet our national capacity. Hundreds of thousands of new jobs would be created if the federal government simply allowed American energy companies to do what they do best: produce energy.

A CNBC headline this week read: “Unemployed? Go to North Dakota.” Imagine if we tried North Dakota’s policies at the national level.

David Holt is the president of Consumer Energy Alliance.