Exxon Touts Surefire Plan to Stimulate Economy: Drilling Creates Jobs

Alaskan North Slope
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WASHINGTON (THE WALL STREET JOURNAL BLOG via Dow Jones Newswires), Feb. 5, 2009

Washington D.C. is full of talk about how to stimulate the economy -- insulate houses, drop mortgage rates, build infrastructure. Exxon Mobil Corp. has its own plan: Let us drill.

With jumbo-sized bundles of pink slips being dropped by corporations daily, it might not be a bad political strategy. The company used this approach last month to resolve a long-standing dispute with Alaska over the fate of the giant Point Thomson oil-and-gas field.

The big state and the big company have been at loggerheads over Point Thomson, one of the largest undeveloped fields in the U.S. for years. Last year, a few months before she became the Republican vice presidential nominee, Gov. Sarah Palin attempted to revoke Exxon's license to develop the field because they were moving too slowly. Exxon is ready to move quickly now, arguing at a recent administrative hearing that it could begin drilling before the end of winter, if the state gave it a license to build an ice road to move in a drilling rig the size of the Statue of Liberty. Late last month, the state complied, Palin's recent green conversion apparently notwithstanding.

What was the winning argument? Essentially, Exxon promised to move quickly this time, generating jobs, investment and ultimately revenue from oil and gas production. Exxon's first witness, Alaska production manager Craig Haymes, dove right into the job creation angle at the beginning of his testimony.

"Over the last year we've spent over $120 million to prepare for drilling. That $120 million has been spent through over 50 Alaskan companies and as I mentioned we've had over 150 people working on the project We will be spending over $200 million a year and that's based on 2008 dollars. With escalation inflation it will obviously be higher than that. And we'll have over 400 jobs per year involved with this project. We're already over 150, if we can commence drilling in six weeks we'll be over 200 and we'll continue to ramp up from there."

Note that Haymes is talking about creating jobs in the next few weeks. Critics of President Barack Obama's green jobs push contend it will take months or years to materialize, potentially too late to be much help in the current recession.

This oil-development-as-economic-development argument has long been successful in Alaska, a state that needs a steady supply of oil and oil jobs to keep the wheels from falling off. But is the company willing to trot out the same argument in the Lower 48, now that the wheels appear to be falling off also?

It seems so. Kenneth Cohen, Exxon's vice president in charge of public affairs and lobbying, made a similar argument late last month on a telephone call with reporters. Citing a recent study by the American Petroleum Institute, he said opening up new areas to drilling offshore, in Alaska and the Rockies "could create as many as 160,000 new jobs and generate about $1.7 trillion in federal, state and local government revenues to fund critical government priorities." The API also has a television ad that says increased oil and gas production will "create well-paying jobs" as well as help pay for schools, libraries and the police.

While Washington politicians are focused on creating green jobs, Exxon is raising the question: What generates more jobs more quickly? The new green economy? Or the old-fashioned oil industry?

Still, given Interior Secretary Ken Salazar's recent decision to spike leases on 130,000 acres in Utah, it seems that Exxon's strategy has an uphill climb.  

Copyright (c) 2009 Dow Jones & Company, Inc.


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Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Andrea | Mar. 19, 2009
My husband is a pulling unit operator in Kansas, and there are people losing jobs all around us. I feel that they need to go forward with U.S. oil and quit worrying about the green jobs so much. The more the U.S. can generate oil, the less we have to get from over seas, so I don't understand what the big question is. It seems more then obvious to me.

Bob Meek | Feb. 20, 2009
ExxonMobil has developed a great plan -- they have the resources to make it happen -- give them the opportunity to let it happen -- its the American way!!! JUST DO IT!!!

Tony Ackerman | Feb. 16, 2009
It's not rocket science to understand the needs of our country for energy independence, and it's not rocket science to see that our reserves of fossil fuels (oil, gas, coal) would get us out of the dependency mess overseas and put a lot of our people to work stateside.

What is rocket science is trying to get people in D.C. to understand these simple facts. Once the discussion enters the political arena, leave common sense and logic outside the room.

I guess energy comes from the gas pump and the wall socket, just like food comes from the grocery store. Don't expect them to look any further than that.

Les Leonard | Feb. 9, 2009
I couldn't agree more: Drill Baby Drill. The sooner we can find oil and gas, the sooner we can develop the fields and bring them on line. I am now retired; I've worked in the oil industry for over forty years. I've complete faith in the companies to do the job right and safe.

Richard Rieman | Feb. 9, 2009
I was preaching the same sermon in Western Wyoming for years. The BLM would shut down drilling in the winter because of the wildlife, and year round jobs were scarce in the area as a result. It was an uphill fight for me alone, and Exxon will have an uphill fight as well, but they may be able to get the word out better than I could. They should expect to be called vile things if they take on the fight, but if they stick it out they may succeed.

Richard | Feb. 9, 2009
I agree with Exxon. We need this to happen in Canada as well.

Alan Taylor | Feb. 8, 2009
We need to be "turnin to the right"!

Joseph Delphin | Feb. 7, 2009
According to T Boone Pickens, the greatest transfer of wealth is taking place as we speak. I'm a retired oil man, and I can tell you there is no other business on earth that can generate higher paying jobs than the oil business in very short order. Don't see no oil company with their hand out for govt bailouts. If business environment is not good, they move there "know how" to another country. Which happened when congress enacted the "windfall profit act". In addition they will pay the state and fed royalty in billions of bucks. California is in hell bind with state debts and the fools don't want to drill offshore. God bless them cause its gonna get worse.

Jeff Moralez | Feb. 7, 2009
Great Idea! My partners and I just bought a drilling rig here in Texas and love hearing this type of upbeat news. I doubt the US will ever be independent of foreign oil, at least not in my lifetime; however aggressive E and P would be a boom for many states and people thereof. Trying to become energy independent would benefit all. As Mr. Abshire mentioned above, environmental protection is critical, and we can develop our reserves with minimal environmental impact. Making the tree huggers believe is another story.

Greg | Feb. 7, 2009
I have worked in the oil industry now for over 30 years, I have heard it all and seen a lot of it. It is time for America to quit their whining about the lack of jobs when there are solutions staring them square in the face. The oil reservoirs in Alaska and off the coast of California address both the need for domestic oil and jobs. We now have the technology and expertise to not only make this safe, but environmentally friendly. Making those excuses do not wash any longer. Oil IS a natural resource , easier to remove from deep reservoirs than ever, why not use it to fuel our economy instead of buying foreign oil and going further in the hole. I could be laid off at any time now from an industry that has fed my family for over 30 years. And what bothers me the most is it don't have to happen.

J.Glenn Pitre | Feb. 6, 2009
Drill, Drill, Drill, and Drill More

Barry Goorachan | Feb. 6, 2009
I support environmental causes but often disagree with some of these extremist green folks. They use their ideology [often based on unproven models and theories] like a millstone around their necks, and because they have grown so vocal, somehow the millstone winds up around the necks of everyone else too. Exxon has to be commended for such a pragmatic move. The fact is that the supposed armchair green ideologists will sooner or later have to come down from their ivory towers, before these towers collapse with their weight.

Bill Farmer | Feb. 6, 2009
Get that bit in the ground

Bryan Matthew | Feb. 6, 2009
I think the government should regulate and enforce the construction of oil fields and remember to allow the jobs to happen. We are in the transition stage, not the green age, or old age of keep it on site, dump it anywhere, just keep it simple, without construction we fail as leaders to grow the economy and/or world markets.

Kevin Kelley | Feb. 6, 2009
Moving forward with new drilling projects will put people to work at once. We need new jobs today not tomorrow.

Christopher Bailey | Feb. 6, 2009
This is something all of us in the oil industry have known for some time. What the good people that oppose drilling do not understand is that if you cancel drilling then the unemployment rate will skyrocket. If they think the economy is bad now wait until that happens. The good thing about the oil industry is that you do not have to have a college education to make a living. All you have to have is the will to succeed, and it is out there for all who want it. The oil industry does not discriminate in any way.

Dan Robinson | Feb. 6, 2009
Same old argument every time, oil companies and its workers make too much money and the city people don't get any. Where is the help now for the oilfield workers? Politicians always seem to help out the unions but forget about the average guy doing all the hard work out in the oil field, generating money for all levels of government, keeping the local economies thriving and people working. I'm from Alberta,look at what the provincial government has done, drove the oil companies out. Now the money's drying up and the economy is tanking, now where do they look for money? The oil field.

Roy Hamous | Feb. 6, 2009
The only way out of this mess is Drill Baby Drill.

Syed Ali Raza | Feb. 6, 2009
Well, Exxon Mobil definitely makes sense. Compared to green jobs that can take years, these ones are quicker and will bring money as well.

Scott | Feb. 6, 2009
I've been in the oil field for 25 years. And I agree with Exxon on this. The politicians want to get away from foreign oil. But right now we are headed back that way. With oil at $40 or less a barrel, it's getting to the point again where it is cheaper to import than drill for it. Then we will be right back where we were in the late 70s and early 80s.

Robert W. | Feb. 6, 2009
I have been in the oil field for over 38 years. It has become more of a hobby than a job. That is I enjoy what I do. It really scares me when politicians have the sayso of where we drill. I have no problem with the green movement, but until they come up with something green that will move a tractor trailer and a train of locomotives, then we will need oil to produce diesel from. The technology is there to drill environmentally safe wells. So as RGM says let's Drill Baby Drill. My ability to support my family depends on it! If congress puts a windfall tax on the oil companies, they won't have money to hold them over during these low spots.

Joseph E. Abshire Jr. | Feb. 6, 2009
I'm an oilfield worker and believe that America needs America's oil to cut foreign dependencies. I also believe that we need to protect our environment too. I believe that an oil company can drill and protect our environment. The oilfield employs a lot of people and has a large number of great paying jobs.It effects a large piece of the economy and is a must to get the economy moving in the right direction.

Alan Brown | Feb. 6, 2009
Opening up new areas for exploration would definitely be a positive move for the industry and the North American economies. There is no question about it, allow us to utilize our natural resources and it will stimulate the economy. More jobs in the industry as well as more jobs in the regulatory agencies will be the main result of exploration of promising areas of interest. Alaska, the Rockies and our offshore domains must grow if we are expected to become self sufficient in the production and use of hydrocarbons. The demand is there, we have to be prepared and willing to meet it at full force.

Dave Farmer | Feb. 5, 2009
Do it the old fashion way and put the bit to work and keep the politicians out of it. North America needs energy self sufficiency and what a better way to get it done.

R. Harless | Feb. 5, 2009
A company like Exxon makes me proud that I have spent my life in the oil & gas industry. They are old school oilfield just like me. No wonder they are so successful.

James B Cheek | Feb. 5, 2009
I have been a rig manager in central ARK. for about three years & it's amazing to see the growth & expansion of small start up companies. EXXON need not be the only one touting this proposal to the government. We all need to be supporting this idea.

RGM | Feb. 5, 2009
Drill Baby Drill!

I've made my living in the oil patch, and I've always been able to provide well for my family during my time working in the drilling industry.

And yes, it will provide many with jobs, good paying jobs and get them off unemployment.....

My 2 cents!

Weldon | Feb. 5, 2009
What better. Were going to burn oil for a long time no matter how successful the green movement is. Why not produce it here instead of buying it from overseas.

Jason Jensen | Feb. 5, 2009
I own an oilfield trucking company in Utah and can't believe the ideas of locking up public land from exploration. I myself will be scared to see what the tax burden will become for the average person in Utah if we do not use the money from exploration to help finance the state.

Cheri | Feb. 5, 2009
This is the best news yet! ExxonMobil is brilliant!

Rod Ellis | Feb. 5, 2009
Exxon's plan make more sense than raising tax dollars to fund new government projects and giveaways. The people in this country are getting sick of government interference, and there is more talk about another tea party.

Al | Feb. 5, 2009
Whether you like Exxon or not, it makes sense.

Dave Freeburg | Feb. 5, 2009
The idea is sound, but you forget who you are dealing with -- a bunch of "green" liberal idiots! Like you said, it's an uphill battle, but you forgot to mention the roadside IEDs!

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