Energy Industry Fueling Job Growth, Cutting Unemployment

This opinion piece presents the opinions of the author.
It does not necessarily reflect the views of Rigzone.

If you want to talk about job growth, reducing unemployment in this country, and providing the next generation with a stable foundation of career choices that pay more than the average, you need look no further than the energy industry.

North Dakota boasts the lowest unemployment rate in the nation. Texas is outpacing the United States as a whole in job growth. Pennsylvania added 1,300 manufacturing jobs in March alone. In 2000, the population of Midland, Texas was about 95,000.  City leaders expect it to jump to 200,000 in the next 15 years.

What do these places have in common besides enviable job numbers and increasing household incomes? Oil and natural gas exploration.

The domestic energy boom is fueling a jobs boom, not just in traditional oil states like Texas and Oklahoma, but in the most unlikely places such as North Dakota, and the “Rust Belt” states of Ohio and Pennsylvania.

But if some well-meaning, but mis-informed activists get their way, all these jobs could disappear.

The stakes are high. Employment in the oil and gas sector has jumped by 40 percent since 2007. Other private-sector employment, meanwhile, has grown at a sluggish one percent since then. The rapid growth of energy jobs has contributed to a better-than-expected April jobs report and is revitalizing communities across the nation.

In states rich with natural gas and oil, new pathways to the middle class are opening up. More energy exploration means an increased demand for rig workers and welders, geologists and engineers. The average oil and gas industry worker earns nearly $97,000 yearly, more than double the average American wage.

So you would think that with everything going on, people would be flocking into the industry like the California Gold Rush.  Not just yet.

You see, thirty to forty years ago, when the original oil boom was in full swing, people went to college, got a degree in engineering, and went to work in the oilfield. Those that didn’t go to college either went to trade school or got on-the-job training in the oil patch. Many of the people at the “C” Level of energy companies now started out as roughnecks or offshore workers and worked their way up to the esteemed positions they now hold.

But now, four decades later, many of those people are near or at retirement age, and have created what has been referred to as the “graying” of the industry.

Part of the reason for this is that in the intervening years between the late 70’s oil boom and this current one, there was the technology explosion, and that’s what drew most of the technically minded kids into their college majors. They saw people like Bill Gates, Steve Jobs, and Steve Wozniak start companies in their garage and become billionaires overnight.

So as a result, there was a huge gap between the “old-timers” in the energy industry, and the “newbies” who entered the field after the tech bubble burst and oil and gas was looking pretty good again. Now, even with the influx of those recent graduates and trade school folks, the energy companies are offering extremely competitive packages, signing bonuses, travel opportunities, and many other incentives to get people to join the industry. And with the ability now to extract oil and natural gas in ways that were unthinkable just a few years ago, this current boom in the energy industry looks like it will last for a very long time.

But it’s not just the immediate oil and gas industry that’s helping the job market. The oil and gas boom is also boosting hiring in other sectors of the economy. Increased oil and gas production requires new infrastructure — resulting in jobs for construction workers and manufacturers. Oil and gas also needs to be moved to market, which requires more truck drivers and shipyard and railroad workers. Even food service and other ancillary services are required down the line as cities and towns, which once were stagnating, are revitalized by the resurgence of oil and gas.

In all, the gas and oil sector directly and indirectly supports nearly 10 million American jobs.

As I mentioned earlier, the oil and gas deposits have always been there, it just took some retooling of tried and true techniques to extract them from the ground. At the heart of this energy boom is a technique called hydraulic fracturing, or “fracking.” This process injects large volumes of water and sand (about 99.5%), and trace amounts of basically household chemicals (about 0.5%) into wells under high pressure to break apart rock and release once unreachable deposits of oil and gas.

The basic elements of fracking technology have been around for 50 years, but advances in its application have opened up vast new reserves. Fracking opponents argue that the technology uses too much scarce freshwater and could contaminate ground water sources. Both claims are false — contradicted by the research of both independent experts and the Environmental Protection Agency.

Fracking represents just 0.3 percent of all U.S. freshwater consumption. Compared to other activities we engage in every day, fracking is hardly a water hog. Car washes, golf courses, and farming all use more water than fracking.  And that car you are washing, the golf balls you are hitting, and the tractor you use to plow the fields all either use or are made of petroleum products.

What’s more, energy derived from fracking actually uses water more efficiently than other major energy sources. According to University of Texas researchers, natural gas power plants use 50 percent less water than coal-fired plants, even accounting for the water lost in fracking. And as for greenhouse gases, it doesn’t take a rocket scientist to see that coal-fired plants spew out exorbitantly more tons of CO2 (and ash) than a clean-burning natural gas power plant.

As for the claims anti-fracking activists have made about groundwater pollution, they are pure Hollywood sensationalism. Activists have circulated tales of flaming faucets and poisoned wells. Yet in the words of Lisa Jackson, the former head of the EPA: “In no case have we made a definitive determination that the fracking process has caused chemicals to enter groundwater.” Numerous state regulatory officials have reached the same conclusion.

Fracking techniques are typically employed at depths a mile or more of impenetrable rock below drinking-water supplies. As I said earlier, the fracturing fluid injected into that rock is 99.5 percent water and sand — plus a few additives like “guar,” an emulsifying agent also used in ice cream. The mix poses no danger.

The U.S. is now a net energy exporter, and the jobs boom from fracking is lifting America out of a recession and placing us firmly on the road to energy independence. The activists have their facts wrong: Fracking is a safe way to power our economy.

Parker Hallam co-founded Crude Energy, LLC in 2008 and serves as its President. Mr. Hallam co-founded Bering Exploration, Inc. (now known as Breitling Energy Corporation) and served as its Chief Operating Officer. Mr. Hallam has assisted his investors in placing projects throughout the United States. His responsibilities with Crude include developing and maintaining partner relationships, day-to-day operations and well site management. His career has given him a broad spectrum of financial and business experience in Exploration and Production, Offshore Gas Production, Oil Refining, LNG and Domestic Gas.


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