Brian Beutler of Talking Points Memo was baffled yesterday. How, he wondered, could Republicans say President Obama is throttling the oil industry’s ability to create jobs when it has created jobs at a high rate, compared to pretty much every other industry? Why, doesn’t that rapidly-climbing arrow in his chart demonstrate just the opposite?
Well, no, it doesn’t and his chart would have showed him that, if he’d looked at it a bit more closely. Let me show you the chart first.
I’m interested in the orange line, which the legend says is the percentage of change in oil and gas extraction jobs before the President took office and after. Roughly, those jobs are up 17 percent in the 38 months since the President’s inauguration, which is good. Notice, though, what happened in the 24 months preceding January 2009. Jobs in that industry also increased about 17 percent, but in a shorter length of time — the upward line is steeper.
But, Beutler might say, President Obama was hurt by the recession. In fact, he said exactly that.
This chart compares job growth in a number of industries and across the public and private sectors. Oil and gas extraction is a relatively small industry, but it has prospered in the weak economy, even as other industries climb slowly out of the great recession. Energy experts say that the oil boom itself is also due to factors outside of Obama’s control, but this gives the lie to the notion that Obama’s been actively squelching it. [Emphasis mine]
According to the National Bureau of Economic Research, the “great recession” began in December, 2007 and ended in June, 2009, a period fully captured by Beutler’s chart. Thirteen of those months fell in George Bush’s administration and five in Barack Obama’s. You can see what happened that orange line. Even in the teeth of the “great recession” the oil and gas industry continued to create jobs, at roughly a 7 percent clip. After Obama’s inauguration, jobs declined to the end of the recession, then continued to decline for another 5 months afterwards. It took another 11 months for the industry to create jobs at the clip it was creating them in the middle of the “great recession” under Barack Obama.
That certainly suggests his policies had something to do with it.
But I realize that coincidences happen, so let’s see if we can’t solidify that a bit more. Do you remember the moratorium the President slapped on deepwater drilling? That went into effect in May of 2010, right about the point at which an upward slope jogged back down sharply. In fact, job production in that sector didn’t really take off until November of 2010, when it resumed its Bush-era upward trajectory. Now, what happened right about November, 2010 that might have given oil and gas companies reason to hire more workers to pull oil and gas from the ground? As it happened, the Obama administration announced in mid-October that it would lift the moratorium.
The moratorium didn’t just stifle job production, though, it actually cost jobs and not just in the oil and gas industry. The country lost 8,000 to 12,000 jobs, according to the Commerce Department (and over 19,500 according to this study conducted at Louisiana State University). What’s worse is that the administration got off lightly, according to its own people, who expected the moratorium to kill over 23,000 jobs.
There’s another problem with Beutler’s logic as well. As Sean Hackbarth pointed out, oil and gas companies would almost certainly be creating more jobs now if they had more access to oil and gas. It’s not hard to reason that if, say, Exxon Mobil could drill in more places for oil, it would certainly do so since it makes its “record profits” not off a huge profit margin but off sheer volume. The more oil it gets, the more it can sell and the more profit it can make for all its shareholders. But oil companies need people to extract all that oil, so they’ll hire more people, too. A lot more, as it happens. North Dakota has found an “economic miracle” thanks to drilling on mostly private land on the Bakken Formation. Jobs in the oil and gas industry along leaped over 15,000 in July of last year alone and the state has the lowest unemployment rate in the country, almost a third of the national rate.
Clearly, when companies can drill for oil, they’ll hire lots of people to do it. That President Obama has intentionally closed off areas for oil drilling (and even now is dithering over whether to open up more federal land) means that people haven’t gotten jobs who could have. As Sean put it, President Obama has left an awful lot of jobs on the table because he, to use Beutler’s words, has “squelched” new job creation in the oil industry. And, let me note finally, I’ve not even detailed the tens of thousands of jobs lost because the President will not build the Keystone XL pipeline — jobs that would be both temporary (construction of the pipeline) and permanent (refining and shipping the oil, maintaining the pipeline).
We had a growing oil industry before Barack Obama took office, despite a recession, and it’s taken a long time to overcome the blocks he continues to throw in the industry’s way. It doesn’t take a genius to see that we’d be doing a lot better if he’d only let go of his antipathy for oil companies and let them create all the jobs they can.
Category: Thinking About Energy