The Boldt Company
- By removing regulatory burdens, the nation can let entrepreneurs create jobs and boost an otherwise lackluster economy
- 1.4 million American jobs can be created by 2030 if the government adopted policies encouraging energy exploration
- Opening energy resources in Michigan and other states will be win-win for all of us
The single most important word in Michigan today is jobs — and for good reason.
With so many Americans out of work, much of today’s political debate focuses on how to create more jobs. Labor unions support passage of a government-funded jobs act. Some argue for more stimulus spending. At a time when the federal deficit is nearing the $16 trillion level, neither option makes sense because they would short-circuit the economic recovery by piling on more debt.
A better option would be to empower business men and women to create jobs in the private sector. By removing unnecessary regulatory burdens that hinder companies from doing what they do best — creating jobs and meeting the needs of American consumers — the nation could create jobs and boost an otherwise lackluster economic recovery.
"For many, using America’s abundant natural resources to create jobs and boost the economy will require a new way of thinking."
Here’s a case-in-point: According to a Wood Mackenzie study, an estimated 1.4 million American jobs could be created by 2030 if the government adopted policies encouraging U.S. energy exploration and production. Constructing the Keystone KL pipeline could create an estimated 20,000 union jobs almost immediately — if only the Obama administration would stop blocking this much-needed, shovel-ready stimulus project. Hundreds of thousands of additional jobs could be created in states, including Michigan, with energy formations holding enormous quantities of oil and natural gas.
Energy-rich shale deposits, such as the Marcellus and Utica shales, can be developed safely with hydraulic fracturing. This tried-and-true technology has been coaxing oil and natural gas from deep hard-rock formations for more than 60 years and is credited not only with sharply increasing U.S. oil and natural gas production but also altering global geopolitics.
As energy expert Daniel Yergin noted, a new world energy map is emerging — and it is centered not on the Middle East but on the Western Hemisphere. In fact, the abundance of shale gas in the United States has lowered natural gas prices below $2.50 per thousand cubic feet and prompted a debate on whether American companies should begin exporting the fuel. And record-low natural gas prices have lowered energy costs for thousands of energy-intensive American manufacturers making steel, plastics, chemicals and fertilizer.
The success of hydraulic fracturing and the shale gas revolution are likely to shape our economy in ways few people have imagined. To date, only a few states are embracing this new energy reality, and they are reaping significant economic benefits. North Dakota, for example, is experiencing an oil boom in the Bakken Shale formation that has driven down the jobless rate below 1 percent in some counties in the oil region and created jobs in every sector of its economy. Recently, the Minot, N.D., airport reported 2011 was its busiest year since air carrier service began in the 1940s, thanks to the Bakken oil boom.
With the right policies, Michigan could experience a similar energy boom. The U.S. Geological Survey says the Michigan Basin, a huge bull’s eye-shaped formation under Michigan and portions of the contiguous states, contains an estimated 990 million barrels of oil, 11 trillion cubic feet of natural gas and 220 million barrels of natural gas liquids — huge amounts of energy that have not been tapped but are recoverable with today’s technologies.
For many, using America’s abundant natural resources to create jobs and boost the economy will require a new way of thinking. Despite the doomsayers, the United States is not running out of energy, and it can produce more of its own energy supplies without abandoning the environmental progress that has been made since the first Earth Day 40 years ago.
With a combination of new energy production technologies and sensible regulations, the private sector can create millions of jobs, protect the environment, move us further in the direction of energy independence, and generate millions of dollars in government revenues to pay down the deficit.
Opening up our vast domestic energy resources in Michigan and other states to increased development and allowing the private sector to get back to work is a win-win-win situation for all of us.
Mark J. Perry is a scholar at AEI