API President talks about energy jobs

Jack Gerard:

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... During the give and take of public discourse, few truly stop to think how absolutely essential oil and natural gas are to our lives, to our prosperity and security, and to our future.

Oil and natural gas are the foundation of our energy-dependent economy. They profoundly affect how we live and work. They are key to our mobility, to keeping our homes and businesses warm, to providing us with electric power, and to supplying the raw materials for countless consumer and industrial products – everything from fertilizers to computer chips to medicines … the list goes on.

In total, oil and natural gas supply 63 percent of the nation’s energy today and represent more than $1 trillion of U.S. economic activity, accounting for some 7.5 percent of U.S. GDP – helping make our economy the biggest in the world.

And, just as important, oil and natural gas are putting huge numbers of Americans to work. They support more than 9.2 million U.S. jobs, a job base that even with the assumed maturity of this industry is surprisingly dynamic and growing and has potential for more growth. For example, between 2004 and 2007 the industry created more than two million additional American jobs.

Part of that dynamic growth springs from new initiatives in alternatives and other new energy technologies. We understand that our energy future will be one of increasing energy diversity. So while oil and natural gas companies continue to invest substantially in new oil and natural gas projects, they are also investing in virtually every alternative technology from solar power to lithium batteries to geothermal to fuels made from algae.

Between 2000 and 2008, the oil and natural gas industry invested more than $58 billion on these and other carbon mitigation technologies, more than either the federal government or the rest of private industry combined.

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There is more.

These companies recognize that they are in the energy business and they are investing in the future of that business. If the alternative energy development produces commercially viable products they will be brought to market. For those who are trying to make a go of the "green jobs" market it is still tough.

Vincent Carroll looks at the challenges:

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"Building a robust clean-energy sector is how we will create the jobs of the future, jobs that pay well and can't be outsourced," President Obama said last week in announcing new tax credits for "green" jobs while calling for additional money for green manufacturing.

"Pay well"? That depends. The Vestas Wind Systems plant in Windsor pays "wages of about $30,000 a year for production workers," The Denver Post reported last year. That may be enough to put food on the table and clothes in the closet, but let's not get misty-eyed over it. Median household income in Colorado was about $57,000 in 2008, according to the Census Bureau.

Some clean-energy jobs pay well and some pay not so well. That's how it goes in almost every industrial/technology sector. As for jobs that "can't be outsourced," what could the president be thinking? Maybe you can't outsource the guy who installs solar panels or strings transmission lines from remote wind farms, but the same could be said of many occupations in many fields. Meanwhile, just how does the president plan to keep green manufacturing and development work from migrating elsewhere? By executive order?

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As Boudreaux explained on his blog, "How can Mr. Friedman be so sure that the benefits of windmills, solar panels, and battery-powered electric cars will exceed the costs of making — will exceed in value that which must be foregone to make — these green fetishes a reality?

"Of course, he cannot be sure. Not even close. Like so many other pundits, Mr. Friedman simply ignores, or arbitrarily discounts, the costs of turning his oh-so-lovely daydreams into quotidian actuality."

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As I have pointed out before, if these products could be produced at commercially reasonable prices where they could be sold for a profit, they would be. I don't think these fantasies are all that wonderful. There is no electric car that can take me to Houston and back (about 80 miles each way depending on where in the big city you go), much less take me to see my grand kids in San Antonio. Returning to the primitive age where I would have to take a train for such trips does not appeal to me. What they are suggesting is a loss of freedom.

Right now the "payback" on solar power for my house would not occur in my lifetime. The wind here is too inconsistent to rely on that method and the cost of the windmills is also prohibitive. We already know that the rates would skyrocket if the power company had to rely on wind.