My Mistake on Drilling - UPDATE

Long time commenter on this blog Road Dawg asked me privately what I thought about our nation's drilling policy, because I had never really addressed it on these pages. The fact is that I had always thought that we couldn't drill enough to have a significant impact on the price of oil world wide. As a result, even though I didn't personally believe the drilling restrictions we've suffered for decades were appropriate I didn't think it was a worthy issue, because it just made our side look insensitive to the environment but didn't change the price of oil anyway.

I still believe that our own drilling won't have much effect on prices, but it has become clear that I was missing something more important. Jobs. Drilling in North Dakota and the impact of the Keystone XL pipeline, if it were built, means jobs for Americans. It was a mistake on my part not to acknowledge that part of the equation, especially when unemployment really took off in 2009. Further, I might even be wrong about the economic impact. It seems that all of the natural gas we are bringing up out of the ground is having a huge impact on its price.

So I have to give props to Mr. 'Dawg on this, and thank him for pushing me on the issue. Now let's drill baby.

UPDATE

Shale oil in the U.S. can be a huge source of new jobs. Steel mills and chemical plants and maybe a million jobs could be created from a boom in drilling for this type of oil. See Industry Week.

Define Irony

The WSJ is reporting that a boom in natural gas and oil is creating U.S. jobs. According to Russell Gold's article a total of 158,500 direct new jobs were created over the last five year. More jobs have been created in secondary industries like Fleetwood Homes, in Idaho, for shipment to North Dakota oil fields.

Who would have thought that this administration would be presiding over an oil and gas boom? Well they wouldn't be if the those resources had been found on federal land. But Obama will reap the benefit anyway.

About those Dakota homes, here's some video.



A few quotes from the WSJ:

The staccato of nail guns echoes across a cavernous building here as workers piece together manufactured houses with easy-to-clean linoleum floors and rugged interiors for muddy oil-field workers.
. . .
The economic benefits of rising energy production are spreading far beyond the traditional oil patch, to Ohio and Pennsylvania, Nebraska and New York, North Carolina and Idaho. Truck drivers from pretty much anywhere can find work related to the surging energy business. Private-equity firms completed $24.8 billion of energy deals of all types last year, up from $8.5 billion in 2010, according to data tracker Preqin. Manufacturing plants are returning to the U.S. to take advantage of cheap natural gas, spurring major investments in petrochemical and steel production in the Gulf Coast and Midwest.
. . .
During his State of the Union speech, President Barack Obama said, "The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper."