Are 'green energy' policies thwarting job growth? Yes: Strategy sabotages economic recovery

US EPA

Technicians in personal protective equipment prepare pipe before cutting and removing the section from the Enbridge pipeline oil spill site near Marshall, Michigan.

Article Highlights

  • Obama's #green job-creation policy lacks direction and focus

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  • Putting off the #Keystone pipeline decision and stalling offshore drilling was grossly counterproductive

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  • Obama demonstrates little understanding of the damage his policies are doing to millions of unemployed Americans desperate to find work.

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Kicking the can down the road, as President Barack Obama did in delaying a decision on construction of the Keystone XL oil pipeline from Canada to Texas, certainly pleased the green lobby. But it did absolutely nothing for jobs creation. Nor did blocking access to new federal offshore areas for oil and natural gas drilling produce any jobs.

At a time when more than 13 million Americans are unemployed, you'd think that the president would be doing everything possible to stimulate employment. But his jobs-creation policy lacks direction and focus.

Putting off a decision on the Keystone pipeline and stalling offshore drilling was grossly counterproductive, compromising our commitment to North American oil production and potentially threatening our energy security. These and other regressive actions don't augur well for domestic energy development.

Is conventional energy production risk free? Of course not. But the environmental risks must be weighed against the economic and national security benefits of fully developing America's vast energy resources. The current White House policy has been to keep our energy production system operating below capacity. A more sensible policy would aim to expand energy supply in such job-generating sectors as oil and gas drilling, coal production and nuclear power.

"A more sensible policy would aim to expand energy supply in such job-generating sectors as oil and gas drilling, coal production and nuclear power."--Mark Perry

A study by Wood Mackenzie, an energy consulting firm, found that U.S. policies that encourage the development of new and existing resources could, by 2018, increase domestic oil and gas production by millions of barrels a day and support a million new jobs. Another study, by IHS Global Insight, estimates that returning permitting approvals to levels before the oil spill in the Gulf of Mexico would generate 230,000 jobs in 2012 — mainly blue-collar jobs that could make a huge difference for millions of Americans.

Continuing to pursue policies that slow down the issuance of leases and drilling permits, increase the cost of hydraulic fracturing for shale gas and delay the construction of oil sands pipelines are having a detrimental effect on jobs. If these obstacles are not addressed, we'll be missing out on creating the millions of jobs needed to bring the economy back to pre-recession employment levels.

Moreover, hiking taxes on the oil industry makes no sense, especially in today's sub-par recovery. Isn't it clear by now that these taxes would divert capital that might otherwise be spent on energy production, which would create thousands of jobs? Considering that Americans spend more than $500 million a day for imported oil, it would be absurd if we didn't make better use of our domestic energy resources.

In his "Jobs for America" speech in the fall, Obama didn't even mention the huge investments in shale-gas production in Pennsylvania, Texas and other states that are creating thousands of jobs and millions of dollars in revenue for governments. Nor did he propose developing oil and gas resources that are still off-limits in the Outer Continental Shelf off the East Coast and in the Gulf of Mexico.

Despite great handwringing over America's anemic job creation, the president demonstrates little understanding of the damage his policies are doing to millions of unemployed Americans desperate to find work. Unfortunately, pleasing the environmental lobby seems much more important to him now than jobs.

Mark J. Perry is a scholar at AEI

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About the Author

 

Mark J.
Perry
  • Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan's Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

    Follow Mark Perry on Twitter.


  • Phone: 202.419.5207
    Email: mark.perry@aei.org

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