WyoFile Energy Report

Oil and gas lobby overstates job potential

Once again, the oil and gas industry’s bulldog lobbying group, Western Energy Alliance (formerly IPAMS, or Independent Petroleum Association of Mountain States), is grossly misleading the public and elected officials about the supposed suppression of jobs and revenue from proposed energy development in the West.

Dustin Bleizeffer

Western Energy Alliance (WEA) — whose supposedly mom-and-pop-sized members include Anadarko Petroleum Corp., EnCana Oil & Gas, Halliburton, Chesapeake Energy and Schlumberger — hired consulting firm SWCA Environmental Consultants to look at 22 proposed oil and gas projects in Wyoming and Utah that were subject to review under the National Environmental Policy Act.

WEA insists there are rigid timelines that federal regulators must abide by in any NEPA analysis, but remains silent on the industry’s tendency to oversize projects and change plans midway through analysis. Nonetheless, some projects were delayed by three years, which is “preventing the creation of 64,805 jobs, $4.3 billion in wages, and $14.9 billion in economic impact every year,” according to WEA.

WEA would have you believe that if these 22 projects were stamped approved today, we’d soon add 64,805 jobs and set the stage for millions in wages and economic revenue over the life of the projects — all done with minimal negative impact to our public lands, water and wildlife, of course.

Nevermind that onshore oil and gas drilling has flourished under the Obama administration more than under any of the four previous administrations. This administration is determined to shackle the oil and gas industry. Nevermind that it was an all-hands-on-deck drilling pace that flooded the national market and killed the price of natural gas. Nevermind there is nary a spare drilling rig to sic on WEA’s estimated 1,720 delayed wells per year scenario in Wyoming. Nevermind all of that for a moment, and lets talk about jobs.

Most of these good jobs that WEA promises are hard to fill and even more difficult to keep filled. When it comes to these drilling locations, “it’s a revolving door,” testified Don Burkhart, adding that there’s a lot of inexperienced workers in the field.

Burkhart is a safety manager for BP America’s Wyoming operations, and he serves as chairman for the Petroleum Association of Wyoming’s safety committee. Last week Burkhart and several other industry officials testified at a hearing of the Wyoming Occupational Safety and Health Administration commission in Casper. At issue was whether to institute a new rule that would require all personnel on a drilling location to wear flame-resistant clothing (FRC), a question that appears to divide the industry down the middle.

In arguing against the proposed rule, several industry representatives said that to keep every worker in a $1,000 pair of FRCs would create an unnecessary cost, especially considering the high turnover rate in the industry. One industry person estimated that within a year, there’s 100 percent turnover on every rig. A well-service representative estimated that a core group of about 60 percent of workers stay with the job for several years, while the other 40 percent “is like a revolving door.”

Sounds like that would be an argument for FRCs. But back to jobs. At an industry job fair in Casper in March, oil and gas company recruiters said hiring is a constant challenge.

“I’m finding a lot of hands who have no idea what the oilfield is that are coming looking for work,” Unit Corp. recruitment manager Scott Evans told WyoFile.

There are literally hundreds, if not thousands, of jobs in the energy industry right now. However, “It’s quite the challenge to find the right people for the job,” said Evans. “I’m looking for energized people, people that are hungry looking for work, people wanting new challenges, dependable. Those are the things I’m looking for.”

Rather than blocking the creation of jobs, it would be more accurate to describe the 22 proposed drilling projects in Wyoming and Utah as a continuation of jobs. But that’s not fiery enough for WEA. Instead, regulatory officials and citizens who insist on careful environmental analysis must be regarded as enemies our nation’s energy interests.

“Federal policies discourage domestic oil and  natural gas production, and put the West at a disadvantage compared to other regions of the country without a preponderance of public lands. This study provides hard evidence of how bureaucratic delays are adversely affecting small businesses and working families,” said Kathleen Sgamma, WEA’s vice president of government and public affairs.

Sgamma fails to mention that the industry is running away from natural gas and toward shale oil which, for the most part, isn’t locked under federal lands and NEPA analysis. Most of the proposed drilling projects under NEPA analysis in Wyoming and Utah target natural gas. I hope that by the time those projects move forward, the price of natural gas will have recovered from what some consider to be an un-commercial level today.

So how can an industry with more work than it can keep up with — an industry that’s drilled so many wells that it killed the national natural gas market with a glut of production — possibly claim that, by not ripping the spigot clean off the valve, it is being squeezed into a miniature weak parody of its potential glory?

Andrew Schenkel, formerly of the Checks And Balances Project, has a theory about why WEA and others in the industry have chosen this narrative of job-killing regulation.

“They smell blood,” said Schenkel. “There’s this idea that all regulation can effectively be labeled as job-killing. If they can keep down renewable energy and eliminate what little competition they have, they see that as their holy grail of what they can accomplish.”

That would be a very cynical aim. I believe there is some genuine concern in the industry right now about future access to public lands, not because of blind prejudice against the industry or a blundering failure to understand how energy is developed on public land. It’s because at this point, we have more evidence in hand than we’ve ever had, and we understand now, better than ever before, about the real cost to land, water, air and wildlife.

When the Pinedale Anticline was originally approved, federal regulators only guessed that emissions would not be a problem. Now, we have hard evidence in hand that proves emissions from natural gas activity has led to dangerous ozone spikes — an impact that has rendered Sublette County in non-attainment of the Clean Air Act. When the coal-bed methane gas industry first charged across the Powder River Basin, the sage grouse wasn’t even on the radar for federal and state regulators. Now, the Powder River Basin sage grouse population teeters on the edge of functional extinction with no hope of recovery.

This time, we’re armed with more knowledge, better modeling and a much more clear understanding that there is a net impact on our natural resources — resources that drive other areas of our economy in the West. And this new information must, by law, be considered in NEPA analysis. If there have been delays in these projects it’s not because of punitive policy changes. It’s not because anybody wants to see American energy producers fail. It’s because we’re smarter this time, and the stakes have never been higher.

Contact Dustin Bleizeffer at 307-577-6069 or dustin@wyofile.com.

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Published on May 16, 2012

{ 2 comments }

James June 13, 2012 at 10:18 am

I’d like to rewrite one of your paragraphs for you:
Nevermind that *private, state (not federally) regulated* onshore oil and gas drilling has flourished under the Obama administration more than under any of the four previous administrations. This administration is determined to shackle the oil and gas industry *by not allowing new permits/drilling on federal lands*. Nevermind that it was an all-hands-on-deck drilling pace *on private lands* that flooded the national *natural gas* market and *lowered the price from 14 $/MBTU to 2 $/MBTU, thus creating more affordable energy for natural gas consumers.

Rob Davidson May 17, 2012 at 5:38 pm

“They smell blood,” said Schenkel. “There’s this idea that all regulation can effectively be labeled as job-killing. ”
Our congressional delegation is drinking from this same cup; mindless of how programmed they appear spouting the same made up job estimates and impacts.
The Canadians have it even worse. The Prime Minister openly calling anyone who wants review of impacts on their homelands or communities domestic terrorists.
Bleizefffer nails another story and analysis; thank you.

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