UPDATE 1-Oil-funded study: drilling could add 1 mln US jobs

Wed Sep 7, 2011 5:11pm EDT

Related Topics

 * More oil, gas drilling could create 1.4 mln jobs - study
 * Development could yield $800 bln in government revenue
 * Key policies in study face uphill political battle
 (Adds comment from energy analyst)
 By Ayesha Rascoe
 WASHINGTON, Sept 7 (Reuters) - The United States could
create more than 1 million jobs by 2030 by expanding offshore
drilling, limiting federal regulation of shale gas development
and quickly approving a Canadian oil sands pipeline, according
to a study commissioned by an oil industry group.
 The study's bottom line would depend on some major policy
shifts by President Barack Obama and Congress, and comes ahead
of a key speech by Obama on his plan to boost U.S. employment
as the country struggles to regain its economic footing.
 The study was conducted by consulting firm Wood Mackenzie,
and paid for by the American Petroleum Institute, and the
findings were released on Wednesday. The consultants found that
1.4 million new jobs could be created through more oil and
natural gas development.
 "Our new Wood Mac analysis is what our industry has to
offer: jobs, increased federal revenue, economic and energy
security. Our industry has long been a leader in these areas,
but what we are here to say is we can do even more," API head
Jack Gerard said at an event on Capitol Hill.
 The urgency to address the employment situation has
increased for lawmakers after a Labor Department report last
week found the economy created no new jobs in August.
 Gearing up for upcoming budget battles in Congress, oil and
gas industry advocates have argued that the fossil fuels sector
could be an engine for economic growth and should not become a
target for more taxes or regulations.
 The study said that expanding oil and gas production would
generate more than $800 billion in additional government
revenue by 2030 from taxes and drilling leases.
 But for such outcomes to be realized, some politically
difficult actions would need to be taken by Congress and the
Obama administration.
 For example, the report assumes the Arctic National
Wildlife Refuge (ANWR) would become open to oil drilling, a
move that would likely need congressional support and is
strongly opposed by many Democrats.
 The job creation cited in the report would also depend on
speeding up permits for offshore drilling in the Gulf of Mexico
and quickly approving TransCanada's (TRP.TO) Keystone XL
pipeline, both politically sensitive issues that fall under the
purview of the Obama administration.
 The jobs scenario also depends on regulation of shale gas
development remaining at state level. Environmental critics of
the hydraulic fracturing or "fracking" technique used to tap
shale gas have urged more federal regulation of the practice.
 Daniel Weiss of the Center for American Progress, a liberal
think tank, said the report overstates the differences between
the current outlook for shale gas and its high-output scenario.
The findings assume stringent regulations on hydraulic
fracturing that do not yet exist, he said.
 "Right there, the estimate is already based on at least one
flawed assumption," Weiss said.
 Republicans in the House of Representatives have passed
legislation aimed at increasing drilling permits in the Gulf
and setting a firm deadline for deciding on Keystone XL, which
would move Canadian oil sands crude to the U.S. Gulf coast.
 But these efforts have met resistance in the
Democrat-controlled Senate and it is unclear what energy bills
could be passed into law with the partisan gridlock in
 Doc Hastings, the Republican chairman of the House Natural
Resources committee, said he plans to propose the opening of
ANWR to the so-called "super committee" in Congress, which is
supposed to focus on reducing budget deficits.
 While opening ANWR has been a lightning rod in Congress in
the past, he said he hopes to be able to gain support from
Democrats on the select committee.
 "Maybe with the price of oil where it is, the price of
gasoline where it is, the national security aspects, maybe some
of these members will have an epiphany," Hastings told
reporters after giving a speech at the energy jobs conference.
 (Additional reporting by Timothy Gardner; Editing by Bob
Burgdorfer and Dale Hudson)

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