Oil-Funded Study: Drilling Could Add 1M Jobs

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 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.

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.

UPHILL POLITICAL BATTLE

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 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 Congress.

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)