Natural Gas Can Put Americans Back to Work

The natural gas and oil industry already sustains 2.2 million jobs and can add 1.5 million new ones.

By JAMES J. MULVA

Even after 103,000 jobs were added during September, unemployment remains at 9.1%. Counting those who have given up the job search or accepted a part-time job, economists calculate actual unemployment at a staggering 16.5%. Where will the growth come from that can help get people back to work?

One source is the natural gas industry, which is already generating jobs by the thousands, all without government subsidy. And it can generate even more, if we unleash this resource's full potential.

More than 600,000 Americans already explore, produce, store and transport natural gas, according to consultancy IHS Global Insight. For example, in Texas the Barnett shale gas field has created 100,000 jobs since the mid-1990s, and the Eagle Ford field is expected to create 68,000 jobs by 2020. In addition, IHS Global Insight estimates another 2.2 million jobs nationwide are sustained indirectly by the incomes of natural gas workers, or in companies that service the industry.

At least 15 states now produce shale gas and others may join them. The largest shale area, the still-emerging Marcellus, covers much of the Northeast and already supports 140,000 jobs in Pennsylvania alone.

Natural gas and shale gas heat homes, schools and factories, generate electricity and serve as feedstock in plastics, chemicals and fertilizer. They are familiar, safe and affordable. Abundant reserves—North America has an estimated 100-plus year supply, according to the Department of Energy—mean natural gas prices will remain reasonable, giving energy-dependent American manufacturers an edge in competing for global business.


A drill hand in Mannington, West Virginia, works on the Marcellus Shale.
This clean energy source has other advantages. Compared to coal-generated electricity, natural gas produces little of the nitrogen, sulfur compounds and particulates that cause acid rain and smog. It yields half the carbon dioxide of coal and consumes 60% less water, while producing no soot or fly ash. By providing backup power when there is no wind or sunshine, natural gas enables the use of these intermittent renewable energy sources.

A consulting firm, Wood Mackenzie, recently predicted that the oil and natural gas industry would create a half-million new U.S. jobs by 2030 under existing government policy. But with more favorable policies, 1.5 million new jobs could be created and tax revenues would rise by $800 billion. To make this possible, several steps are needed.

First, governments must stop singling out the oil and natural gas industry for tax increases. Its effective global tax rates already far exceed those of other industries.

Second, when considering new natural gas regulations, government should first assess the adequacy and enforcement of the thousands of existing federal, state and local regulations that already govern production. Duplicative or conflicting requirements add little protection but needlessly increase costs and further stifle the economy.

Third, government must open new areas to exploration, while ensuring sound environmental stewardship.

Finally, although all energy sources are needed, government mandates that force electric utilities to use renewable energy sources such as wind and solar are mistaken. Such sources are generally uncompetitive, requiring subsidies that increase costs to consumers. Further, by crowding out cleaner-burning natural gas, the mandates may not achieve significant reductions in greenhouse gas emissions. Rather than favoring particular technologies, governments should focus exclusively on setting environmental objectives and allow markets to innovate and select the most environmentally and economically effective sources based on their merits.

The natural gas industry itself must meet the highest environmental and safety performance standards. It must demonstrate that its time-tested and proven drilling techniques pose little threat to groundwater and air quality.

Additionally, the industry must demystify its work by better explaining to the public how we find and develop natural gas, our techniques and safeguards, the potential that natural gas represents for the country, and what steps regulatory authorities should take to help capture that potential for consumers. As a major natural gas producer, ConocoPhillips is playing its part by conducting an open, honest and balanced conversation with government and the public to convey the economic and job-creation potential of natural gas, while listening to their ideas.

The natural gas industry is growing, and its growth can help put the country back to work.

Mr. Mulva is chairman and chief executive officer of ConocoPhillips.