Conventional political wisdom holds that Obama’s reelection fate is bound up with the economy. If employment is up, he’s in good shape; if it remains stagnant, we may see some turnover on Pennsylvania Avenue. If this is true, the President should be cheered by the past few months’ employment numbers. December’s jobs report, which had already exceeded expectations, was recently revised upwards. It was a long winter, but spring and a second term are just around the corner.
Yet while Obama may be excited by the good jobs news, he shouldn’t let it go to his head. The details of the new reports don’t exactly amount to an endorsement of his programs. Slow and steady job growth in the United States has little to do with the President’s pet programs in green energy—and a lot to do with brown. As the Wall Street Journal reports, many of the new jobs come from the recent oil and gas boom, which has begun to spread out from traditional resource states like North Dakota and Texas into states as far away as Idaho, Pennsylvania, and North Carolina:
The economic benefits of rising energy production are spreading far beyond the traditional oil patch, to Ohio and Pennsylvania, Nebraska and New York, North Carolina and Idaho. Truck drivers from pretty much anywhere can find work related to the surging energy business. Private-equity firms completed $24.8 billion of energy deals of all types last year, up from $8.5 billion in 2010, according to data tracker Preqin. Manufacturing plants are returning to the U.S. to take advantage of cheap natural gas, spurring major investments in petrochemical and steel production in the Gulf Coast and Midwest.
According to a Department of the Interior 300-page study of the subject of royalties from oil and gas production on public lands and waters commissioned from IHS-CERA, the GAO’s analysis of this extremely complicated arena was superficial and inadequate, and that the government makes out quite well, no matter how you define “fair share” that is supposed to be the guide of oil royalty and tax policy.
In fact, if you consider the government take as a proportion of the cash flow from oil and gas projects, the government typically nets more than the oil or gas-producing company does.
http://www.blm.gov/wo/st/en/prog/energy/comparative_assessment.html
Figure 3 from the IHS-CERA report shows how federal government revenue soared in 2008.
IHS-CERA’s conclusion is that when compared properly with the royalty and tax systems of 29 other nations, only Venezuela extracts a higher take from oil and gas production than the United States.
Obama might allow fracking if he looks at that graph and sees that his only hope of upping his revenue from oil is to up production.
He throws the greens a bone one day, then he throws them under the bus the next.
Just like he did with gays and blacks and banks.
It might already be too late to impact the economy with drilling on public lands. It takes a while to set up the rigs and do all the onsite work. Then there are all of the State regulations that require complience even on federal lands. Obam’s best bet would have been the Keystone XL pipe line. He might have painted himself into a corner except for those brainless Obama supporters.