More and more, Republicans are telling us that gasoline would be cheap and jobs plentiful if only we would stop protecting the environment and let energy companies do whatever they want.
The irony here is that these claims come just as events are confirming what everyone who did the math already knew, namely, that U.S. energy policy has very little effect either on oil prices or on overall U.S. employment. For the truth is that we’re already having a hydrocarbon boom, with U.S. oil and gas production rising and U.S. fuel imports dropping. If there were any truth to drill-here-drill-now, this boom should have yielded substantially lower gasoline prices and lots of new jobs. Predictably, however, it has done neither.
[…] it’s hard to claim that excessive regulation has crippled energy production. Indeed, reporting in The Times makes it clear that U.S. policy has been seriously negligent — that the environmental costs of fracking have been underplayed and ignored. But, in a way, that’s the point. The reality is that far from being hobbled by eco-freaks, the energy industry has been given a largely free hand to expand domestic oil and gas production, never mind the environment.
First up, oil prices. Unlike natural gas, which is expensive to ship across oceans, oil is traded on a world market — and the big developments moving prices in that market usually have little to do with events in the United States. Oil prices are up because of rising demand from China and other emerging economies, and more recently because of war scares in the Middle East; these forces easily outweigh any downward pressure on prices from rising U.S. production. And the same thing would happen if Republicans got their way and oil companies were set free to drill freely in the Gulf of Mexico and punch holes in the tundra: the effect on prices at the pump would be negligible.
Meanwhile, what about jobs? I have to admit that I started laughing when I saw The Wall Street Journal offering North Dakota as a role model. Yes, the oil boom there has pushed unemployment down to 3.2 percent, but that’s only possible because the whole state has fewer residents than metropolitan Albany — so few residents that adding a few thousand jobs in the state’s extractive sector is a really big deal. The comparable-sized fracking boom in Pennsylvania has had hardly any effect on the state’s overall employment picture, because, in the end, not that many jobs are involved.
And this tells us that giving the oil companies carte blanche isn’t a serious jobs program. Put it this way: Employment in oil and gas extraction has risen more than 50 percent since the middle of the last decade, but that amounts to only 70,000 jobs, around one-twentieth of 1 percent of total U.S. employment. So the idea that drill, baby, drill can cure our jobs deficit is basically a joke.
Why, then, are Republicans pretending otherwise? Part of the answer is that the party is rewarding its benefactors: the oil and gas industry doesn’t create many jobs, but it does spend a lot of money on lobbying and campaign contributions. The rest of the answer is simply the fact that conservatives have no other job-creation ideas to offer.