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“For many American families, struggling to make ends meet in the jobless recovery, energy development is an answer to a prayer. The fact that the oil and gas boom has been done without taxpayer subsidies—and despite reactionary public policies at the federal level and in some states (such as New York)—means that more economic opportunity is on tap.”

In this so-called “jobless” recovery, aka the Great Recession, an estimated 20 million American workers are unemployed or underemployed. One out of every two college students cannot find work in their chosen fields. Competition for well-paying jobs is likely to become even tougher when thousands of men and women in uniform return home from Afghanistan and look for ways to support their families.

Although many U.S. industries have been reluctant to hire new workers due to political and economic uncertainty, the oil and natural gas industry is booming worldwide. Jobs are available on offshore rigs, at service companies that support energy production activities, and onshore where technologies are unlocking energy supplies from impermeable rock deep underground.

Hydraulic fracturing, directional drilling, and 3- and 4-D computer modelling, among other high technologies, are helping to produce oil and natural gas from shale formations that once were believed to be too difficult or too expensive to tap. In the process, they are creating jobs at large and small companies in dozens of states. In the bigger scheme of things, this renaissance means that the hydrocarbon energy era has an open-ended future.

In North Dakota, where drillers are producing crude oil from the Bakken Shale, workers are finding jobs offering wages that are significantly higher than the national average. Truck drivers are being paid $80,000 a year to start. Some workers on oil rigs are being paid six figures. And yet many jobs are going begging. According to the mayor of Williston, “A lot of jobs get filled every day, but it’s like for every job you fill, another job and a half opens up.” In April, North Dakota had a jobless rate of 3.0 percent, the lowest in the country.

In Pennsylvania’s Marcellus Shale region, tens of thousands of jobs have been created, opening opportunities for unskilled labourers to obtain training and earn excellent wages. According to the state’s Department of Labour and Industry (Center for Workforce Information and Analysis), jobs for drill operators are expected to grow by nearly 85 percent this year, while the job growth rate otherwise in Pennsylvania is projected to be less than three percent.

The expansion of the oil and natural gas industry is also occurring at Texas’s Eagle Ford, Louisiana’s Haynesville Shale, Arkansas’ Fayetteville Shale and other energy-rich rock formations. Taken together, they are increasing domestic energy supplies, making energy more affordable, and spawning subsidiary investments in the private sector creating additional jobs.

A steel plant in Ohio is adding 200 jobs to produce more drill pipe. A new ethane plant in Texas, which will use natural gas to produce plastics, is expected to generate 400 jobs. Frito-Lay is purchasing natural gas-powered trucks to deliver consumer products around the country. New cleaner-burning gas-fired power plants are being built to replace old coal-fuelled electricity generating facilities. (But expect coal-fired power to improve its technology too to remain competitive in many respects.)

These jobs are being created by companies, not the federal government. And they are based on “made in the USA” technologies that have the potential to greatly increase nation’s energy security and alter the world’s balance of power. As U.S. oil and natural gas supplies increase, some experts believe American energy independence is on the horizon.

Philip Verleger, an economist at the Peterson Institute for International Economics, believes the United States could be energy self-sufficient in the next 10-plus years and could become a net energy exporter.

Yet, some environmental groups are reluctant to embrace this good news scenario. They see domestic energy’s success as a threat to their green agenda. In their continuing push to reduce carbon dioxide emissions, they are working to stop hydraulic fracturing, shut in oil and natural gas wells, and in the process, slow or stop progress.

Their strategy is to promote fear of hydraulic fracturing worldwide. Concerns over groundwater contamination have prompted France and Bulgaria to ban fracturing and other countries are considering moratoria. Yet, despite efforts to find a link between fracking and drinking water pollution, U.S. Environmental Protection Agency (EPA) investigations have found no credible evidence to support the claim.

Energy experts believe the reluctance of other countries to develop their shale resources is giving the United States a market advantage, prompting interest in exporting liquid natural gas (LNG) from the Gulf Coast. Italy, Lithuania, and Poland are building terminals to accept LNG imports, and LNG imports to the European Union are expected to grow by nearly 75 percent by 2035. Energy expert Daniel Yergin calls Europe “an obvious market” for U.S. LNG.

The home-grown energy renaissance could become a major reversal of fortune, wiping out 40 years of worry over U.S. reliance on foreign energy sources. According to an analysis by Wood Mackenzie, it also could create an additional one million jobs by 2018 if the government opened more onshore and offshore areas to exploration and development.

For many American families, struggling to make ends meet in the jobless recovery, energy development is an answer to a prayer. The fact that the oil and gas boom has been done without taxpayer subsidies—and despite reactionary public policies at the federal level and in some states (such as New York)—means that more economic opportunity is on tap.

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While the latest buzz is centered on the “drop” in gasoline prices, reality indicates that gasoline is still well over $3 a gallon. These prices translate to continual pain at the pump causing many drivers to rethink their daily driving schedule.

With the price of crude oil hovering in the mid $80s, gasoline prices will not be coming down to a reasonable point any time soon. An obvious answer to this national problem of high gasoline prices should be the use of natural gas in America’s vehicles. Daily news articles across the country are constantly stating and or complaining that America has a glut of natural gas from the shale boom that has been taking place over the last four years. How can this glut be used for the country’s good?

Natural gas can be utilized in a vehicle in two ways: compressed, or CNG, or liquefied, or LNG. CNG and LNG are two terms that get tossed around in the media, but with little explanation to the consumer as to what they are, how they can be used, and what cost and savings are involved when using them.

CNG is typically used in lightweight and medium-duty vehicles, such as a Honda Civic or a Chevy, Ford or Dodge truck. Tanks are installed in the trunk of a car or in the bed or a truck from the factory, or can be installed by a licensed professional after market. While the initial costs for a new vehicle equipped with a CNG tank are around $10,000 to $12,000 more than a standard gasoline vehicle, state tax rebates are available in Louisiana and other states that reduce the cost significantly to the consumer.

Any additional costs left after the rebates are recuperated in a minimal time due to the drastic savings at the pump. CNG is selling for around $1.75 per gallon as opposed to the over $3 per gallon one pays in regular gasoline. CNG home-pumping stations are also available, again, with tax rebates accessible to recuperate the expense of the home unit.

A gallon of CNG dispensed into your vehicle from a home unit is less than 50 cents per gallon. The savings are quite obvious once the numbers are compared between CNG and gasoline.

Liquefied natural gas is another avenue for our natural gas supply to be used in the vehicles that drive our nation’s economy. LNG is typically used in large eighteen-wheelers, construction equipment, locomotives and barges that travel our waterways. While LNG requires larger tanks and is more user-friendly for larger scale vehicles, it also is a better fuel for high-mileage travel due to the process to which it is burned in the vehicle.

LNG and CNG are not only cheaper fuels, but they also burn at a higher octane level than gasoline giving a longer lifespan in the engines to which they are used. While price and quality are important factors to consider, the most important element to keep in mind is that natural gas is produced right here in Louisiana.

Don Briggs is president of the Louisiana Oil and Gas Association. His column is published every other week.

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Federal oil-and-gas issues traditionally divide industry supporters and environmental advocates, but President Barack Obama’s proposed five-year leasing plan for the Gulf of Mexico has both sides raising objections, though for different reasons.

The U.S. Interior Department submitted the plan to Congress for review late last week, recommending 12 lease sales for the Gulf’s Outer Continental Shelf through 2017. The interior secretary is expected to implement the plan in roughly two months, and the first sale could be conducted this fall.

The U.S. Bureau of Ocean Energy Management has already overseen two Gulf lease sales since the 2010 BP oil spill, including one in December in which 21 million acres were offered and another last month that attracted $1.7 billion in record high bids.

Regan Nelson, senior oceans advocate at the Natural Resources Defense Council, an environmental group, said the government is rushing back into exploration without learning the lessons of the BP disaster.

“The plan is too aggressive, too broad and too rushed,” Nelson said. “An array of critical safety and environmental issues must be addressed first before America puts more coastal areas at risk.”

Increased oil-and-gas drilling is not the best way to help meet the nation’s energy needs, he added, and the Obama should be supporting clean, renewable energy sources instead.

The five-year plan outlines lease seals for Gulf and Arctic waters only; the Atlantic and Pacific coasts remain closed to oil-and-gas activity.

U.S. Interior Secretary Ken Salazar calls it “targeted leasing,” meaning the government is offering leases that officials contend are “best suited for exploration” based on all available information and technology.

“When it comes to domestic production, the president has made clear he is committed to producing more oil and natural gas safely and responsibly,” Salazar said. “The numbers speak for themselves. Every year the president has been in office, domestic oil and gas production is up, imports of foreign oil are down, and currently the nation is producing more oil than any time in the last eight years.”

Don Briggs, president of the Louisiana Oil and Gas Association, countered that the administration’s overhaul of energy activity and complex permitting requirements are stifling investments. For example, Briggs said only 48 companies submitted bids during last month’s lease sale, compared to 77 companies in 2010.

“This 38 percent decline in companies bidding is clearly due to the uncertainty that companies feel from the federal government and their unfavorable energy policies,” he said.

U.S. Rep Steve Scalise, R-Metairie, said the five-year plan closes more areas of production than it opens.

He also said the administration ignored feedback from Gulf Coast states — requests to increase domestic production — when the plan was originally released in November.

This final version is essentially unchanged, and Scalise said it’s Obama’s way of “doubling down on his already failed agenda” of cutting foreign dependence on oil.

“Closing off 85 percent of the OCS to domestic energy exploration is like an early Christmas gift to OPEC nations,” said Scalise, whose district will include Terrebonne and Lafourche parishes this fall. “By saying no to exploration in the OCS, President Obama has also said no to thousands of American jobs and he also made our country more dependent on Middle Eastern oil.”

The Organization of the Petroleum Exporting Countries, or OPEC, is an group of oil-producing nations that includes, among others, Saudi Arabia and the United Arab Emirates.

For Republicans, who are pushing for enhanced drilling as this fall’s congressional and presidential elections approach, it’s part of a larger campaign theme, which makes the five-year plan highly political.

Still, there are Democratic critics as well, including U.S. Sen. Mary Landrieu of New Orleans, who argued that the plan “seemingly ignores the vast oil-and-gas resources available off the shores of the U.S.” and offers nothing new on the side of exploration and production.

“It is disappointing this administration is so shortsighted on the tremendous benefits this industry brings to the U.S.,” she said.

If there’s a silver lining, she said, it’s that the future leases included in the Eastern Gulf are areas opened under the Domenici-Landrieu Gulf of Mexico Energy Security Act.

That means the bonuses and rental rates from lease sales scheduled for 2014 and 2016 will be shared with the four Gulf producing states, including Louisiana, almost immediately. And once leases are producing, royalties also will be split among those states.

The Domenici-Landrieu Act secured a 37.5 percent share of offshore oil-and-gas revenue for Louisiana. The money must be used for flood protection and coastal restoration projects.

U.S. Sen. David Vitter, a Republican from Metairie, said Obama’s original leasing plan, which was withdrawn, initially called for more lease sales and the opening of nearly all of the Outer Continental Shelf.

For critics such as Vitter, the revised plan is better than nothing, though it signals rough waters ahead for those who want more production.

“Until we see a positive trend with lease sales and issuing drilling permits, no one should be remotely convinced that Washington’s off-course energy policy is on the right track,” Vitter said.

The plan is also a disappointment to those who want less drilling and stiffer safety regulations, said Jacqueline Savitz, vice president for North America at Oceana, an environmental advocacy group.

“Encouraging clean-energy investments would create jobs without risking people’s lives and livelihoods,” Savitz said. “Instead, this plan sets us up for another devastating oil spill, which endangers human lives, coastal economies and marine life.”

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In June, the number of drilling rigs operating in the federal waters off Louisiana’s coast climbed to its highest level in three years, although industry members say most of that activity is taking place in water depths of less than 500 feet.

“The trend in the Gulf as a whole is positive. The rigs are returning. The rigs that left the Gulf are returning. Companies are rehiring people that they had to let go,” said Nicolette Nye, a spokeswoman for the National Ocean Industries Association.

In mid-June, figures from the Louisiana Department of Natural Resources showed 46 rigs were operating in federal waters off the state’s coast. Nineteen of those rigs were working in water at least 500 feet deep.

There were 33 deepwater rigs working in the Gulf of Mexico in the months before the BP Macondo disaster, the biggest oil spill in U.S. history. A federal ban on deepwater drilling followed.

A report released May 30 by the Gulf Economic Survival Team, which the state formed after the moratorium, said the increase in rig counts is misleading.

Although the rig count would seem to indicate drilling activity is returning to pre-moratorium levels, only a third of the 18 rigs operating in May were drilling new wells, the report says. The rest were working on existing wells and doing maintenance.

Bernard Weinstein, associate director of the Maguire Energy Institute at Southern Methodist University and author of the report, said the purpose of the study wasn’t to say that things are bad in the Gulf.

“Things are a lot better than they were a year ago and a hell of a lot better than they were two years ago,” Weinstein said. “But we do know that production is still sub-optimal.”

In 2010, the Gulf produced an average of 1.55 million barrels per day, according to the federal Energy Information Administration. In 2011, that number fell to 1.32 million barrels per day, and production is expected to fall to 1.23 million barrels per day this year.

Before the moratorium, the agency’s 2012 forecast called for Gulf production of 1.76 million barrels per day. Weinstein said even the Energy Information Administration thinks production will not return to pre-Macondo levels until the end of 2013 at the earliest.

Weinstein’s report said the uncertainty about the cost to obtain a permit and the length of time for approval is hampering efforts to develop deepwater projects.

Lori LeBlanc, executive director of the Gulf Economic Survival Team, said companies want to invest in the Gulf faster than regulators can process the permits.

“If you don’t have a regulatory system that matches industry’s ability to invest in the Gulf, then we fear that that capital will shift to other parts of the world,” LeBlanc said.

Still, the federal government’s June 20 auction of Gulf leases brought in $1.74 billion for 454 tracts. It was the largest sale since the BP disaster in 2010. In a conference call with media members, Interior Department Secretary Ken Salazar said the auction results show the Gulf is back.

But industry members said the sale would have drawn even more bidders — 48 versus 77 in 2010 — if there were more certainty regarding regulations.

Gifford Briggs, vice president of the Louisiana Oil and Gas Association, said exploration and production in the Gulf has fallen steadily.

In 2001, there were 148 rigs working in the Gulf, roughly 100 more than now, Briggs said.

“The decline in activity in the Gulf of Mexico is not because of Macondo,” Briggs said. “It’s because the Gulf of Mexico is the most expensive place to drill for oil in the world, and a major part of that is because of the regulations and the permits.”

The regulations have become so expensive that companies are going elsewhere, he said.

Celena Rousse, president of Larose-based Offshore Towing Inc., said there is no comparison between deepwater activity now and activity in early 2010.

Most of the company’s work is moving rigs into deepwater.

During the moratorium, hourly rates for offshore towing operators dropped from $2,200 to as little as $600, Rousse said.

Offshore Towing was lucky because its vessel owners are solid financially and had the money to keep the company going, Rousse said. Otherwise, the company would have been in trouble.

“The market has gotten really bad, and I hate to think Obama being president for another term,” Rousse said. “I’m really worried about that. All in all, things have really declined.”

There are some bright spots. Despite the cost and the regulations, the shallow-water areas of the Gulf are seeing more drilling activity.

“They’re starting to come back now, not because they’re getting anything for dry gas,” Weinstein said. “But now they’re selling their natural gas liquids, which are in very high demand.”

Still, industry members say they are a long way from pre-Macondo business levels.

J.C. Gallet, president of Oil Country Tubular Corp. in Lafayette, said some of his customers have seen contracts cancelled.

“There’s heightened activity but not to that extent,” Gallet said.

Some of his customers have seen projects cancelled, he said.

There are also some signs that deepwater activity will be picking up. Energy industry analysts expect 40 deepwater rigs will be in the Gulf this year.

Weinstein said he is pleased that there are more rigs in the Gulf.

“One assumes that if more rigs are coming to the Gulf, a number of them will be involved in new drilling, which will lead to more production,” Weinstein said.

And more deepwater rigs means more jobs.

Deepwater projects have a larger economic impact, employing more people and generating more jobs to support the workers and the rigs. A deepwater rig might employ anywhere from 180 to 280 people, while a shallow-water rig needs 75 to 85 workers, according to the Louisiana Mid-Continent Oil & Gas Association.

Port Fourchon Executive Director Chett Chiasson said there has been a huge increase in investment and preparations by deepwater companies for activity expected this year and next.

Interest is “through the roof” in port properties, Chiasson said.

Guidry Bros. Inc. is investing $15 million to $25 million in a new facility, Chiasson said. Chouest Shorebase Services is developing an existing 71-acre lease.

The Greater Lafourche Port Commission, which operates the port, has begun a 400-acre expansion at Fourchon, Chiasson said. The expansion includes a 7,000-foot slip that will create around 15,000 feet of waterfront when fully developed.

Chiasson said there are a couple of reasons for the increased activity.

Companies have a number of projects that are large enough to require the additional space, he said.

And the huge levels of oil in these new discoveries mean that energy companies are going to have to explore and drill those leases.

LeBlanc said the state’s work with federal regulators has helped give energy industry members a clearer understanding of regulatory issues and how better to meet regulators’ requirements.

The governor and Natural Resources Secretary Scott Angelle had more than 50 conference calls with industry and federal regulators and met more than 30 times with regulators, LeBlanc said. The result is that things are better now than they were two years ago or even last year, but there is definitely room for improvement in the regulatory process.

Weinstein said the complex regulatory system enacted after the Macondo explosion is still hampering the industry’s efforts to restore production in the Gulf.

Before the Macondo disaster, it took an average of 50 days for a drilling and exploration plan to win approval, according to Weinstein’s report. Since then the average has risen to 207 days.

Nye also said that communications with regulators have improved.

As a result, Nye said, the industry has a little more certainty about what’s going to happen — the Bureau of Ocean Energy Management is now finalizing a five-year lease plan — as regulations and plans go through the draft process and are then released.

“For a while there, pretty much all communication had stopped,” Nye said.

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