Perry energy jobs may take years to create

@CNNMoney October 15, 2011: 10:30 AM ET
perry, energy, jobs

Rick Perry says the energy industry could create 1.2 million jobs.

NEW YORK (CNNMoney) -- Texas Governor Rick Perry says he would kick start economic growth by unleashing the energy industry.

His plan, unveiled Friday, calls for creating 1.2 million jobs by tapping unexplored supplies and loosening regulations on oil and gas producers.

"I believe one of the quickest ways to create jobs and restore investor confidence in America is to expand energy production in America," the Republican presidential contender, who plans to roll out other parts of his economic plan in coming days, said in his proposal.

But there's at least one big problem with Perry's plan ... it could take years for these jobs to materialize, energy and labor experts say.

"It's not going to be overnight," said David Dismukes, associate executive director for the Center for Energy Studies at Louisiana State University. "These are big capital-oriented investments. People don't turn on a dime with these investments."

Perry plan: More drilling, more jobs

The heart of Perry's plan is to open oil and gas fields for exploration that are currently off limits. This includes drilling in the Gulf of Mexico, Alaska, the mid-Atlantic and the American West.

He estimates opening up Alaska alone could create 120,000 jobs, while ramping up production in the Gulf could result in another 230,000 positions.

Perry stressed that he would speed the process because he could largely cut Congress out of the system. He would accomplish much of his goals through executive orders and by "getting the EPA out of the way."

"It can be done without being mired in Washington gridlock, because a president has all the authority he needs to roll back intrusive regulations, create energy jobs and make our nation more secure," he said.

But his proposal also acknowledges that creating the bulk of these jobs will not be so speedy. For instance, Marcellus shale development in Pennsylvania could create up to 250,000 jobs. But it would take until 2020 to hit that number. Same goes for the 500,000 jobs in the American West.

Other jobs could materialize sooner. Approving the Keystone XL pipeline project could create 20,000 jobs immediately, while the Gulf could add 230,000 jobs next year if more permits are granted.

Perry's job figures are backed up by the American Petroleum Institute, which last month released a report that showed the industry could create as many as 1 million jobs. These include direct energy jobs, as well as indirect jobs, such as trucking and suppliers.

The trade association estimates it would take until 2018 to do so, because it takes time to arrange the leases for the development area and get a drilling project up and running.

Another concern is that many of these positions are short-term construction jobs.

"Once the well is drilled, the demand for labor goes away," said Robert Kaufmann, chair of the Boston University Department of Geography and Environment. "Overall, it's relatively few jobs."

Energy companies, however, often develop one well after another, so the jobs would transfer to the new location, said Rayola Dougher, an institute spokeswoman. And if the regulations are loosened, it could stimulate even more production.

"I don't know any other industry that can bring this quantity of jobs to the market," she said. "We have the potential that's not being realized and it could be."

Energy producers would also likely ramp up activity if the threat of higher taxes and stiffer environmental and permitting regulations were removed by a president sympathetic to the industry, Dismukes said. Getting rid of the uncertainty would go a long way to creating more jobs.

It's not surprising that Perry is linking the country's economic fortunes to the energy industry. It's been a big contributor to the success of his state, which is the nation's largest producer of oil and gas.

Since November 2009, the oil and gas extraction industry has created 48,500 jobs, or 12.6%, in the Lone Star State, according to the Dallas Federal Reserve. It's enjoyed the fastest growth rate of any industry by far.

In coming days, Perry said he will unveil a "complete economic growth package" that will address tax and entitlement reform, as well as spending reductions. To top of page

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