Jobs: Shale States vs Non-Shale States

Tyler Durden's picture

Consider: lower oil prices unequivocally "make everyone better off", Right? Wrong.

First: new oil well permits collapse 40% in November; why is this an issue? Because since December 2007, or roughly the start of the global depression, shale oil states have added 1.36 million jobs while non-shale states have lost 424,000 jobs.

 

 

*  *  *

This should help clear things up.

According to a new study, investments in oil and gas exploration and production generate substantial economic gains, as well as other benefits such as increased energy independence.  The Perryman Group estimates that the industry as a whole generates an economic stimulus of almost $1.2 trillion in gross product each year, as well as more than 9.3 million permanent jobs across the nation. 

 

 

The ripple effects are everywhere. If you think about the role of oil in your life, it is not only the primary source of many of our fuels, but is also critical to our lubricants, chemicals, synthetic fibers, pharmaceuticals, plastics, and many other items we come into contact with every day. The industry supports almost 1.3 million jobs in manufacturing alone and is responsible for almost $1.2 trillion in annual gross domestic product. If you think about the law, accounting, and engineering firms that serve the industry, the pipe, drilling equipment, and other manufactured goods that it requires, and the large payrolls and their effects on consumer spending, you will begin to get a picture of the enormity of the industry.

Now put this in reverse if and when the bulk of new US energy is mothballed or worse, dismantled.

So, is Stan Fischer's "not very worried" remark about become the new Ben "subprime contained" Bernanke of the last crisis?

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Barnaby's picture

"Every oil and gasshole has either left with his tail between his legs, or has set up tent pegs in the Dakotas for a cold, hard winter ahead." - Grand Junction, Colorado, 2014

PS: they can go fuck themselves.

XqWretch's picture

I cant help but laugh at how many idiots bought into this "Oil will be at $100 a barrel forever!" bullshit. It was obviously unsustainable and all the muppets that invested in shale oil tech that is only profitable when oil is inflated deserve to get burned. Anyone with an IQ of 50 or above can see that oil was obviously in bubble mode: http://www.fedprimerate.com/nymex-crude-oil-future-chart.gif

James_Cole's picture

Gawd zh has gone to shit.. Hope the money is good tylers. 

Prisoners_dilemna's picture

Fischer declares US Oil Industry Too Big Too Fail.

venturen's picture

lucky them...unlimited access to printed trillions!

MalteseFalcon's picture

Cheap oil and gasoline are still a boon for 95% of America.  Yeah there are some "non-winners" now. 

Previously the current "non-winners" had a 6 year long ride in a non-economically-viable vehicle cushioned by free FED bucks.

When the FED writes hot checks, jobs and profits can be "created".

Either American is going to get off of FED heroin, or we're not.

The energy sector is the perfect place to start.

Pool Shark's picture

 

 

"Simply put, this means 9.3 million, or 93% of the 10 million jobs created since the recession/depression trough, are energy related."

 

And , to make matters worse, Obama just granted amnesty to more illegals than the entire total of all jobs created since he took office.

 

This isn't going to end well...

MalteseFalcon's picture

Cheap oil and gasoline are still a boon for 95% of America.  Yeah there are some "non-winners" now. 

Previously the current "non-winners" had a 6 year long ride in a non-economically-viable vehicle cushioned by free FED bucks.

When the FED writes hot checks, jobs and profits can be "created".

Either American is going to get off of FED heroin, or we're not.

The energy sector is the perfect place to start.

wrs1's picture

Where was the Fed and QE in 2008 when oil hit $147/bbl?  Sorry but your argument about the FED paying for the oil sector is just nonsense.  It's pretty clear where the FED put it's money and none of it went to non-financial sectors.

KnuckleDragger-X's picture

Oil is a strange beast and there are so many ways to distort the market but I'm waiting to see what Russia does since they know how to fight dirty and they can start shipping arms to people that hate the Saudi's etc.

Bell's 2 hearted's picture

couple this with subprime auto loans going bad ...

Skateboarder's picture

I do not trust any jobs and employment figures.

disabledvet's picture

Neither does the Governor of my State.

angel_of_joy's picture

It looks like a lot of people will really need those low gas prices... mostly because they won't have any fucking job.

donsluck's picture

Being unemployed I found myself starting my car about once a week. Low gas prices are irrelevant to the unemployed (if smart).

Billy Sol Estes's picture

What about jobs made by Anhydrous Ammonia Farmers?

Used to be worth something in the 60's...

KnuckleDragger-X's picture

Ammonia production relies on natural gas for the energy source. The EPA is a bigger danger to them.

XqWretch's picture

Theyre pushing a product at unsustainable prices, much like the health care and higher education industries, and the only way they will stay alive is through loose monetary policy. Let all this shit crash and burn already so we can return to some sense of a free market. "Capitalism without bankruptcy is like Christianity without Hell" -Kyle Bass

Glass Seagull's picture

 

 

"these lower oil prices will benefit EVERYONE..."

said Stanley Fischer as he nervously bot loads of spooz in the SOMA account

JustObserving's picture

But it is patriotic to lose your job to cause pain to Putin.

only regret that I have but one job to lose for my country

Oh wait, I have three part time jobs to make ends meet.

WTFUD's picture

I believe China when they tell us that USSA GDP is way exaggerated. This would tie in with Mr FedRes's intervention in MARKITTS.
Sometimes i wonder if the folks on the Hedge who paint a bleak picture of the REAL economy have all the facts as things are much worserrerr.
Just think of all that toxic slush on financial ledgers worth cents on the dollar.

The HORSE you rode in on Barry!

Winston Churchill's picture

Its getting bleak out there.

Definite drop off  in enquiries , let alone orders placed, in the last three months.

I will be laying of people right after Christmas, if things don't perk up.No overhead left that can be cut.

Even my oligarch clients are now getting wary of spending.

swmnguy's picture

My wife's from North Dakota, just outside the oil patch.  The relatives still out there aren't seeing any benefit at all.  The roads are being destroyed by overweight trucks.  Housing prices are skyrocketing to Manhattan levels, but non-oil wages are stagnant.  Hookers, junkies and drug dealers all over the place.  Law enforcement is completely overwhelmed.  And the oil money bought the politicians to make sure all the profits are safely privatized, while the enormous costs, which are still barely perceived, will be imposed on the taxpayers of a state of 600,000 people.

Yeah, they're fucked.

I know a few people from the Minneapolis area who own their own trucks who go up there to make money.  They sleep in their cabs, guns drawn, and get out of there as often as they possibly can, wisely not having moved there.  Those people are making some extra, temporary, bank and they'll be about the only ones who don't get burned, assuming they aren't killed by drunks or junkies or corner-cutting profiteers who completely disregard basic safety standards.

 

donsluck's picture

Typical social reaction to resource extraction industry. Boom/bust should be resisted by political leaders. This can be accomplished with existing permitting processes. How un-Libertarian!

Barnaby's picture

There you go, just like my beloved Colorado.

Resist.

Resist now.

forwardho's picture

Well, thats it, a great big circle.

We exist it seems, only to pull the crud out of the earth, so we can then burn it.

A planetary civilization solely devoted to the burning of a stored energy source.

I somehow thought there was more to it.

starman's picture

The future is bright you can work as a bartender or an oil digger! 

 

nakki's picture

I learned years and years ago that when someone gets the tag of being an "expert" on something that the exact opposite is true. All we ever get from most so called "experts" is the same old clichés over and over again. Shale boom good for the US keeping "our" resources at home, creating American Jobs. Obviously these experts can't really believe that its "OUR" oil, and obviously me saving $60 a month doesn't amount to squat when Trillions of $$ have been printed in the last 6 years. The amount of jobs lost however could be significant, along with the bust in loans, and defaults. I guess its all going to plan as the next bailout is just around the corner. Mr Fisher is just another overly intelligent moron spewing clichés about consumers (after all that's all we are) and how we will all pump that extra $$ into consuming more shit made in China from oil.

noben's picture

Given the expected drop in Shale States, when will the Twains meet?  Soon, I'd expect.

Long Shale States and its ex-DOD, ex-CIA, ex-NSA people/folks to... 'favor' exothermal kinetic activities in Saudi Arabia:  Bad-a-Bing, Bad-a-Boom!  Directly or indirectly. 

More than pricey wine or oil could be spilled in KSA, I expect.  Given that there truly is no love lost between the people & cultures in both countries.

p.s.  Our compromised Gov might not prosecute the Saudis, but the People of America won't forgive or forget who did 9/11:  Saudis.  Whoever enabled, aided or abetted is a separate issue to be dealt with, but the Saudis and their Wahhabi nutjobs are front and center for the inevitable Just Retribution -- I'd imagine.  Payback's a biatch.

Harbanger's picture

Modern culture is really an extension of the counter-culture started in the 60's.

Bell's 2 hearted's picture

maybe we can rely on exports

 

2010 SOTU:

 

Third, we need to export more of our goods.  (Applause.)  Because the more products we make and sell to other countries, the more jobs we support right here in America.  (Applause.)  So tonight, we set a new goal:  We will double our exports over the next five years, an increase that will support two million jobs in America.  (Applause.)  

http://www.whitehouse.gov/the-press-office/remarks-president-state-union...

 

oops, King Dollar rolling ... DXY back near 89

venturen's picture

What the heck Obama told me the whole economy was going to be renewable jobs using free power sources! Al Gore did too..

Kreditanstalt's picture

Surprised?  "The rich" are not all banksters.  They're your neighbours too.

Since the START of The Great Recession you've done well IF you're in some government-monopoly-granted resource industry, a government employee, or some highly-paid grunt with technical skills (machinery, drills, lathes, engine repair, engineering &c.).  You never lost your job.  You've got seniority increases, lots of O/T, pay rises.  Benefits.  Pensions.

This group spends BIG.  Boats, campers, RVs, flatscreen TVs, cell phones for the kids, vacations, Netflix...

They drive consumer spending AND government revenue.  They are coddled, loved and pampered for that reason.

The other 80% of us?  Not so well 

Harbanger's picture

What you describe is the shrinking middleclass, they only need a handful of them to service the elite.  The whole point of our leftist 2 class political system is to redistribute the wealth of the middle class to the FSA who are a solid voting block and to the elite campaign donors who finance the politicians.

Yen Cross's picture

     Texas exceeds California by [9.5-X] in production and exploration.

  Texas population = 26.45 million (2013)

  California population= 38.33 million (2013)

   That's roughly a 30% population difference. That means there's still  60+ % disparity in the energy sector. My guess is that other energy producing states have similar disparities when recalibrated to Texas and California

   $60.00 crude and the usdx at 89+. lol

 

 

fledermaus's picture

I had to log in to this one.  FUCK you Author. FUCK you oil industry. I see Exxon is advertising boiling an egg commercials.  Are we the frogs being boiled slowly with bullshit?  After making so much money for so many years allowing the derivitive futures market in oil an indutry where the product was so vital to our economy, but allowed to be manipulated and not take delivery, yet consumers paid at the pump for it for years and years.  I say fuck you! this needed to happen as inflation is ALL over the place EXCEPT this now.  NO one comes to the aid in other industries when cyclical changes happen.  WHo allowed this shit... It's about jobs man!  I cry bullshit.  It's about Exxon and other thieves profits!

Zerozen's picture

Yeah man, screw those guys and their profits! How dare they get a 5% profit margin! Nationalize all the oil companies!

fledermaus's picture

I know right?  FUCKING biggest company in the world or #2 depending on the quarter.  And oil is a commodity. Not intellectual property or an invention/patent.  Try getting to be the #1 or #2 biggest market cap off selling a commodity... how do you do that? Tell me Mr. 5% profit margin!? and this is just one oil company Exxon

http://en.wikipedia.org/wiki/List_of_public_corporations_by_market_capitalization

You said nationalize not me. I see not even a full 3 months of lower gas prices and the article (and trolls) come out in favor of higher oil prices etc...

Fuck you you shill for the status quo.

reTARD's picture

$60 oil will change that! Now there's hope and change, bitchez! LOL.

Crtrvlt's picture

the 9.3 million number is not the jobs created since the trough, it is the total jobs in the industry since forever

yrbmegr's picture

As cheap as oil is, bullshit is even cheaper.

yrbmegr's picture

Just a thought.  Why don't we raise the SPR?

dogismycopilot's picture

Strange, the Saudis were complicit in the murder of 3,000 Americans in 2001 and now they are trying to murder the US Domestic Oil and Gas Industry. 

We should have invested all the money we spent in Iraq and Afghan in US oil and gas production in 2001 and left the Saudis to reap the whirlwind of their extremist culture.

Even stranger to see many here supporting the Saudis. 

billybobtx's picture

If you want your $100 oil, you can keep your $100 oil...

orangegeek's picture

lower oil because the inventories are bloated and consumption continues to fall

 

higher oil prices?  in the land of "yellen does the buying" and with the world on full retard, sure why not?