A Tale of Two Technologies

There was a telling juxtaposition in the news yesterday. On the one hand, Energy Conversion Devices became the latest green energy company to flirt with bankruptcy, after benefiting from stimulus spending. On the other, oil and gas giant Anadarko announced that it would invest $1 billion annually to tap the Wattenberg field, part of the Niobrara shale formation in Colorado.

Such investments are fuel to the engine of job creation. A decade ago, the Niobrara shale deposits would have been worthless, because we couldn’t get the oil and gas out of the ground. But that changed thanks to two technological breakthroughs—horizontal drilling and hydraulic fracturing.

In fact, these two innovations are allowing for the recovery of big oil and gas plays across the country, which is why the industry is a leading job creator. Earlier this month, Reuters reported on a new analysis from the U.S. Bureau of Labor Statistics showing that jobs related to oil and gas drilling account for one in five of all net new private sector jobs in the United States since 2003. And according to a recent report by economics consulting firm EMSI, nine of the top eleven fast-growing jobs in the nation are in the oil and gas sector.

None of these jobs are predicated on government subsidies or mandates. Contrast this with the renewable energy industry, which exists only by the grace of political favoritism. As a result, no green job is safe. When the political winds shift, and the handouts are withdrawn, the jobs made possible by the subsidy disappear. Don’t take my word for it. The American Wind Energy Association warns that the wind industry risks losing 75,000 jobs overnight, if the Congress fails to extend the production tax credit at the end of this year. These jobs would vaporize due to the loss of a single subsidy, despite the fact that more than 30 states have mandates that guarantee demand for wind power. The renewable industry’s fundamental frailty is precisely why the Obama administration is coming to regret gambling almost $70 billion on green jobs in the 2009 stimulus.