Yesterday, the Obama administration announced its rejection of TransCanada’s proposed Keystone XL pipeline that would have traveled from the Canadian oil sands to the U.S. refineries in the Gulf of Mexico.

In the State Department press release, the administration blames Congress for forcing him to make a decision, claiming the administration simply does “not have sufficient time to obtain the information necessary to assess whether the project, in its current state, is in the national interest.”

Therefore, the administration deemed the construction of Keystone XL “not to serve the national interest.” Really? The construction of this pipeline was set to create 20,000 jobs for Americans. It would have secured a source of much-needed oil that may not be domestic, but at least sourced from Canada, our neighbor and great ally. The completion of this pipeline also would have helped America’s independent producers, who face a backlog in the transport of their oil from Cushing, Oklahoma.

Additionally, the press release even indicates that the president has had four years to review the Keystone permit: “since 2008…been conducting a transparent, thorough, and rigorous review.” That’s when President Obama was elected! Four years is still not enough time?

This flat-out rejection of American jobs, energy security, and economic development is sure confirmation of the administration’s animosity toward the oil and natural gas industry and demonstrates the chokehold that the President’s environmental base has over the administration. The labor unions, a huge base of the Democratic Party, are up in arms over this rejection of jobs. Canadian Prime Minister Harper expressed his “profound disappointment” of President Obama’s decision.

Once again, the administration puts pressure from its environmental base over the needs of the American people. In a struggling economy, the fact that the President puts concerns of radical, anti-development activists over blue collar Americans who would have benefited from the well-paying Keystone XL pipeline jobs is truly shameful.

The major media outlets are all reporting on the economic good news of 2011, the real stimulus sweeping the nation:  Despite the recession, the oil and natural gas industry is providing jobs, tax revenue, and economic growth in communities across the United States.

“Sure enough, money is flowing by the barrelful into Mountrail County, transforming a tiny community once proudly situated in the middle of nowhere into an unexpected oasis of prosperity at the heart of the nation’s biggest oil play…With the unemployment rate at only 1.3 percent, local sons and daughters are no longer leaving to find work. (New York Times)

“As the rest of the nation watched incomes drop or stagnate, in Mountrail County median income rose more than 50 percent in the last decade, the fifth-highest gain in the nation. Residents earned on average an additional $20,000, adjusted for inflation, according to an analysis of census data by Andrew A. Beveridge, a demographer at Queens College in New York.” (New York Times)

“A Pittsburgh-area school district gets $628,000 for lease with oil and gas drilling company…Phillips Exploration’s lease with the South Butler School District also carries an 18 percent royalty from any gas that is produced and sold from the acreage.” (Associated Press)

“Chemung and other counties in the state’s Southern Tier where shale gas is assumed to be plentiful can expect a surge in retail sales and tax revenue from those workers once drilling begins…Last year, Chemung led all New York counties in the growth of sales tax and hotel tax revenue, as well as in the expansion of its tax base, avoiding the property tax increases and economic doldrums faced by local governments elsewhere in the state.” (New York Times)

“In northeastern Ohio, oil companies from across the U.S. are setting up shop, developing wells and putting people to work, trying to get the oil out of the sedimentary rock.” (Fox News)

“People who have opportunities in many other places in the country or elsewhere in the world have elected to come to Ohio and seek opportunity here, that tells me that people who are making very rational decisions spending shareholder money are coming to the conclusion that this is worth chasing.” (Fox News)

“The boom in low-cost natural gas obtained from shale is driving investment in plants that use gas for fuel or as a raw material, setting off a race by states to attract such factories and the jobs they create. Shale-gas production is spurring construction of plants that make chemicals, plastics, fertilizer, steel and other products. A report issued earlier this month by PricewaterhouseCoopers LLC estimated that such investments could create a million U.S. manufacturing jobs over the next 15 years.” (Wall Street Journal)

Today, Ohio Treasurer Josh Mandel’s must-read op-ed ran in the Wall Street Journal. The article highlighted the amazing opportunities the Utica shale play grants for Ohio and the major roadblocks from Washington that seek to threaten them. Josh Mandel is also running for the U.S. Senate in Ohio.

Clearly Mandel understands that the oil and natural gas industry is a major jobs creator and that other industries ranging from manufacturing to construction to service industries also reap the benefits. Unfortunately, the Obama administration has halted the sale of drilling rights in Ohio’s national forest. And by one estimate, the article says, the administration has killed or threatened more than 200,000 jobs.

Here are some highlights:

JOBS

“The Ohio leases would have included parcels in three counties badly hurting for jobs…A September study for the Ohio Oil & Gas Energy Education Program found that production in the Utica shale formation has the potential to create more than 200,000 Ohio jobs by the year 2015.”

MANUFACTURING

“Along with Republic Steel, U.S. Steel has also announced new jobs and expansion in Ohio, in its case to meet demand for steel piping created by shale exploration. Vallourec & Mannesmann plans to build a plant in Youngstown, breathing new life into the heart of the rust belt. The Canton-based steel manufacturer Timken recently said that its planned expansion is motivated in part by strong sales to oil and gas companies, which make up 20% of the company’s sales.”

CHEAPER ENERGY

“Exploration in the Utica shale could also mean cheaper utility bills for consumers. A Pennsylvania State University study published in July found that natural gas prices there dropped by 12.6% in 2010, saving consumers $633 million. The U.S. Energy Information Administration says that summer 2011 natural gas prices in the Northeast were 2%-15% lower because of increased shale production.”

Please click here to read the full article.

Yesterday, IPAA’s immediate past chairman and Swift Energy president Bruce Vincent appeared on Fox Business Network’s ‘After the Bell’ to discuss the critical and growing role that job-creating American oil and natural gas production continues to play in driving economic growth while also strengthening our nation’s security. Vincent notes that at current rates, forecasts show that by 2017, the United States can be the world’s largest oil producing, making America “less dependent on foreign sources, which actually enhances national security as well.”

Bruce said it better than I can, so without further ado, here is the video below.

ConocoPhillips Chairman and CEO Jim Mulva’s op-ed was published in today’s Wall Street Journal. He zeroed in on the job creating power of natural gas that is already re-energizing our nation and the potential jobs if this resource is properly unleashed.

IHS Global Insight has estimated that “more than 600,000 Americans already explore, produce, store and transport natural gas” and that another “2.2 million jobs are sustained indirectly by the incomes of natural gas workers, or in companies that service the industry.” Mulva highlights the great plays of the Marcellus in the East and the Barnett in Texas to showcase the transformative effects of natural gas’ job creation.

Mulva also pointed out that natural gas is a clean – and abundant – energy source. The development of natural gas provides Americans with a low cost, environmentally friendly source of energy. For example, Mulva points out that compared to coal, natural gas yields half the carbon dioxide, uses 60 percent less water, and producers no coal or ash. This should please environmentalists and consumers alike.

A new study released today from the University of Maryland backs up Mulva’s “clean claims” regarding natural gas. The study found that natural gas extracted from shale deposits for electricity production is better for the environment and air than coal. This can also be added to the list that discredits the controversial Cornell study which asserted that coal is more environmentally friendly than natural gas. Nathan Hultman, director of Maryland’s Environmental Policy Program, reiterated that “arguments that shale gas is more polluting than coal are largely unjustified.”

In order for natural gas to create 1.5 million jobs by 2030, Mr. Mulva outlined four main policy recommendations for the government:

“First, governments must stop singling out the oil and natural gas industry for tax increases. Its effective global tax rates already far exceed those of other industries.

Second, when considering new natural gas regulations, government should first assess the adequacy and enforcement of the thousands of existing federal, state and local regulations that already govern production. Duplicative or conflicting requirements add little protection but needlessly increase costs and further stifle the economy.

Third, government must open new areas to exploration, while ensuring sound environmental stewardship.

Finally, although all energy sources are needed, government mandates that force electric utilities to use renewable energy sources such as wind and solar are mistaken.”

However, Mulva also pointed out the natural gas industry’s responsibility to “demystify its work” through educating the public on development techniques and the regulations already in place that ensure environmental protection. In other words, a proactive industry approach to public relations is crucial to developing America’s abundant natural gas successfully and unleashing amazing job potential.

There’s nothing “un-American” about this policy proposal.

With election season almost in full swing, you hear alot of political battling over which candidate or party is truly “fighting for the middle class.” Underneath the political rhetoric on the campaign trail and in Washington, one thing is indisputable. The oil and natural gas industry is changing the lives of middle class people. Let’s hear a few stories.

Colorado:

Rick Davis and mother Ruth Davis: Rick’s father, Joe, told them stories from years ago of Coloradoans striking it rich after oil and gas were discovered underneath their property. He never gave up on that possibility—advising his family to hold onto those rights. Now, years later, Rick and his 88-year old mother Ruth have leased their land to oil and gas to “follow Joe’s dream.” (New York Times)

Ohio:

Cory May: A young veteran and native of eastern Ohio, Cory’s mother is a janitor and his father is an unemployed machinist. For years, Cory (pictured above) thought his only career option for years was either the military or a minimum wage job in a factory. Until the natural gas industry rolled into Ohio and “changed his prospects.” Cory took a two week shale exploration course that upon completion, qualified him to apply for industry jobs. Now he has taken a job cementing wells for Halliburton that pays well above the minimum wage — $60-$70K a year!  “It blew my mind, really. I was like – what? It’s [the industry] coming here? It’s kind of unheard of, really.” (Associated Press)

John Riggs: John works on the drilling rigs in Carroll County, Ohio: Over the roar of engines, he yells, “The benefits are good. They treat you right. Where else are you going to find a job working six months a year making one hundred grand?” (The Plain Dealer)

Donna Sauer: The sleepy town of Carrollton, Ohio in which Donna has lived and owned Donnna’s Deli for years, is all of a sudden fresh with activity, excitement, and – customers. She calls the roughnecks, engineers, and surveyors (her new customers) “the gas guys” and describes them as really the “nicest people…extremely courteous.” The oil and natural gas industry and the residents have a mutually beneficial relationship. Donna describes, “We’re happy they’re here, and they’re happy to be here.” (The Plain Dealer)

Monica Wetherell: The Wetherell’s family property in the hills outside of smalltown Stuebenville is on land which has natural gas reserves. Once used as a dairy farm, it will soon be leased to a drilling company for one million dollars. “It’s peace of mind … knowing that when the money comes we’ll be able to put money away for college for the kids, pay off some debts.” (ABC News)

North Dakota:

Barb Russell: A 60 year old grandmother from Farmington, Barb moved to the oil fields of North Dakota to improve her job prospects. Barb sure did—in the form of a tripled income. She now uses her prior experience as a school bus driver to bus Halliburton workers to the drilling rigs every morning. (Star Tribune)

Mark Luna: An unemployed electrician from Phoenix, Mark started sending resumes to Bismarck, North Dakota when he heard about the Bakken boom. In Arizona, “it took 30 days just to get a call back…Here, it took only a week” – to get an offer. Two weeks later, Mark moved with his family to North Dakota. (ABC News)

Last week, the Ohio Oil and Gas Energy Education Program (OOEGEP) rolled out a study which projected the economic impact of the vast oil and gas reserves in Ohio.  The study demonstrated that in just four years, more than 200,000 jobs would be created due to industry drilling, exploration, leasing, and royalty revenues from the Utica shale play. Thus, the oil and gas in Ohio means a $12 billion increase in overall wages and a $22 billion increase in economic output for the state of Ohio.

Like the IPAA analysis projected in August, the Utica shale play is going to be a game-changer for Ohio. Since then, here’s what folks have been saying:

Ohio Governor John Kasich at Columbus energy summit last week: The Utica “means that people in the eastern part of this state, who have been living in many ways in poverty with the shutdown of great industrial production in Ohio, they may have another chance.”

“When you think about Marcellus and particularly Utica shale in the eastern part of this state, it’s unbelievable.”

Mark Mills, Forbes contributor said in Buckeye Oil Billions Will Unleash an Ohio Manufacturing Tech Boom: “A prediction.  The Ohio Valley is on track to become a hotbed of innovation.  And one which will almost certainly focus on 21^st century manufacturing.”

Ohio State Representative Jay Hottinger in the Newark Advocate: “Instead of raising the tax burden on Ohio’s hardworking families, the government can fund operations by utilizing [oil and natural gas] right under our feet. I am a strong supporter of such commonsense solutions that allow Ohio to help itself.”

Ohio is on the verge of an economic revival. Towns which have been struggling for decades since the flight of manufacturing are about to wake up and smell the oil–oil that can now be accessed due to cutting edge industry technology. That’s a real reason to be energized.

In remarks this evening before a Joint Session of Congress, President Obama repeated his interest in raising taxes on oil and natural gas companies as a means of addressing the federal deficit. In response, IPAA President and CEO Barry Russell released the following statement:

“It is unfortunate that, at a time of historically high unemployment and nominal economic growth, the President would once again propose raising taxes on America’s oil and natural gas producers.

“The President’s recommendations for improving transportation and the nation’s infrastructure fail to recognize the energy required to make these programs successful.  It will require oil and natural gas — which should come from American resources.  Instead, he calls for taxing our nation’s oil and natural gas industry, one of the few industries that actually is creating jobs today.”

“Contrary to popular belief, the tax proposals laid about by the President would not chiefly impact ‘Big Oil,’ but rather the 18,000 independent oil and natural gas producers in the United States who on average employ only 12 workers. These companies drill 95 percent of the nation’s oil and natural gas wells and account for 67% of total domestic production of these resources.

“The oil and natural gas industry as a whole generates more revenue for the federal government than any source other than income taxes, paying an effective federal rate of 48% plus substantial state and local taxes. In fact, a recent study by IHS Global Insight showed that independent producers could generate $930 billion for state, local, and federal governments in the form of taxes, rents, and royalties over the next decade, as well as support the creation of approximately 900,000 new jobs. The President’s proposal to raise taxes, however, would only generate an estimated $30 billion, while also crushing jobs and significantly weakening America’s ability to produce its own energy.

“If the President is truly interested in reducing the deficit and creating jobs, he needs to recognize the important role that independent producers can continue to play in fueling a short-term recovery and a long-term revitalization of America’s struggling economy. Calling for a series of shortsighted tax hikes, however, will move this country in the opposite direction, and will result in fewer American jobs, larger deficits, and an even greater dependence on foreign, unstable regions to meet our growing energy needs.”

Tonight, in front of Congress, President Obama will announce his much-anticipated jobs plan. The cost of the plan is set at $300 billion, much to the chagrin of many lawmakers in Congress who want to scale back the government’s spending spree due to a deepening national debt. 

In Detroit last week, President Obama gave a preview of his plan in front of labor union members, which includes putting people back to work through government-funded construction projects reminiscent of the stimulus package. Later in the speech, he called out Republicans in Congress for defending the historic tax structure for oil and gas companies: “…you say you’re the party of tax cuts?  Well then, prove you’ll fight just as hard for tax cuts for middle-class families as you do for oil companies and the most affluent Americans.” In fact, these lawmakers are actually helping middle class families.  The historic tax structure encourages private American investment and, consequently, American jobs. Read how repealing the tax structure for American oil and natural production will cost this country.

It’s puzzling that President Obama continues to target the oil industry, considering it’s one of the few bright spots in this dismal economy actually creating a large amount of well-paying jobs. The oil and natural gas industry could be an even larger pillar for job creation if the President changes his administration’s course on energy policy. John Schiller, chairman and CEO of Energy XXI, targeted the problem, saying “if the government would get out of the way, from a regulation standpoint, and let us [XXI] do what we do good, you’ll see us continue to hire and grow this economy.”

Meanwhile, Americans are echoing this frustration at the administration. President Obama’s job approval ratings are at an all time low of 38 percent, numbers which came in the wake of news that no new jobs were created in August and unemployment remains at 9.1 percent, despite White House forecasts that it would drop to 8.3 percent in 2012.

Yesterday, a Wood Mackenzie study revealed that policies that expanded drilling in the United States would create over 1 million jobs by 2020. The study looked at the effects of policies which would loosen regulatory restrictions on drilling to open up vast areas of resource-rich land for development—land that is now off-limits. It included policies that would speed up permitting in the Gulf, open up New York for shale drilling, and approve the Keystone Pipeline XL. Not only would jobs be created, but the government’s own bank account would be replenished. The study estimates that wider development would add $36 billion in new revenue by 2015 and $803 billion by 2030. The study reported that in addition to jobs, these policies would produce an additional 1.27 million barrels of oil-equivalent (BOE) per day by 2015 and 4.19 million BOE in 2020. This goes a long way to increasing our energy security and minimizing our dependence on foreign oil—two goals President Obama says he supports.

IPAA, along with an array of industry groups, sent a letter to Obama that called for faster offshore oil and gas permitting in his plan for jobs. We’ll see if Obama’s jobs plan does indeed include a responsible energy policy that develops our rich resources and puts Americans back to work or if he will continue targeting and demonizing the very companies that are keeping this economy afloat. The American people—desperate for work—will be watching.

In the context of a sinking economy, President Obama announced the appointment of Alan Krueger as his top unemployment advisor in the president’s forthcoming jobs plan set to be revealed next Thursday.

In response to this, IPAA released an analysis of the Federal Reserve Board’s (FRB) monthly index of industrial production. Our economic team detailed the percentage change from January-July of 2005 with January- July of 2011 of oil and gas related sectors compared with other industries. Here’s what they found.

Industries directly related to oil and natural gas production have a significant role in the Federal Reserve Board’s data – accounting for more than 10 percent of the overall value of the index.

 “As the chart shows, one of the few bright spots for output growth across industries has been the upstream (exploration and production) oil and natural gas sector. While the overall index has shrunk by 2.3 percent over the period, all the sectors shown for upstream oil and gas, including crude oil production, natural gas production, extraction of natural gas plant liquids, drilling, and oil and gas field machinery, have shown increases over the period. The index for natural gas production is up more than 20 percent, while crude oil production is up a lesser two percent, but notably reversing a prior decline.  Extraction of natural gas liquids rose more than 16 percent.  The increases for drilling services (up more than 16 percent) and “mining and oil and gas field machinery” (which nearly doubled) further reflect the robust role of oil and natural gas production.”

If Alan Krueger is interested in job creation, he must look at what the oil and natural gas industry is already doing to create jobs and grow the economy. Unfortunately, IPAA revealed that Krueger is no friend to the oil and gas industry: During his tenure as assistant secretary and chief economist at the Treasury Department, he said this: “policies [such] as a cap-and-trade system or investing in clean technologies are a more effective way to reduce our vulnerability to an oil price shock and promote energy security than are tax subsidies that encourage oil companies to extract more oil from the ground than is economically justified without such subsidies.”

A cap and trade system which is in fact, a tax on energy, has been reviled by the American public. It is a poor excuse for energy or economic policy which would not only devastate the oil and gas industry, but would hurt the American consumer and greater economy as well. IPAA has also demonstrated that revising the historic tax code would target the investments of the independent oil and gas producers, and would cost this country—in terms of jobs, revenues for the government, and energy security. Please read the IPAA tax structure analysis for more information.

If policymakers like Krueger and Obama want to grow the economy through job creation, government spending, and consumer spending, they must look to the oil and gas industry, specifically the independents. To learn more about how independents promote economic growth in all three ways, please read the full analysis: Oil and Natural Gas Industry is Lifeline to Sinking Economy.