Tuesday, August 23, 2011

Energy Jobs Promise

Michelle Bachmann is promising cheap gas and millions of energy jobs. The hyperbole is absurd and sheds light on similar claims coming from the Marcellus Shale Coalition (MSC) and PA politicians in the back pocket of industry. The latest from Bachmann:

“What Barack Obama has done is lock up America’s energy reserves,” she said. “We’re the No. 1 energy-resource-rich nation in the world. We have more oil in three Western states in the form of shale oil than all the oil in Saudi Arabia. That doesn’t include the Bakken oil field in North Dakota or the eastern Gulf region or the Atlantic or the Pacific or Anwar or the Arctic region.”

She said the United States could tap its oil and gas supply to provide Americans with a cheaper, stable alternative.

“Energy could be one of the most stable, accessible forms of resources for business in the United States,” she said. “And we would create millions of high-paying jobs instantly.”

The sales pitch for a very liberal policy regime is energy independence, low prices at the pump, and an employment bonanza. None of the three will come true. The proof, particularly on the jobs front, is in Poland:

Recruiters are already actively in touch with Poles working in oil towns across the world, in Houston; Aberdeen, Scotland; Calgary, Alberta; and in Norway to persuade them to move back to Poland, Mr. Kostecki says. Some have been away for 30 years.

Meanwhile, Polish natural-gas monopoly PGNiG SA, which for decades was the only game in town if one wanted to work in oil and gas extraction in Poland, now has a poaching problem.

"Geofizyka Torun, [a PGNiG subsidiary] took everyone who applied [this year]," says Piotr Kurnik, the coordinator of the AGH conference and a third-year student at AGH.

The company is looking for surveyors and project operators, as well as title negotiators, who get the owners of concessioned land to allow companies to conduct their seismic readings on their property, whether through a sale of the land, a lease or some other arrangement. While Poland's government owns the rights to all the minerals under Polish territory, it doesn't own the land itself. Dealing sometimes with thousands of individual landholders means title negotiation over an area to be explored or exploited often moves at a snail's pace.

Business is picking up, but Geofizyka Torun is facing increasing competition as rival companies set up shop in Poland, bringing their own equipment to do seismic testing and hiring young professionals, says Sylwia Kowalska, a human-resources director at the company. But Geofizyka Torun offers to pay for its employees' lodgings and provides them with English classes, she says.

"We're seeing employees who left coming back," Ms. Kowalska says. "They miss Poland." She estimates that in May the company hired at least 70% more people than a year ago.

Geofizyka Krakow, another PGNiG subsidiary, does subcontracting jobs all over the world and recruits oil and gas workers in many different countries, including Pakistan, Egypt and Canada. But one of its toughest tasks is hiring people in Poland itself, says Filip Rieger, Geofizyka Krakow's chief recruitment coordinator. Those conducting mining-related work need permits from the State Mining Authority to do so. These permits are awarded for different grades of expertise, depending on age, experience and education. "In Poland, the required permits limit the pool of applicants," Mr. Rieger says.

Energy workers are being reshuffled. The jobs are going to established hands, just like they have in Pennsylvania. Perhaps the talent shortage appears in Calgary. New graduates from American programs might have to go to Canada (or Poland) to find work. Of course, producing a "qualified labor force" takes time. Even if Bachmann could deliver millions of jobs instantly, she'd have to open up the border to foreign born talent.

Bachmann is reusing the drill-baby-drill political gambit because it works. It worked in Pennsylvania. It seems to be working in Poland. The boldness of the fib doesn't matter. Just make sure you use big numbers, the more outrageous the better. That's the MSC playbook.

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