Once North Dakota was best known for the movie Fargo. Today, it’s a booming state with a strong economy and low unemployment because of the energy resources beneath its citizens' feet. North Dakota serves as a good lesson for other states. The infographic below shows the growth in jobs and population:
The North Dakota Oil Boom infographic
The Washington Examiner’s Byron York notes the political bind President Obama is in over the Keystone XL pipeline:
A brief moment on Wednesday showed why President Obama can't win when it comes to the Keystone XL pipeline. In front of the White House, protesters led by actress Daryl Hannah and the head of the Sierra Club demanded that Obama kill the project. Just a few blocks away, the head of the AFL-CIO's powerful Building and Construction Trades Department joined with the American Petroleum Institute to demand that Obama approve it.
Environmental groups have made the pipeline a centerpiece of their movement and are staking a lot on stopping it. 350.org's Bill McKibbon, told CNN, "We have to leave stuff in the ground, and that's what the Keystone fight is about." For the first time in its history the Sierra Club endorsed civil disobedience (i.e. getting arrested) in its attempt to stop the pipeline. That organization's Executive Director Michael Brune and President Allison Chin along with Hollywood actress Daryl Hannah and others were arrested after they chained themselves to a fence outside the White House on Wednesday. Reason's Ronald Bailey linked to the Friends of the Earth president Erich Pica bragging, "I was arrested for the first time in my life!" Thousands are expected to take part in a march against the pipeline on the National Mall on Sunday.
While Wednesday's protest was taking place, Sean McGarvey, President of the Building and Construction Trades Department, AFL-CIO was telling reporters why the Keystone XL pipeline should be approved:
There is no reason for any further delay.
In fact, there is every reason in the world to approve this project.
…
This has been the most scrutinized infrastructure project perhaps in our nation's history. And at every juncture, concerns about safety and the environment have been met and satisfied.
It is now time to build the Keystone XL pipeline and put thousands of Americans back to work.
Labor unions understand that construction and operation of the pipeline will create thousands of jobs—as many as 20,000.
Along with support from labor unions, there’s strong public support for the pipeline. A poll conducted for the American Petroleum Institute found that 69% of voters back Keystone XL. Mark Green at Energy Tomorrow adds that this finding is consistent with other polls.
In a few months, the administration is expected to make a decision. Will the President choose jobs and energy security, or will he again placate a small minority whose objective is to keep us from using the rich energy abundance below our feet?
In the State of Union Address, President Obama talked about helping American manufacturing create more jobs, and he talked about the important of increased energy development. I want to make the case that they’re intertwined.
America’s energy boom is playing role in revitalizing the manufacturing sector. Having abundant, affordable energy for their operations is the most obvious benefit from the shale boom, but there’s more to it. All the drilling rigs, pipes, tanks, and other materials to get energy out of the ground and move it to where it's needed have to be made. New investments are being made and new jobs created from increased demand.
The hydraulic fracturing and horizontal drilling requires a lot of steel pipe. For Youngstown, OH, this demand means hope after years of economic decline. V&M Star built a pipe mill capable of producing 500,000 metric tons of seamless pipe of various sizes. Dimiter Kenarov of the Pulitzer Center reports:
Where once stood the Brier Hill Works of Youngstown Sheet & Tube, a slick new $650 million plant with 350 employees, V&M Star, opened to great fanfare in October 2012. V&M Star makes steel tubes for the gas industry. A few smaller steel shops have also made a comeback, while restaurants and motels are getting busier, according to interviews with owners.
In Duquene, PA, the “overwhelming burden of customer orders” for coated pipes for natural gas drilling caused Dura-Bond Industries to open a new plant.
Also, according to Bloomberg, Turkish company Borusan plans to invest $150 million “to expand its U.S. energy pipe business with a production plant in the country as new technology propels a surge in U.S. oil and gas production.
Staying in the Northeast, Sheryll Poe featured Alberts Spray Solutions of Williamsport, PA. This small business with employee in Central and Northeast Pennsylvania and Ohio offer spray liners for tanks that hold water and other fluids on drilling sites tapping the Marcellus and Utica Shales. Business is doing so well that the company is considering expanding to Texas to plug into the expanding shale production there.
RBN Energy’s Sandy Fielden has declared 2013 the “Year of the Tank Car,” because of the increase in moving oil by rail. This has put pressure on rail car manufacturers:
Union Tank Car Co. is working at full capacity and American Railcar Industries Inc. has a backlog through 2014. Trinity Industries Inc. - the biggest railcar producer - began converting wind-tower factories last year to help meet demand for tank cars. In the first two weeks of January 2013 manufacturers received orders for more than 2,500 new tank cars and there is a backlog of 40,000 cars on order.
She reports that if you order a tank car today, you’ll wait 18 months until delivery.
I’ll end this brief survey by noting the proposal to build more energy infrastructure in Louisiana:
Genesis Energy plans to spend about $125 million on new rail and pipeline infrastructure to connect ExxonMobil's Baton Rouge, Louisiana, refinery to more than 500,000 b/d of new crude supply, the midstream company said in a statement Monday.
The project includes upgrades to the company's Port Hudson, Louisiana, terminal including barge and truck improvements and construction of a new 350,000 b/d pipeline running from the terminal to a tank farm connected to the refinery.
…
The project could attract Bakken Shale crude from North Dakota, Eagle Ford Shale crude from South Texas and heavy crude from Canada, among other grades, said Andy Lipow of Lipow Oil Associates. ExxonMobil's Baton Rouge refinery processes both light sweet and heavy sour crudes, he said.
This survey only scratches the surface of how manufacturers are benefiting from expanded domestic energy production. Jobs are being created, investments are being made, and we’re seeing positive economic growth. Imagine the possibilities if we’re able to unleash our full potential.
When it comes to energy, Washington could learn a lot from North Dakota. Leaders in government and business have come together to safely and responsibly develop the state’s vast natural resources. As a result, North Dakota is at the epicenter of a shale energy boom and is reaping enormous economic benefits.
Oil production in the region has nearly quadrupled since 2005. Production in 2012 topped 700 million barrels per day. North Dakota has recently passed Alaska to become the second highest oil-producing state behind Texas. The state also produces great quantities of coal, America’s most abundant natural resource.
According to a report sponsored by the U.S. Chamber’s Energy Institute and conducted by IHS-CERA, shale energy production in North Dakota supports 70,000 jobs and generates $4 billion in state and local revenue. Those numbers are expected to climb to 114,000 jobs and $6 billion in revenue by 2020. It’s no accident that the state has an unemployment rate of just 3.2%—the lowest in the nation. North Dakota would also benefit from the Keystone XL Pipeline, which, if approved by the Obama administration, would help move oil from the Bakken formation to the rest of the country.
America needs to follow North Dakota’s example. Our nation has more oil, gas, and coal than any other country. We are the largest single natural gas producer in the world. Not only can we use these resources ourselves to displace energy we currently import from unfriendly nations, we can also begin to reduce our trade deficit by exporting energy to other markets.
The abundance of affordable natural gas is also attracting good manufacturing jobs back to America. Over the next 20 years, energy can create millions of additional jobs spread all across this country and generate trillions in government revenues.
To achieve these great benefits, we need to open up new areas to exploration. We’ve foolishly locked away too much of our resources onshore and off our coasts. We need a predictable and fair regulatory environment. The federal government shouldn’t pick winners and losers or subject energy projects to endless and duplicative reviews. We should stop EPA’s efforts to ban the production and use of coal. And we should continue with the next generation of nuclear power plants and develop alternative energy sources such as wind, solar, and geothermal.
By fully embracing America’s energy opportunity, we can accelerate growth, create millions of new jobs, lessen our dependence on foreign sources, and create huge new revenues for government.
North Dakota is leading the way on energy. Washington would be smart to follow.
Secretary of State John Kerry will have his first meeting with his Canadian counterpart, Canadian Foreign Affairs Minister John Baird. One of the topics expected to come up is the Keystone XL pipeline. The State Department continues to review the revised route that was approved by Nebraska Governor Dave Heineman.
Imagine if I worked for the State Department and explained why the permit for Keystone XL was approved. It would include something like this:
The Department found that the addition of crude oil pipeline capacity between Canada and the United States will advance a number of strategic interests of the United States. These included increasing the diversity of available supplies among the United States’ worldwide crude oil sources in a time of considerable political tension in other major oil producing countries and regions; shortening the transportation pathway for crude oil supplies; and increasing crude oil supplies from a major non-Organization of Petroleum Exporting Countries producer. Canada is a stable and reliable ally and trading partner of the United States, with which we have free trade agreements which augment the security of this energy supply.
Approval of the permit sends a positive economic signal, in a difficult economic period, about the future reliability and availability of a portion of United States’ energy imports, and in the immediate term, this shovel-ready project will provide construction jobs for workers in the United States.
Here's a reasonable case to permit a pipeline that would connect Canadian oil to American refineries.
Oh wait! The State Department did state this... in 2009 when it approved a permit for the Alberta Clipper pipeline that runs from Alberta to Wisconsin.
Every point the State Department makes in favor of this pipeline can be made for Keystone XL:
The State Department made a great case for the Alberta Clipper pipeline and the exact same case can be made for Keystone XL. There is no good reason it’s been delayed this long.
Since the statement is already half-written, let’s just get some white-out, replace “Alberta Clipper” with “Keystone XL,” and get on creating jobs and helping the economy.
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