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Heritage Economist Credits U.S. Oil, Gas Industry With Economic Recovery

The Heritage Foundation's chief economist Stephen Moore kicked off this year's Shale Insight conference in Pittsburgh by telling an audience that without advances in the onshore oil and gas industry there would be no economic recovery in the United States.

Moore, a one-time staffer for President Reagan and a former member of the Wall Street Journal's editorial board, returned to the conservative think-tank earlier this year, 25 years after he left it in the 1980s. His speech marked a politically oriented Wednesday morning filled with skepticism about some of President Obama's economic- and energy-related policies. Moore preceded a moderated discussion with Fox News' Dana Perino, who served as President George W. Bush's press secretary for nearly two years. 

Moore made no secret that he was "high" on the oil and gas industry's current trajectory.

"You can't get a feel for the kind of recovery we've had in this country without understanding what's happening in the industry you all are involved in," he told about 1,000 attendees at the Marcellus Shale Coalition's (MSC) annual conference. "Without the oil and gas recovery that's happening in West Virginia, Pennsylvania, Ohio and places like Texas and North Dakota -- without these incredible innovations that have happened in the energy industry -- there would be no economic recovery. This is an incredibly energy-dependent economy right now.”

The U.S. Census Bureau said in March the mining, quarrying and oil and gas extraction sector was among the fastest-growing sectors between 2007 and 2012, which roughly tracks the Great Recession that began in December 2007 and ended sometime in mid-2009 (see Shale DailyMarch 27). Employment across the sector increased by 23% to 903,841 jobs during the five-year period, while revenues jumped by 34% to $555 billion in the same period.

The oil and gas industry alone employed about 192,000 people nationwide, according to the report, a 27% increase over the five-year period, while revenues grew 31% to reach $333 billion. The report also said payrolls grew 60% to hit $15.4 billion. Separately, the bureau said some of the nation's fastest-growing areas were home to onshore development, such as Texas and North Dakota.

Although he didn't cite that report, Moore noted population growth's correlation with oil and gas development and said the industry's place in the economic rebound was evident in places such as North Dakota. In that state, home to more than 723,000 people, development in the Williston Basin has been credited  with a significant decline in unemployment, where the rate was 2.8% in August.

Moore said the industry needs to do a better job of championing its successes, noting what he believes is currently a losing battle for the public's opinion about hydraulic fracturing and the industry’s ability to reduce carbon emissions and create jobs.

Moore also criticized some of the president's economic policies, such as the American Recovery and Reinvestment Act of 2009, also known as the economic stimulus. He claimed that one of the single largest problems with today's economy is the huge amount of capital dollars that large U.S. corporations are holding in reserve. He said the economy would surge if those dollars were reinvested.

An MSC spokesman said about 1,700 people were in attendance at Shale Insight early Wednesday. The coalition expects nearly 2,000 people to attend by the conference's conclusion on Thursday, when Pennsylvania Gov. Tom Corbett is expected to address the crowd, along with various energy executives, regulators and other keynote speakers.

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