Wednesday, December 23, 2015

Oil Jobs Down. Parnell, What About All Those Jobs SB 21 Was Supposed To Create?

Let's see.  If I recall right, Governor Parnell's every other words were Jobs and SB 21. and the oil and gas industry was plastering the state of Alaska with ads saying how jobs would be lost if people voted for repealing the tax credits the legislature had given them in SB 21.    Despite all the money they spent, the initiative lost by only by a small margin.

And now the ADN has this article about lost jobs.
Oil, gas industry jobless claims up 7th month in a row
Jeannette Lee Falsey Alaska Dispatch News
 Jobless benefits claims are down in Alaska and across the country, but the same cannot be said for the state’s oil and gas sector. The lack of available work has boosted the number of former workers in the extraction and support industries who have filed for unemployment, according to the state labor department. Year-on-year increases in existing unemployment insurance claims by laid-off oil and gas workers began in May 2015, about one year after oil prices began falling. In November, 895 former workers in the sector were receiving jobless benefits, up from 463 for the same month in 2014. . .

Can you imagine how they would be blaming the lost jobs on the repeal of the tax credits if the initiative had passed?   But, I have to acknowledge, the oil companies never promised anything, it was their lackeys in the governor's seat and in the legislature who made claims about increasing jobs.   It's just like Shell blamed government regulation when it was pretty clear that the main reason they  pulled out of the Chukchi this fall was because their drilling produced nothing and the price of oil had tanked.

Now, I understand that government regulation can be quite an obstacle.  I just did another phone round with the IRS today and I feel anyone's pain who has to deal with people like Ms. Rutherford.  And I'm all for simplifying regulations whenever possible.

But it's my observation that the voluminous regulations are due to company lawyers finding loopholes and exploiting them, resulting in more and more regulations.

But we also know that without the government looking out for environmental risks, the oil companies would do in the Arctic what they've done around the world where there aren't good regulations.  Where the oil companies' bottom line is greater than the treasuries of the countries they're working in.  And where it is easy to bribe governmental officials for the permits they need.

And we're always hearing about the great private sector and how entrepreneurs take risks, but they also create LLC's (Limited Liability Corporations) to limit their liability.  They know going in that government regulations have to be met.  It's part of their business plan.  So moaning about it after the fact (well, also during the process) is just so much spin to avoid the responsibility for failing to find oil, or for an environmental catastrophe, or firing employees.

I've got tons of other stuff to do besides this post, but let me give you a few links to show that I'm not making this all up.

Myanmar's Oil and Gas 

McSpotlight on the Oil Industry

Effects of Oil Drilling (on Indigenous People)

And for those who remember the Exxon Valdez spill and the Deepwater issues, you'll note these things happen in the US too, but not quite as egregiously.


  1. A few Bushisms come to mind.

    "Well, I think if you say you're going to do something and don't do it, that's trustworthiness."

    "I'll be long gone before some smart person ever figures out what happened inside this Oval Office."

    "Mission Accomplished!"

  2. I work also in the oil industry as an analyst. We experienced the same in the upstream part of the industry but it is a cyclical issue. However refining is quite profitable now. It can change anytime though.

    Nevertheless it is interesting to consider the human aspects of the changes in the industry.

  3. Wow! It's great to hear from you after so long. And to hear that your economics education led to a good job. No more blogging I guess. Have a good new year Ropi.


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