It is no surprise that as the price of crude oil continues to rise, more and more oil and gas exploration activities are in development. This of course is offset by the fact that America has invested record high levels of capital into alternative energy such as wind and solar farms. With so much cash invested into these alternative sources of fuel, why has the price of oil continued to rise?
Continued Rise in Oil and Gas Prices
I think the question can be answered in a number of ways, but the most obvious is that alternative sources of fuel just simply cannot compete with oil and gas. Our American infrastructure is dependent on crude oil and natural gas which is evident in our daily consumption of the two. Coupled with the fact that the expenses required to gain profitability through wind and solar on a national scale makes large scale alternative energy investments simply unviable.
With that said, I am not against Alternative Investments, its just that there simply is not enough revenue coming in to justify the expenditures necessary to compete with oil and gas.
Since this article is being written pertaining to an increase of oil and gas jobs in America, I wanted to preclude the topic with some basic facts and information. The reason oil and gas jobs are on the rise is simply due to the rising price of crude oil, plain and simple. With an increased price per MCF or price per barrel, exploration and development companies find tapping new oil reserves to be more lucrative and therefore more profitable. Additionally, existing oil and gas reserves which were once marginal may be re-developed into profitable revenue generating sources once again.
Jobs Jobs Jobs!
The energy business can be a bit tricky when it comes to jobs. What I mean by that is oil and gas companies expect a high degree of work ethic with an extraordinary workload on a daily basis. This ensures that the brightest and best are working on behalf of investors, owners and the company. With so much risk involved with the discover and production of oil, it is easy to see why such high demands are placed on the industry. With the heavy workload comes opportunity. Those willing to work hard have a tremendous growth opportunity in the industry as expansion occurs. From entry level jobs cleaning up trash on well sites to CEOs sitting in high rise buildings, anything is possible in an industry where skilled workers are in demand.
As the oil prices continue to rise, so will exploration and development to the point where, in the future, it is possible for these jobs to transition systematically into alternative energy sources as a natural evolution. The government forcing this change is doomed to fail simply because the energy industry is made up of highly skilled American workers. American workers which have been working in the industry for generations. The knowledge about production, revenue, operations cannot simply be transferred overnight to a startup “green energy company”, it just wont happen. The transition must occur organically for it to be successful and to avoid the risk of unnecessary layoffs.
What the Government can do to help.
The best thing the government can do is to simply do nothing as far as trying to advance the industry. Ease up on regulations which make oil and gas more expensive to allow the price of oil to decline. Think of it this way, with a decline in the price of oil, oil and gas become cheaper for the consumer. This cheaper price may allow alternative energy sources to compete price wise. With a lower price per barrel, existing energy companies will be required to invest their time, money and skilled laborers into other areas which have the potential to generate profitable returns. Naturally this would be in the solar energy and wind energy sector since they are so connected as it is.
This natural shift would ensure continued American Jobs and continued employment in the energy industry. With all of the government interference, companies are struggling to decide the appropriate course of action regarding profitability and continued growth. A lower cost of crude would force companies to invest in cost savings measures and force companies to invest long term into alternative energy sources as a natural progression not just a flash in the pan failed strategic strategy on the part of the federal government.
In closing, Oil and Gas, Wind Power, Solar Power and other Alternative Energy generation should work hand in hand as opposed to the governments position of Alternative Energy vs. Big Oil. With the government putting so much capital into failed alternative energy initiatives and economic policy, the covernment is creating an us vs. them scenario leaving a number of oil companies reluctant to invest their capital into what they perceive as a direct competitor for the nations energy supply. There is enough for everyone if we work together and enough talented and skilled workers in America to ensure a continued energy supply regardless of wether it comes from crude, solar or wind.
What are your thoughts?