NC State’s Dr. Mike Walden – Forecasting Energy Jobs
There’s great interest in the energy sector as a way to create jobs. Proponents of these energy sources — from oil and gas exploration to solar and wind power — often tell what they will mean for new jobs. But is it easy to make a connection between energy production and jobs? N.C. State University economist Mike Walden weighs in.
“Well, if we had, for example, precise information on energy production — that is to say, we know how much of an energy source is available; we know the price that it’s available at, so we know the revenues — we can make a pretty good connection between that information and number of jobs.
“The problem is that, increasingly in the energy area, we have questions. There are unknowns about price and quantity. For example, in the nation there’s now a big push to harvest, if you will, natural gas that’s in the ground. It’s very, very difficult to know how much natural gas is available under any area, number one. And then number two, it’s very difficult to project, well, What’s going to be the price of natural gas? And oftentimes — not oftentimes; I should say all the time — whether drilling for natural gas is feasible — economically feasible — will depend on the price.
“So what you see there is there’s an interrelationship between the price and the quantity of a particular energy source that you have. So, if you have questions about how much natural gas, to continue that example, you’re able to harvest and how much revenues you’re going to produce from that, it’s very difficult, therefore, to get precise job numbers.
“So what forecasters generally do is give decision-makers a range of possibilities and say, ‘Well, at this price and if we think this amount of natural gas, for example, is down there, here could be the job impacts.
“But it’s a very, very uncertain area, and so be very careful about listening to job numbers quoted.”
Image courtesy of NCSU